Financial Instruments and Exchange Act

Each business year, an investment management-related services contractor must, pursuant to the provisions of Cabinet Office Order, prepare a business report and submit it to the Prime Minister within three months after the end of each business year.

If an investment management-related services contractor comes to fall under any of the following items, the person specified in the relevant item must notify the Prime Minister to that effect within 30 days from that day.

an individual who is an investment management-related services contractor dies:the heir;

it discontinues the investment management-related services contracting business (limited to that for which it has received the Article 66-71 registration or the Article 66-75, paragraph (4) registration of a change; the same applies in item (vi)):that corporation or individual;

a corporation that is an investment management-related services contractor is extinguished by a merger:the person who was an officer representing that corporation;

a corporation that is an investment management-related services contractor dissolves as a result of an order to commence bankruptcy proceedings:the bankruptcy trustee;

a corporation that is an investment management-related services contractor dissolves for reasons other than a merger or an order to commence bankruptcy proceedings:the liquidator;

a corporation that is an investment management-related services contractor has another person succeed to the whole of its business (limited to business pertaining to the investment management-related services contracting business; the same applies in the following item) through a company split:that corporation;

it transfers the whole of its business:that corporation or individual.

If an investment management-related services contractor comes to fall under any of the items of the preceding paragraph, the Article 66-71 registration of that investment management-related services contractor loses its validity.

If the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors concerning an investment management-related services contractor's operation of business or the state of its assets, the Prime Minister may, to the extent necessary, order the investment management-related services contractor to take measures necessary for improving its business operations or the state of its assets, such as changing its business methods.

In the case where an investment management-related services contractor falls under any of the following items, the Prime Minister may rescind the Article 66-71 registration of that investment management-related services contractor, or specify a period not exceeding six months and order the suspension of all or part of its investment management-related services contracting business.

it comes to fall under any of the items of Article 66-74 (excluding item (vii), (a));

it has received the Article 66-71 registration by wrongful means;

it violates a law or regulation or a disposition by a government agency which is based on a law or regulation, in connection with its investment management-related services contracting business;

in connection with its investment management-related services contracting business, it has committed an unlawful or grossly inappropriate act, and the circumstances are particularly serious.

If an officer of an investment management-related services contractor (for a foreign corporation, this is limited to an officer stationed at its domestic business office or office, or its domestic representative; hereinafter the same applies in this paragraph) comes to fall under Article 66-74, item (vii), (a)(1) or (2), is discovered to have already fallen under (a)(1) or (2) of that item at the time of the Article 66-71 registration, or comes to fall under item (iii) or (iv) of the preceding paragraph, the Prime Minister may order the investment management-related services contractor to dismiss that officer.

If the Prime Minister is unable to ascertain the location of the business offices or offices of an investment management-related services contractor, or is unable to ascertain the whereabouts of an investment management-related services contractor (where it is a corporation, the whereabouts of the officer representing that corporation), the Prime Minister, pursuant to the provisions of Cabinet Office Order, may issue public notice of that fact and rescind the registration of that investment management-related services contractor if no filing is made by that investment management-related services contractor even after 30 days past the day of the public notice.

The provisions of Chapter III of the Administrative Procedure Act do not apply to a disposition under the preceding paragraph.

If the Prime Minister has rescinded an Article 66-71 registration pursuant to the provisions of paragraph (1) or (3) of the preceding Article, or has ordered the suspension of all or part of business pursuant to the provisions of paragraph (1) of the preceding Article, the Prime Minister must issue public notice to that effect pursuant to the provisions of Cabinet Office Order.

When an application is filed by an investment management-related services contractor for the deletion of the Article 66-71 registration, if the Article 66-71 registration loses its validity pursuant to the provisions of Article 66-83, paragraph (2), or if the Prime Minister rescinds the Article 66-71 registration pursuant to the provisions of Article 66-85, paragraph (1) or (3), the Prime Minister must delete that registration.

When the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order an investment management-related services contractor, a person that does business with it, or a person that the investment management-related services contractor has entrusted with its business (including a person that has received entrustment from that person (including entrustment at two or more degrees of separation from the original entrustment); hereinafter the same applies in this Article) to report or submit materials that should serve as a reference with regard to the business or assets of the investment management-related services contractor, and may have the relevant officials inspect the state of the business or assets, or the records and any other articles, of the investment management-related services contractor or a person that the investment management-related services contractor has entrusted with its business (but may only have the relevant officials inspect a person that the investment management-related services contractor has entrusted with its business as is necessary in connection with the business or assets of the investment management-related services contractor).

When seeking to refuse the Article 66-71 registration or the Article 66-75, paragraph (4) registration of a change, the Prime Minister must notify the applicant for registration or the investment management-related services contractor, and have the relevant officials conduct a hearing regarding the applicant for registration or the investment management-related services contractor.

Irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, before seeking to take a disposition based on the provisions of Article 66-84 or Article 66-85, paragraph (1), the Prime Minister must conduct a hearing.

When the Prime Minister has decided to grant or not to grant the Article 66-71 registration or the Article 66-75, paragraph (4) registration of a change, or has decided to take a disposition based on the provisions of Article 66-84 or Article 66-85, paragraph (1) or (2), the Prime Minister must notify the applicant for registration or the investment management-related services contractor to that effect in writing.

If the domestic representative of an investment management-related services contractor (limited to a foreign corporation; hereinafter the same applies in this Article) is absent and the Prime Minister finds it to be necessary, the Prime Minister may appoint a person to temporarily perform that representative's duties (referred to as an "acting representative" in the following paragraph). In this case, the investment management-related services contractor must register this at the location of its principal business office or office in Japan.

If the Prime Minister has appointed an acting representative pursuant to the provisions of the preceding paragraph, the Prime Minister may order the investment management-related services contractor to pay that acting representative a reasonable amount of remuneration.

In applying the provisions of Article 66-82 where an investment management-related services contractor is a foreign corporation or an individual with an address in a foreign country, the phrase "within three months" in that Article is deemed to be replaced with "within the period specified by Cabinet Order"; beyond this, technical replacement of terms in applying the provisions of this Act where an investment management-related services contractor is a foreign corporation or an individual with an address in a foreign country, and any other necessary matters concerning the application of the provisions of this Act to that foreign corporation or individual, are specified by Cabinet Order.

Procedures for implementing the provisions of Article 66-71 through the preceding Article and any other necessary matters are specified by Cabinet Office Order.

The Prime Minister, in supervising an investment management-related services contractor, must give due consideration to respecting the voluntary efforts of the investment management-related services contractor to run its business.