Financial Instruments and Exchange Act

A financial instruments intermediary service provider must not allow another person to engage in financial instruments intermediary services using the name of the relevant financial instruments intermediary service provider.

When advertising the contents of its financial instruments intermediary service or performing any similar act specified by Cabinet Office Order, a financial instruments intermediary service provider must give the following particulars, pursuant to the provisions of Cabinet Office Order:

the trade name or name of the financial instruments intermediary service provider;

an indication that the financial instruments intermediary service provider is a financial instruments intermediary service provider, and its registration number; and

the particulars of the contents of the financial instruments intermediary service that the financial instruments intermediary service provider engages in, which is specified by Cabinet Order as material particulars that may have an impact on customers' judgment.

When advertising the contents of its financial instruments intermediary service or engaging in any similar act specified by Cabinet Office Order, a financial instruments intermediary service provider must not make a representation that significantly conflicts with the fact of the matter or that could cause a person to have a serious misconception about the prospect of profiting from the performance of an act that constitutes a financial instruments transaction, or about any other matter that is specified by Cabinet Office Order.

If a financial instruments intermediary service provider seeks to perform an act prescribed in any of the items of Article 2, paragraph (11) (hereinafter referred to as the "intermediation for financial instruments" in this Chapter), it must clearly indicate the following particulars to customers in advance:

the trade name or the name of the entrusting financial instruments business operator, etc.;

that the financial instruments intermediary service provider does not have authority of representation in respect of the entrusting financial instruments business operator, etc.;

the import of the provisions of Article 66-13; and

other matters specified by Cabinet Office Order.

A financial instruments intermediary service provider (excluding a person that is a financial instruments business operator) must not engage in any act set forth in the items of Article 2, paragraph (8), except for the intermediation for financial instruments to which a customer of its financial instruments intermediary service is the other party, as entrusted by the entrusting financial instruments business operator, etc.

A financial instruments intermediary service provider must not, for any reason, receive a deposit of money or securities from a customer, or have a person specified by Cabinet Order as being closely related to that financial instruments intermediary service provider deposit a customer's money or securities, in connection with the financial instruments intermediary service it conducts.

It is prohibited for a financial instruments intermediary service provider or its officer or employee to engage in the following acts:

the performance of any of the following acts in connection with financial instruments intermediary services:

an act that falls under Article 38, item (i);

an act that falls under any of the categories in Article 38, items (ii) through (vi);

an act that falls under Article 38, item (vii);

if it provides investment advisory business (meaning investment advisory business set forth in Article 28, paragraph (7); the same applies in (d)), using information about a purchase and sale or other transaction of securities that a customer makes based on the advice provided through its investment advisory business in order to solicit a customer other than the customer in question; or if it engages in investment management business, using information about a purchase and sale or other transaction of securities made as an investment in connection with its investment management business, in order to solicit a customer other than the customer in question;

if it engages in business other than financial instruments intermediary service, using information about an issuer of securities learned in the course of that other business (limited to undisclosed information about the operations, business, or assets of an issuer of securities that would influence customers' investment decisions in connection with financial instruments intermediary service) to conduct solicitation; or

conducting a solicitation with the financial instruments intermediary service provider's lending of money or granting of other credit as a condition (excluding acts specified in Cabinet Office Order as acts that are found to have little likelihood of resulting in insufficient investor protection);

making a purchase and sale or other transaction of securities on the intermediary's, officer's, or employee's own account, using the ordering trends for purchase and sales and other transactions of securities made by customers of its financial instruments intermediary service or other special information learned in the course of financial instruments intermediary service; and

acts beyond what is set forth in the preceding two items, which are specified by Cabinet Office Order as acts that result in insufficient investor protection, harm the fairness of transactions, or cause a loss of confidence in financial instruments intermediary services.

A financial instruments intermediary service provider must not conduct any of the acts specified in Article 2, paragraph (11), item (i), (a) or (b) in connection with securities for professional investors, etc. with a general investor (meaning a person other than a professional investor, etc., a non-resident, the issuer of the securities for professional investors, etc., or any other person specified by Cabinet Office Order; hereinafter the same applies in this Article) as the other party; provided, however, that this does not apply in a case in which disclosure has been made with regard to the securities for professional investors, etc., a case in which the financial instruments intermediary service provider intermediates, a purchase for an entrusting financial instruments business operator, etc. which is not based on a solicitation of general investors, or any other case specified by Cabinet Office Order as having little likelihood of resulting in insufficient investor protection.

The provisions of Article 35-3, Article 38-2, Article 39, paragraphs (1), (3), (4), and (7), Article 40, and Article 43-6 apply mutatis mutandis to a financial instruments intermediary service provider, Article 39, paragraphs (2), (5), and (6) apply mutatis mutandis to the customer of a financial instruments intermediary service provider, and Article 43-13 applies mutatis mutandis to a financial instruments intermediary service provider that conducts intermediary services for purchase and sale, etc. of cryptoassets. In this case, in Article 39, paragraph (3), the phrase "if the financial instruments business operator, etc. receives" is deemed to be replaced with "if the entrusting financial instruments business operator, etc. of the financial instruments intermediary service provider receives", and any other necessary technical replacement of terms is specified by Cabinet Order.

A financial instruments intermediary service provider must prepare and preserve books and documents for its financial instruments intermediary service pursuant to the provisions of Cabinet Office Order.

Each business year, a financial instruments intermediary service provider must prepare a report on its financial instruments intermediary service and submit it to the Prime Minister within three months after the end of the business year, pursuant to the provisions of Cabinet Office Order.

Each business year, pursuant to the provisions of Cabinet Office Order, a financial instruments intermediary service provider must prepare documents stating those of the particulars stated in the business report referred to in the preceding paragraph which are specified by Cabinet Office Order as particulars that are found to be necessary in terms of investor protection, and must, pursuant to the provisions of Cabinet Office Order, keep those documents at all of the business offices and offices at which it conducts financial instruments intermediary service and make them available for public inspection, or disclose them using the internet or through other means.

For each business year of an entrusting financial instruments business operator, etc., a financial instruments intermediary service provider must, pursuant to the provisions of Cabinet Office Order, keep the explanatory documents that the entrusting financial instruments business operator, etc. prepares pursuant to the provisions of Article 46-4 or Article 47-3 (if the entrusting financial instruments business operator, etc., is a registered financial institution, the documents that it prepares pursuant to the provisions of Article 21, paragraphs (1) and (2) of the Banking Act (Act No. 59 of 1981) or other provisions specified by Cabinet Order) at all of the business offices and offices at which it conducts financial instruments intermediary service, and must make them available for public inspection, or disclose them using the internet or through other means.