Financial Instruments and Exchange Act

A financial instruments business operator, etc. must, with regard to transactions related to the acts listed in Article 2, paragraph (8), item (ii) or (iii) for commodity-related market derivatives transactions (hereinafter referred to as "commodity-related market derivatives transactions brokerage, etc." in this Article, the following Article and Article 79-20) or transactions related to the business prescribed in Article 35, paragraph (1) specified by Cabinet Office Order as a business incidental to a business related to commodity-related market derivatives transactions brokerage, etc. (hereinafter collectively referred to as "subject commodity derivatives transaction-related transactions" in Article 79-20 and Article 79-49), manage the money or securities deposited from a customer under the provisions of Article 119 or other property deposited from a customer, or money or other property belonging to the account of a customer, separately from the operator, etc.'s own property pursuant to the provisions of Cabinet Office Order.

A financial instruments business operator, etc. must manage the money or securities that a customer deposits pursuant to Article 119 and other security deposits and securities in connection with the derivatives transactions, etc. it conducts (excluding those that fall under securities-related derivatives transactions, etc., commodity-related market derivatives transactions, or commodity-related market derivatives transactions brokerage, etc.; the same applies in the following paragraph), separately from its own property, pursuant to the provisions of Cabinet Office Order.

A financial instruments business operator, etc. must manage the money and other assets that are equivalent to the amount of financial instruments that are part of the customer's account in connection with the derivatives transactions, etc. it conducts, pursuant to the provisions of Cabinet Office Order.

If a financial instruments business operator, etc. furnishes the securities in its possession on a customer's account or securities deposited with it by a customer as collateral, or lends such securities to another person, it must obtain written consent from that customer pursuant to the provisions of Cabinet Office Order.

A financial instruments business operator, etc. must, when furnishing as security the commodity possessed by the financial instruments business operator, etc. based on a customer's account (including instruments or certificates issued in relation to deposited commodity; hereinafter the same applies in this paragraph) or a commodity deposited to the financial instruments business operator, etc. from a customer or loaning such commodities to another person, with regard to the business related to the acts listed in Article 2, paragraph (8), item (ii), (iii) or (v) for commodity-related market derivatives transactions, obtain written consent from the customer pursuant to the provisions of Cabinet Office Order.

The provisions of Article 34-2, paragraph (12) apply mutatis mutandis to the written consent prescribed in the preceding two paragraphs.

When a financial instruments business operator, etc. 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)), it must, pursuant to the provisions of Cabinet Office Order, make the particulars, among the information that must be provided pursuant to Article 37-3, paragraph (1), that are specified by Cabinet Office Order as having a material influence on decisions by the other party to the electronic offering service or electronic public offering service available for inspection by the other party, by means of using an electronic data processing system or by any other means using information and communications technology that Cabinet Office Order specifies, throughout the period in which it provides an electronic offering service or electronic public offering service with regard to such securities.

When a financial instruments business operator, etc. conducts cryptoasset-related business (meaning performing, on a regular basis, the acts set forth in Article 2, paragraph (8), items (xviii) through (xxv) and any other act that constitutes a financial instruments transaction as specified by Cabinet Office Order with regard to crypto-and other assets (referred to as a "cryptoasset-related act" in the following paragraph); the same applies in the following paragraph), it must, pursuant to the provisions of Cabinet Office Order, explain the nature of the crypto-and other assets; provided, however, that this does not apply in the cases specified by Cabinet Office Order as cases where there is no hindrance to the protection of investors.

When a financial instruments business operator, etc., its officer, or its employee concludes or solicits a customer to conclude a contract for it to perform a cryptoasset-related act with the customer as the other party or on behalf of the customer, in connection with the cryptoasset-related business it conducts, it must not make a representation that could cause the customer to have a misconception about the nature of the crypto-and other assets or other particulars specified by Cabinet Office Order.

A financial instruments business operator must not perform the acts set forth in Article 2, paragraph (8), items (xviii) through (xxiv) with respect to cryptoassets that do not conform to the standards specified by Cabinet Office Order as standards necessary to ensure the public interest or the protection of investors.

When the Prime Minister finds it necessary and appropriate for the public interest or the protection of investors in a case where the specified cryptoasset issuer of a specified cryptoasset handled by a financial instruments business operator has violated this Act or an order under this Act, the Prime Minister may order the financial instruments business operator to suspend the services for purchase and sale, etc. of cryptoassets in connection with the specified cryptoasset, or to cease handling the specified cryptoasset. In this case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, the Prime Minister must conduct a hearing.

If a notice under Article 15, paragraph (1) of the Administrative Procedure Act has been given in a hearing for a disposition under the provisions of the preceding paragraph, the specified cryptoasset issuer prescribed in the preceding paragraph is deemed to be a person who has received the notice under paragraph (1) of that Article for the purpose of the application of the provisions of Chapter III, Section 2 of that Act.

A financial instruments business operator must, pursuant to the provisions of Cabinet Office Order, disclose to the public the daily trading volume and the highest price, lowest price, closing price, and other particulars, for each issue, in respect of the purchase and sale of cryptoassets through the services for purchase and sale, etc. of cryptoassets that it conducts.

A financial instruments business operator must perform cryptoasset, etc. management for customers with the due care of a prudent manager.

When performing cryptoasset, etc. management, a financial instruments business operator must use the method specified by Cabinet Office Order as a method for properly managing customers' cryptoassets.

A financial instruments business operator must not, in connection with the cryptoasset, etc. management that it conducts, receive the provision of cryptoasset management-related services from a person other than a cryptoasset management-related service provider.

When a financial instruments business operator receives the provision of cryptoasset management-related services from a cryptoasset management-related service provider, it must take, pursuant to the provisions of Cabinet Office Order, measures necessary for ensuring the proper and reliable performance of the services relating to the management of customers' cryptoassets, such as establishing standards and procedures for the selection of cryptoasset management-related service providers and providing guidance to that cryptoasset management-related service provider.

When a financial instruments business operator continuously uses an information system necessary for the services for purchase and sale, etc. of cryptoassets that is provided by another person, it must take, pursuant to the provisions of Cabinet Office Order, measures necessary for ensuring the proper and reliable performance of the services for purchase and sale, etc. of cryptoassets, such as establishing standards and procedures for the selection of the person that provides that information system and providing guidance to that person.

In addition to the case of receiving the provision of cryptoasset management-related services from a cryptoasset management-related service provider, when a financial instruments business operator has entrusted a part of the cryptoasset trading business that it conducts to another person (including entrustment over two or more stages), it must take, pursuant to the provisions of Cabinet Office Order, measures necessary for ensuring the proper and reliable performance of the entrusted business, such as providing guidance to the entrustee of the business relating to that entrustment.

A financial instruments business operator must, with regard to the cryptoasset trading business that it conducts, manage customers' money separately from its own money and, pursuant to the provisions of Cabinet Office Order, entrust it in trust to a trust company, etc.

A financial instruments business operator must, with regard to the cryptoasset trading business that it conducts, manage customers' cryptoassets separately from its own cryptoassets, pursuant to the provisions of Cabinet Office Order. In this case, that financial instruments business operator must manage customers' cryptoassets (excluding those that satisfy the requirements specified by Cabinet Office Order as necessary for ensuring the convenience of customers and facilitating the smooth performance of cryptoasset trading business) by a method specified by Cabinet Office Order as one with little risk of impairing customer protection.

A financial instruments business operator must periodically undergo an audit by a certified public accountant or audit by an audit corporation, pursuant to the provisions of Cabinet Office Order, as regards the management conditions under the preceding two paragraphs.

A financial instruments business operator must hold, as its own cryptoassets, cryptoassets of the same type and quantity as the cryptoassets that satisfy the requirements specified by Cabinet Office Order prescribed in paragraph (2) of the preceding Article (hereinafter referred to as "performance-guarantee cryptoassets" in this paragraph and Article 43-17, paragraph (1)), and manage them separately from its own cryptoassets other than performance-guarantee cryptoassets, pursuant to the provisions of Cabinet Office Order. In this case, that financial instruments business operator must manage performance-guarantee cryptoassets by a method specified by Cabinet Office Order as one with little risk of impairing customer protection.

The provisions of paragraph (3) of the preceding Article apply mutatis mutandis to the management conditions under the provisions of the preceding paragraph.

When a financial instruments business operator furnishes as collateral customers' cryptoassets that it manages in connection with the cryptoasset trading business that it conducts (including where it furnishes as collateral a claim for the transfer of cryptoassets that a customer holds against that financial instruments business operator under a contract providing for the management of cryptoassets by that financial instruments business operator) or lends them to another person, it must obtain written consent from the customer, pursuant to the provisions of Cabinet Office Order.

The provisions of Article 34-2, paragraph (12) apply mutatis mutandis to the written consent under the preceding paragraph.