Financial Instruments and Exchange Act

A person other than a financial instruments business operator, etc. and authorized firm for on-exchange transactions (limited to a person engaging in or seeking to engage in high-speed trading as financial instruments business, services of a registered financial institution, or on-exchange transaction services) must be registered by the Prime Minister if the person seeks to perform high-speed trading.

A person seeking the registration referred to in the preceding Article must submit a written application for registration to the Prime Minister, in which it states the following particulars:

the person's trade name or name;

the amount of stated capital or the total amount of contributions, if it is a corporation;

the names of its officers, if it is a corporation;

the name and location of the person's principal business office or office;

the name and location of the business office or office for services related to high-speed trading;

if the person engages in other business, the business type; and

other particulars specified by Cabinet Office Order.

The following documents must accompany the written application for registration referred to in the preceding paragraph:

a document pledging that the person does not fall under any of the items of Article 66-53 (excluding items (ii) through (iv), item (v), (d), and item (vi), (c));

a document stating the things specified by Cabinet Office Order as constituting the business outline and business methods for services related to high-speed trading;

if it is a corporation, the articles of incorporation and the corporation's certificate of registered information (including anything equivalent to these); and

other documents specified by Cabinet Office Order.

In attaching the documents set forth in item (iii) of the preceding paragraph to the written application for registration, if the articles of incorporation have been prepared as electronic or magnetic records, the electronic or magnetic records (limited to those specified by Cabinet Office Order) may be attached to that written application in lieu of written documents.

When an application is filed for the registration referred to in Article 66-50, unless the Prime Minister refuses the registration pursuant to the provisions of the following Article, the Prime Minister must register the following particulars in the high-speed traders register:

the particulars set forth in the items of paragraph (1) of the preceding Article; and

the date of registration and the registration number.

The Prime Minister must make the high-speed traders register available for public inspection.

If the applicant for registration falls under any of the following items, or if a written application for registration or an accompanying document, or electronic or magnetic record includes a false statement or record or lacks a statement or record of a material fact, the Prime Minister must refuse that registration:

a person that falls under any of Article 29-4, paragraph (1), item (i), (a) through (c);

a person that conducts another business which is found to be contrary to the public interest;

a person that does not have a personnel structure sufficient to perform the services related to high-speed trading in an appropriate manner;

a person that is found not to have in place the necessary system for performing services related to high-speed trading in an appropriate manner;

if the applicant is a corporation, a person that falls under any of the following:

a person that has an officer falling under any of the following persons:

a person specified by Cabinet Office Order as being unable to properly perform services related to high-speed trading due to a mental or physical disorder;

a person falling under any of Article 29-4, paragraph (1), item (ii), (b) through (i);

a person whose stated capital or total amount of contributions are less than the amount of money that is specified by Cabinet Order as necessary and appropriate in the public interest or for the protection of investors;

a foreign corporation that has not designated a domestic representative or a domestic agent; or

a foreign corporation that has not been given the assurance referred to in Article 189, paragraph (2), item (i) by the foreign regulatory authority for financial instruments prescribed in paragraph (1) of that Article in a foreign country where its principal business office or office or its business office or office for services related to high-speed trading is located;

if the applicant is an individual, a person that falls under any of the following persons:

a person that falls under any of Article 29-4, paragraph (1), item (ii), (b) through (h), or (i) (excluding the part that involves the provisions of Acts prescribed in item (i), (c) of that paragraph) or (a), 1. of the preceding item;

an individual domiciled in a foreign country that has not designated a domestic agent; or

an individual domiciled in a foreign country that has not been given the assurance referred to in Article 189, paragraph (2), item (i) by the foreign regulatory authority for financial instruments defined in paragraph (1) of that Article in a foreign country where the individual's principal business office or office or the individual's business office or office for conducting services related to high-speed trading is located;

a person whose net assets (meaning the figure arrived at when the total amount of liabilities is deducted from the total amount of assets pursuant to the provisions of Cabinet Office Order) are less than the amount of money that is specified by Cabinet Order as necessary and appropriate in the public interest or for the protection of investors.

If any particular set forth in the items of Article 66-51, paragraph (1) changes, the high-speed trader must notify the Prime Minister of this within two weeks from the day of the change.

Upon accepting a notification under the preceding paragraph, the Prime Minister must register the particulars given in the notification in a high-speed traders register.

If the business outline or business methods that a high-speed trader has stated in the documents set forth in Article 66-51, paragraph (2), item (ii) change, the high-speed trader must notify the Prime Minister of this without delay pursuant to the provisions of Cabinet Office Order.

A high-speed trader must establish an operational control system for the appropriate performance of its services related to high-speed trading, pursuant to the provisions of Cabinet Office Order.

A high-speed trader must not allow another person to engage in high-speed trading using the name of the high-speed trader.

A high-speed trader must conduct its business in such a manner that the state of its business operations does not fall under any of the following items:

the electronic data processing system or any other equipment related to high-speed trading is in such a state that its management for preventing grounds such as abnormal operation of the electronic data processing system from compromising the full utilization of the functions of the financial instruments market is found to be insufficient; or

beyond what is set forth in the preceding item, the business operations are in a state specified by Cabinet Office Order as one that is contrary to the public interest or that is likely to compromise the protection of investors.

A high-speed trader must prepare and preserve books and documents concerning its business pursuant to the provisions of Cabinet Office Order.

Each business year, pursuant to the provisions of Cabinet Office Order, a high-speed trader must prepare a business report and submit it to the Prime Minister within three months after the end of the business year.