Financial Instruments and Exchange Act

A financial institution must be registered by the Prime Minister if it seeks to perform any of the following acts on a regular basis, or if it seeks to provide investment advisory and agency business or engage in securities, etc. management:

brokerage with written orders;

an act specified in the items of paragraph (2) of the preceding Article in connection with the securities or transactions set forth in the relevant item (excluding those falling under the proviso to paragraph (1) of that Article);

derivatives transactions, etc. other than securities-related derivatives transactions, etc. (excluding those conducted for the purpose of investment pursuant to the provisions of other Acts or on the account of a person that entrusts the financial institution to do so based on a trust contract and commodity-related market derivatives transactions), or acts other than those set forth in Article 28, paragraph (10), item (vii) among those specified in Article 2, paragraph (8), item (v); or

acts set forth in Article 2, paragraph (8), item (vii).

acts specified by Cabinet Order as prescribed in paragraph (3) of the preceding Article.

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:

its trade name or name;

the amount of stated capital, the total amount of funds, or the total amount of contributions;

the names of its officers;

the names of its accounting advisors, if it is a company with accounting advisors;

if the person provides an electronic offering service or electronic public offering service with regard to securities set forth in the items of Article 3 or securities not listed on a financial instruments exchange (excluding those specified by Cabinet Order as prescribed in Article 29-2, paragraph (1), item (vi)), an indication of this;

the following particulars concerning high-speed trading:

if the person conducts high-speed trading as registered financial institution business (meaning business in connection with the registration set forth in the preceding Article; the same applies hereinafter), an indication of this; and

beyond the case provided for in (a), if the person conducts high-speed trading, an indication of this;

if the person conducts, as a business, the acts set forth in Article 2, paragraph (8), items (vii) through (ix) with regard to rights in a lending business, etc., an indication of this;

the names and locations of its head office and other business offices or offices;

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 applicant does not fall under Article 33-5, paragraph (1), items (i) and (ii);

a document stating the person's way of managing the risk of loss, the way that duties are divided, and the other things specified by Cabinet Office Order as constituting the business outline and business methods;

a document stating the things specified by Cabinet Office Order as constituting the person's status as a parent corporation, etc., subsidiary corporation, etc., or other affiliated company; and

its articles of incorporation, certificate of registered information, balance sheet, profit and loss statement, and other documents specified by Cabinet Office Order, other than those that are set forth in the preceding three items.

As concerns the documents set forth in item (iv) of the preceding paragraph accompanying a written application for registration, if the articles of incorporation or balance sheet have been prepared as electronic or magnetic records or if electronic or magnetic records have been prepared for a profit and loss statement in lieu of a written document, such electronic or magnetic records (limited to those specified by Cabinet Office Order) may accompany the written application for registration in lieu of the written documents.

When an application is filed for the registration referred to in Article 33-2, unless the Prime Minister refuses the registration pursuant to the provisions of paragraph (1) of the following Article, the Prime Minister must register the following particulars in a financial institutions 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 financial institutions register available for public inspection.

The Prime Minister must refuse to effect a registration if the applicant for registration falls under any of the following items, or if the written application for registration or a document or electronic or magnetic record that is required to accompany it contains a false statement or record or omits a statement or record of a material fact:

a person that has had the registration referred to in Article 33-2 rescinded pursuant to the provisions of Article 52-2, paragraph (1), has had the registration referred to in Article 66 rescinded pursuant to the provisions of Article 66-20, paragraph (1), has had the registration referred to in Article 66-27 rescinded pursuant to Article 66-42, paragraph (1), has had the registration referred to in Article 66-50 rescinded pursuant to Article 66-63, paragraph (1), or has had the registration referred to in Article 66-71 rescinded pursuant to Article 66-85, paragraph (1), or that has had the registration referred to in Article 12 of the Act on the Provision of Financial Services and the Development of the Accessible Environment Thereto (limited to the registration related to the type of securities, etc. intermediary business operations) rescinded pursuant to the provisions of Article 38, paragraph (1) of that Act (excluding items (ii), (iii), and (v)), for whom five years have not passed since the date of that rescission; or a person that had a registration of the same kind (including permission or any other administrative disposition similar to the registration) obtained in a foreign state rescinded pursuant to the provisions of a law or regulation of that foreign state that is equivalent to this Act or the Act on the Provision of Financial Services and the Development of the Accessible Environment Thereto, for whom five years have not passed since the date of the rescission;

a person that has been sentenced to a fine (including an equivalent sentence under a law or regulation of a foreign state) for violating the provisions of this Act; the Secured Bond Trust Act; the Act on Engagement in Trust Business by Financial Institutions; the Commodity Derivatives Transaction Act; the Act on Investment Trusts and Investment Corporations; the Real Estate Brokerage Act; the Act Regulating the Receipt of Contributions, the Receipt of Deposits, and Interest Rates; the Installment Sales Act; the Money Lending Business Act; the Act on Deposit Transactions; the Act on Regulation of Commodity Investment; the Act on Specified Joint Real Estate Ventures; the Act on the Securitization of Assets; the Act on Issuance, etc. of Bonds for Financial Corporations' Loan Business; the Act on the Provision of Financial Services and the Development of the Accessible Environment Thereto; the Trust Business Act; the Payment Services Act; the Act on the Promotion of Business Financing, etc.; or any other laws specified by Cabinet Order, or for violating the provisions of a law or regulation of a foreign state that is equivalent to any of these laws, and five years have not passed since the day on which the person finished serving the sentence or ceased to be subject to its enforcement;

a person falling under any of the following:

a person found not to have secured, for each registered financial institution business, officers or employees who have sufficient knowledge and experience necessary for its execution;

a person found likely to cause registered financial institution business to lose credibility, in light of the person's relationship with an organized crime group prescribed in Article 2, item (ii) of the Act on Prevention of Unjust Acts by Organized Crime Group Members or an organized crime group member prescribed in item (vi) of that Article, and other circumstances;

any other person that falls under the criteria specified by Cabinet Office Order as a person that does not have a personnel structure sufficient to perform registered financial institution business appropriately;

a person that has not joined an association and that has not prepared internal rules (meaning rules with which that person or its officers or employees should comply) that have contents equivalent to the articles of incorporation or other rules (limited to those for ensuring fair and smooth purchase and sales and other transactions of securities or ensuring fair and smooth derivatives transactions, etc. or for protecting investors) of the association or that has not established a system for complying with the relevant internal rules;

a person that is found not to have in place the necessary system for performing services of a registered financial institution in an appropriate manner.

If the Prime Minister registers that a bank or cooperative financial institution, or any other financial institution specified by Cabinet Order, performs the act specified in Article 33, paragraph (2), item (v) in connection with transactions set forth in that item on a regular basis, the Prime Minister must add the conditions specified by Cabinet Office Order within the necessary scope for ensuring fair transactions in connection with share certificates.

If the particulars set forth in the items of Article 33-3, paragraph (1) changes, the registered financial institution 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 financial institutions register.

If a registered financial institution seeks to change a part of the business outline or business method that it has stated in the documents set forth in Article 33-3, paragraph (2), item (ii) and that constitutes a specified part of the business outline or business method, the registered financial institution must notify the Prime Minister of this in advance, and if a part of the business outline or business method other than a specified part of the business outline or business method changes, the registered financial institution must notify the Prime Minister of this without delay, pursuant to the provisions of Cabinet Office Order.

The provisions of Article 33 do not preclude the Prime Minister from granting the registration referred to in Article 29 or the authorization referred to in Article 30, paragraph (1) to a person in which a bank or cooperative financial institution, or any other financial institution specified by Cabinet Order, holds the majority of the voting rights held by all the shareholders, etc.