Financial Instruments and Exchange Act

If the obligations that a member business operator involved in financial instruments transactions bears pursuant to a basic contract for the implementation of dispute resolution procedures are breached, and the designated dispute resolution organization hears the opinion of the member person or firm involved in financial instruments transactions and finds there to be no legitimate reason for the breach, the designated dispute resolution organization must disclose the trade name or name of the member person or firm involved in financial instruments transactions and the fact of the breach to the public, as well as reporting it to the Prime Minister, without delay.

A designated dispute resolution organization must endeavor to provide information, consultation, and other support to member person or firms involved in financial instruments transactions and to other persons, in order to preemptively prevent complaints related to financial instruments transaction services and disputes related to financial instruments transaction services, and to facilitate the processing of complaints related to financial instruments transaction services and the resolution of disputes related to financial instruments transaction services.

A designated dispute resolution organization must not allow the member, etc. of an organized crime group (meaning a member of an organized crime group as defined in Article 2, item (vi) of the Act to Prevent Illegal Activities by Members of Organized Crime Groups (hereinafter referred to as the "member of an organized crime group" in this Article) or a person for whom five years have not passed since the day on which they ceased to be the member of an organized crime group) to engage in dispute resolution services, etc., or use such a person as an assistant in dispute resolution services, etc.

A designated dispute resolution organization must not subject any particular member person or firm involved in financial instruments transactions to unfair and discriminatory treatment.

A designated dispute resolution organization must prepare and archive records of its dispute resolution services, etc. pursuant to the provisions of Cabinet Office Order, beyond the records under the provisions of Article 156-50, paragraph (9).

If the customer of a member person or firm involved in financial instruments transactions files an application for the resolution of a complaint related to financial instruments transaction services, beyond providing the customer with the necessary advice and investigating the circumstances to which the complaint related to financial instruments transaction services pertains based on its consultation with the customer, the designated dispute resolution organization must notify the member person or firm involved in financial instruments transactions of the substance and content of the complaint related to financial instruments transaction services, and request that the member person or firm involved in financial instruments transactions process the complaint expeditiously.

The party to a dispute related to financial instruments transaction services may file an application for dispute resolution procedures with the designated dispute resolution organization with which the member person or firm involved in financial instruments transactions has concluded a basic contract for the implementation of dispute resolution procedures, for the purpose of resolving the dispute related to the financial instruments transaction services of the member person or firm involved in financial instruments transactions.

When a designated dispute resolution organization receives the application referred to in the preceding paragraph, it is to appoint dispute resolution mediators.

Dispute resolution mediators are to be appointed from among persons of the highest moral character that fall under any of the following items (excluding any person that has an interest in a party connected with the application referred to in paragraph (1)). In such a case, at least one of the dispute resolution mediators must be a person that falls under item (i) or (iii) (or in item (i), (iii) or (iv), if the application pertains to a dispute provided for in Article 3, paragraph (1), item (vii) of the Judicial Scrivener Act):

an attorney-at-law who has been practicing for five years or more in total;

a person that has engaged in financial instruments transaction services for ten years or more in total;

a person provided for by Cabinet Office Order as having specialized knowledge of and experience in consulting on complaints that arise between consumers and person or firms in business with regard to consumer affairs or on any other consumer affairs matters;

if the application pertains to a dispute prescribed in Article 3, paragraph (1), item (vii) of the Judicial Scriveners Act, a judicial scrivener as prescribed in paragraph (2) of that Article that has engaged in summary court legal representation services, etc. as defined in that paragraph for five years or more in total; or

a person specified by Cabinet Office Order as being equivalent to a person set forth in any of the preceding items.

A designated dispute resolution organization is to send the application referred to in paragraph (1) into dispute resolution procedures by the dispute resolution mediators appointed pursuant to paragraph (2) (hereinafter simply referred to as "dispute resolution mediators" in this Article and paragraph (1) of the following Article); provided, however, that if the dispute resolution mediators find that it is not appropriate to carry out dispute resolution procedures due to it being found that the customer of the member person or firm involved in financial instruments transactions that is a party under that application has sufficient ability to properly resolve the dispute related to financial instruments transaction services or due to any other grounds, or if the dispute resolution mediators find that a party has filed the application referred to in paragraph (1) for unjust purposes and without due cause, they are not to implement dispute resolution procedures, and if the dispute resolution mediators find it to be appropriate to send the application into procedures equivalent to dispute resolution procedures at an entrusted dispute resolution organization, the designated dispute resolution organization is to entrust the operation of dispute resolution procedures to an entrusted dispute resolution organization.

If the dispute resolution mediators decide not to implement dispute resolution procedures pursuant to the proviso to the preceding paragraph, or if they decide to entrust the operation to an entrusted dispute resolution organization, the designated dispute resolution organization is to notify the person that filed the application referred to in paragraph (1), indicating that they have done so and giving the reason.

A dispute resolution mediator may hear the opinions of the parties and witnesses, request them to submit written reports, request the parties to submit books, documents, and any other articles that should serve as a reference, prepare the settlement proposal that is needed to resolve the case and recommend that the parties accept it, or implement a special conciliation (meaning presenting the special conciliation proposal provided for in Article 156-44, paragraph (6)).

Dispute resolution procedures are not open to the public; provided, however, that a dispute resolution mediator may allow the attendance of a person that is considered to be appropriate, with the consent of the parties.

Prior to the commencement of dispute resolution procedures and pursuant to the provisions of Cabinet Office Order, a designated dispute resolution organization must deliver a document that states the following particulars or provide an electronic or magnetic record in which these have been recorded to the customer of the member person or firm involved in financial instruments transactions that is a party to the dispute, and give an explanation of the same:

the particulars of the fees to be paid by the customer;

the standard operation process from the commencement to the termination of dispute resolution procedures, as provided in Article 156-44, paragraph (4), item (vi); and

beyond what is set forth in the preceding two items, matters specified by Cabinet Office Order.

A designated dispute resolution organization must prepare and archive a dispute resolution procedures record detailing the following matters with regard to the dispute resolution procedures it implemented, pursuant to the provisions of Cabinet Office Order:

the date on which the party to the dispute related to financial instruments transaction services filed the application for dispute resolution procedures;

the name or trade name of the parties to the dispute related to financial instruments transaction services and their agents;

the names of the dispute resolution mediators;

the particulars of the dispute resolution procedures;

the results of the dispute resolution procedures (including the reasons for the termination of dispute resolution procedures and its date); and

beyond what is set forth in the preceding items, the particulars necessary for clarifying the content of the implemented dispute resolution procedures which are specified by Cabinet Office Order.

If the dispute resolution mediators terminate dispute resolution procedures on the grounds that there is no prospect of reaching a settlement between the parties to a dispute related to financial instruments transaction services through dispute resolution procedures, and the party to the dispute related to financial instruments transaction services which filed the application for dispute resolution procedures files an action on a claim that was subject to the dispute resolution procedures within one month from the day on which that party receives notice of the termination, the action is deemed to have been filed at the time that the claim was filed in dispute resolution procedures in terms of the postponement of completion of prescription.

The provisions of the preceding paragraph also apply if the discontinuation of dispute resolution services, etc. by a designated dispute resolution organization is authorized pursuant to Article 156-60, paragraph (1) or if the designation under Article 156-39, paragraph (1) is rescinded pursuant to Article 156-61, paragraph (1) and there is a dispute related to financial instruments transaction services for which dispute resolution procedures have been implemented as of the day of authorization or rescission, and the party to the dispute related to financial instruments transaction services which has filed the application for dispute resolution procedures files an action on a claim that was subject to those dispute resolution procedures within one month from the day on which the party receives the notice under Article 156-60, paragraph (3) or Article 156-61, paragraph (3), or within one month from the day on which the party comes to know of the authorization or rescission, whichever comes earlier.