Financial Instruments and Exchange Act

It is prohibited for any person to engage in the following acts:

using wrongful means, schemes, or techniques in a purchase and sale or other transaction of securities or in a derivatives transaction, etc. (excluding a cryptoasset-related derivatives transaction, etc. prescribed in Article 171-3, item (i); hereinafter the same applies in this Article, the following Article, and Article 197, paragraph (2), item (i));

acquiring money or other property through the use of a document that contains a false indication regarding a material particular or that lacks an indication of a material particular that is necessary to prevent it from being misleading, or other indication for the purchase and sale or other transaction of securities or a derivatives transaction, etc.; or

using false quotations in order to induce a purchase and sale or other transaction of securities or a derivatives transaction, etc.

It is prohibited for any person to spread rumors, to use fraudulent means, or to commit assault or use intimidation for the purpose of carrying out a public offering of securities, a secondary distribution, a purchase and sale or other transaction of securities, or derivatives transactions, etc., or for the purpose of causing a fluctuation in the market price of securities, etc. (meaning securities, options (excluding cryptoasset-related options prescribed in Article 171-4; the same applies in Article 159, paragraph (1), item (iii) and paragraph (2), item (i) and Article 160, paragraph (1)), or financial instruments (other than securities and crypto-and other assets) or financial indexes (excluding a cryptoasset-related financial index prescribed in Article 171-3, item (i); the same applies in paragraph (1) and paragraph (2), item (i) of Article 159 and Article 160, paragraph (1)) that are connected with derivatives transactions; the same applies in Article 168, paragraph (1), Article 173, paragraph (1), Article 174, paragraph (1), items (i) and (ii), Article 174-2, paragraph (1), item (ii), Article 174-2-2, paragraphs (1), (7), (10) and (11), and Article 197, paragraph (2), item (i)).

It is prohibited for any person to engage in any of the following acts with the aim of misleading others into believing that purchase and sales of securities (limited to purchase and sales of securities that are listed on a financial instruments exchange for purchase and sale, over-the-counter traded securities, or tradable securities; hereinafter the same applies in this Article), market derivatives transactions (excluding a cryptoasset-related market derivatives transaction prescribed in Article 171-5, paragraph (1); hereinafter the same applies in this Article, paragraph (1) of the following Article, Article 161, paragraph (2), and Article 167-3, item (ii)), or over-the-counter derivatives transactions (limited to those involving securities listed on a financial instruments exchange for purchase and sale or financial instruments (excluding crypto-and other assets) listed on a financial instruments exchange for market derivatives transactions, over-the-counter traded securities, or tradable securities (including financial indexes calculated based on their prices or interest rates), or financial indexes listed on a financial instruments exchange for market derivatives transactions; hereinafter the same applies in this Article) are thriving, or otherwise misleading others about the state of these transactions:

conducting a false purchase and sale of securities, a false market derivatives transaction (limited to one specified in Article 2, paragraph (21), item (i)), or a false over-the-counter derivatives transaction (limited to one specified in Article 2, paragraph (22), item (i)) without the intent to transfer the rights;

conducting a false market derivatives transaction (limited to one specified in Article 2, paragraph (21), items (ii) and (iv) through (v)) or a false over-the-counter derivatives transaction (limited to one specified in Article 2, paragraph (22), items (ii), (v) and (vi)) without the intent to pay or receive money;

conducting a false market derivatives transaction (limited to one specified in Article 2, paragraph (21), item (iii)) or a false over-the-counter derivatives transaction (limited to one specified in Article 2, paragraph (22), item (iii) or (iv)) without the intent to grant or acquire the options;

selling financial instruments (excluding selling crypto-and other assets, and limited, in the case of commodities, to a sale through market derivatives transactions (limited to transactions set forth in Article 2, paragraph (21), item (i)), and limited, in the case of financial instruments other than securities, crypto-and other assets, and commodities, to a sale through a transaction set forth in that item or in paragraph (22), item (i) of that Article) after colluding in advance with another party that promises to purchase the financial instruments at the same price and around the same time as the sale (excluding purchasing crypto-and other assets, and limited, in the case of commodities, to a purchase through market derivatives transactions (limited to transactions set forth in paragraph (21), item (i) of that Article), and limited, in the case of financial instruments other than securities, crypto-and other assets, and commodities, to a purchase through a transaction set forth in that item or in paragraph (22), item (i) of that Article);

making one's own purchase (excluding purchasing crypto-and other assets, and limited, in the case of commodities, to a purchase through market derivatives transactions (limited to transactions set forth in Article 2, paragraph (21), item (i)), and limited, in the case of financial instruments other than securities, crypto-and other assets, and commodities, to a purchase through a transaction set forth in that item or in paragraph (22), item (i) of that Article) after colluding in advance with another person to sell the financial instruments at the same time as, and at the same price as, that purchase (excluding selling crypto-and other assets, and limited, in the case of commodities, to a sale through market derivatives transactions (limited to transactions set forth in paragraph (21), item (i) of that Article), and limited, in the case of financial instruments other than securities, crypto-and other assets, and commodities, to a sale through a transaction set forth in that item or in paragraph (22), item (i) of that Article);

making an offer in connection with a market derivatives transaction (limited to one set forth in Article 2, paragraph (21), item (ii)) or an over-the-counter derivatives transaction (limited to one set forth in paragraph (22), item (ii) of that Article) after colluding in advance with another party that promises to become the other party to the transaction at around the same time as the offer and at the same agreed figure as in the offered transaction;

making an offer in connection with a market derivatives transaction (limited to one set forth in Article 2, paragraph (21), item (iii)) or an over-the-counter derivatives transaction (limited to one set forth in paragraph (22), item (iii) or (iv) of that Article) after colluding in advance with another party that promises to become the other party to the transaction at around the same time as the offer and for the same amount of consideration as in the offered transaction;

making an offer in connection with a market derivatives transaction (limited to one set forth in Article 2, paragraph (21), items (iv) through (v)) or over-the-counter derivatives transaction (limited to one set forth in paragraph (22), item (v) or (vi) of that Article) after colluding in advance with another party that promises to become the other party to the transaction at around the same time as the offer and with the same conditions as in the offered transaction; or

entrusting, etc. a person, etc. with an act set forth in the preceding items or becoming entrusted, etc. with such an act.

an act set forth in Article 171-5, paragraph (1), items (i) through (ix); or

It is prohibited for any person to engage in any of the following acts for the purpose of inducing purchase and sales of securities, market derivatives transactions, or over-the-counter derivatives transactions (hereinafter referred to "purchase and sales of securities, etc." in this Article):

conducting a series of purchase and sales of securities, etc. that are likely to mislead a person into believing that purchase and sales of securities, etc. are thriving or to cause fluctuations in market prices of listed financial instruments, etc. (meaning securities listed on a financial instruments exchange for purchase and sale, or financial instruments (excluding crypto-and other assets), financial indexes, or options listed on a financial instruments exchange for market derivatives transactions; hereinafter the same applies in this Article) on a financial instruments exchange market or prices of over-the-counter traded securities on an over-the-counter securities market; offering to conduct such transactions; entrusting, etc. a person with conducting such transactions; or becoming entrusted, etc. with conducting such transactions;

spreading a rumor that market prices of listed financial instruments, etc. on a financial instruments exchange market or market prices of over-the-counter traded securities on an over-the-counter securities market will fluctuate due to one's own or another party's market manipulation; or

intentionally making a false representation regarding a material particular or a representation that causes a person to misunderstand something, in conducting a purchase and sale of securities, etc.

an act set forth in Article 171-5, paragraph (2), items (i) through (iii) (for the acts set forth in items (i) and (ii) of that paragraph, excluding those specified by the Cabinet Office Order prescribed in that paragraph).

It is prohibited for any person to engage in any of the following acts for the purpose of pegging, fixing, or stabilizing market prices of listed financial instruments, etc. on a financial instruments exchange market or the market prices of over-the-counter traded securities on an over-the-counter securities market, in a way that constitutes a violation of the provisions of Cabinet Order:

effecting a series of purchase and sales of securities, etc., offering to conduct such transactions, entrusting, etc. a person with conducting such transactions, or becoming entrusted, etc. with conducting such transactions; or

an act set forth in Article 171-5, paragraph (3), item (i).

A person that violates the provisions of the preceding Article is liable to compensate for damages from purchase and sales of securities on a financial instruments exchange market, market derivatives transactions, purchase and sales of securities on an over-the-counter securities market, and purchase and sales of tradable securities (hereinafter referred to as "purchase and sales of securities, etc. on a financial instruments exchange market, etc." in this paragraph) in connection with a financial instrument (excluding crypto-and other assets), financial index, or option whose price, agreed figure, or amount receivable the person formed through that violation, which damages are incurred by any person that conducts, or entrusts another person with conducting, such a purchase and sale of securities, etc. on a financial instruments exchange market, etc. in connection with that financial instrument (excluding crypto-and other assets), financial index, or option at the so-formed price, agreed figure, or amount receivable.

A claim for compensation under the preceding paragraph extinguishes by prescription if it is not exercised within one year from when the claimant learns that an act that is in violation of the provisions of the preceding Article has taken place or within three years from when the act takes place.

The Prime Minister may specify, in Cabinet Office Order, matters that the Prime Minister finds to be necessary and appropriate for ensuring the public interest or the protection of investors, in order to restrict the purchase and sale of the securities that a financial instruments business operator, etc. or authorized firm for on-exchange transactions conducts on its own account, or restrict a financial instruments business operator, etc. or authorized firm for on-exchange transactions from conducting excessive volumes of purchase and sales which are found to be detrimental to the order of the financial instruments exchange market or the over-the-counter securities market.

The provisions of the preceding paragraph apply mutatis mutandis to market derivatives transactions and over-the-counter derivatives transactions (excluding a cryptoasset-related over-the-counter derivatives transaction prescribed in Article 171-5, paragraph (1)).

The Prime Minister may specify the matters by Cabinet Office Order, which are found to be necessary and appropriate to secure the public interest or protection of investors, in order to restrict commodity-related market derivatives transactions to be conducted by a commodity trading participant on its own account, or restrict excessive volumes of transactions to be conducted by a commodity trading participant if such transactions are found to disturb the order of a financial instruments exchange market.

In a margin transaction or other transaction specified by Cabinet Office Order, a financial instruments business operator, pursuant to the provisions of Cabinet Office Order, must receive money that a customer deposits with it in an amount not less than that arrived at by multiplying the market value of the securities for which the transaction is to be conducted by the rate decided by the Prime Minister with a view to ensuring fairness in purchase and sales and other transactions of securities.

Securities may serve as the money referred to in the preceding paragraph, pursuant to the provisions of Cabinet Office Order.