①If a securities registration statement contains a false statement regarding a material particular, lacks a statement of a material particular that is required to be stated, or lacks a statement of a material fact that is necessary to prevent it from being misleading, the person that submitted the securities registration statement is liable to compensate for damage sustained by a person that acquires the securities through the public offering or secondary distribution; provided, however, that this does not apply if the person that acquires the securities knows that the statement is false or has been omitted at the time the person offers to acquire the securities.

②The preceding paragraph applies mutatis mutandis if a prospectus referred to in Article 13, paragraph (1) contains a false statement regarding a material particular, lacks a statement of a material particular that is required to be stated, or lacks a statement of a material fact that is necessary to prevent it from being misleading. In this case, in the preceding paragraph, the phrase "the person that submitted the securities registration statement" is deemed to be replaced with "the issuer that prepared the prospectus" and the phrase "through the public offering or secondary distribution" is deemed to be replaced with "through the public offering or secondary distribution after receiving the prospectus".

①The amount of compensation for which a person is liable pursuant to the preceding Article is the amount calculated by deducting the amount specified in each of the following items from the amount that the claimant paid to acquire the securities:

②If the person that would be liable to compensate pursuant to the preceding Article proves that all or part of the damage sustained by the claimant is due to circumstances other than the decline in the value of the securities that would have arisen from the securities registration statement or the prospectus containing a false statement regarding a material particular, lacking a statement of a material particular that is required to be stated, or lacking a statement of a material fact that is necessary to prevent it from being misleading, the person is not liable for the whole or such part of the compensation.

A claim for compensation under the provisions of Article 18 extinguishes by prescription in the following cases:

①If a securities registration statement contains a false statement regarding a material particular, lacks a statement of a material particular that is required to be stated, or lacks a statement of material fact that is necessary to prevent it from being misleading, the following persons are liable to compensate a person that acquires the relevant securities through a public offering or secondary distribution, for damage arising from the statement being false or having been omitted; provided, however, that this does not apply if the person that acquires the securities knows that the statement is false or has been omitted at the time the person offers to acquire the securities:

②In the case referred to in the preceding paragraph, a person set forth in any of the following items is not liable for the compensation set forth in that paragraph, if that person proves the particular set forth in the relevant item:

③The provisions of paragraph (1), items (i) and (ii), and item (i) of the preceding paragraph apply mutatis mutandis if a prospectus referred to in Article 13, paragraph (1) contains a false statement regarding a material particular, lacks a statement of a material particular that is required to be stated, or lacks a statement of a material fact that is necessary to prevent it from being misleading. In this case, in paragraph (1), the phrase "through the relevant public offering or secondary distribution" is deemed to be replaced with "through the relevant public offering or secondary distribution after receipt of the prospectus", the phrase "the company that submitted the securities registration statement" is deemed to be replaced with "the company that prepared the prospectus", the phrase "at the time of submission" is deemed to be replaced with "at the time of preparation", and the phrase "was submitted" is deemed to be replaced with "was prepared".

④The term "wholesale underwriting contract" as used in paragraph (1), item (iv) means one of the following contracts concluded on the occasion of a public offering or secondary distribution of securities:

①If a document set forth in the items of Article 25, paragraph (1) (excluding items (iv) and (vii)) (hereinafter referred to as a "document" in this Article) contains a false statement regarding a material particular, lacks a statement of a material particular that is required to be stated, or lacks a statement of a material fact that is necessary to prevent it from being misleading, the person submitting the document is liable to compensate a person that, during the period the document is being made available for public inspection as required by Article 25, paragraph (1), acquires or disposes of securities of which the person submitting the document (excluding a document set forth in Article 25, paragraph (1), item (x)) or a person whose parent company, etc. (meaning a parent company, etc. as defined by Article 24-7, paragraph (1)) is the person submitting the document (limited to a document set forth in Article 25, paragraph (1), item (x)) is the issuer, other than through a public offering or secondary distribution, for damage arising from the statement being false or having been omitted (hereinafter collectively referred to as a "false statement, etc." in this Article), to an extent not exceeding the amount calculated in accordance with the rule provided in Article 19, paragraph (1); provided, however, that this does not apply if the person that acquires or disposes of the securities knows of the false statement, etc. at the time of the acquisition or disposal.

②In the case referred to in the preceding paragraph, if the person that would be liable to compensate proves that they did not intentionally or negligently make the false statement, etc. in the relevant document, that person is not liable for the compensation under the provisions of that paragraph.

③In the case referred to in the main clause of paragraph (1), if the fact that a false statement, etc. in the relevant document is contained is disclosed, a person that has acquired the relevant securities within the one year prior to the day of the disclosure of the existence of the false statement, etc. (hereinafter referred to as the "disclosure date" in this paragraph) and that continues to hold the securities on the disclosure date, may assert the amount calculated by deducting the average market value (or, if no market value exists, the estimated disposal value; hereinafter the same applies in this paragraph) during the one month after the disclosure date from the average market value during one month prior to the disclosure date, to be the amount of damage arising from the document's false statement, etc.

④The term "disclosure of the existence of a false statement, etc." as used in the preceding paragraph means that the person submitting the document or a person that has statutory authority over the person submitting the document has taken measures to put the material particular that is required to be stated and that the document's false statement, etc. concerns or the material fact that is necessary to prevent the document from being misleading in connection with the same, into a form that allows for a large number of persons to learn of it through public inspection provided in Article 25, paragraph (1) or through other means.

⑤In the case referred to in paragraph (3), if the person that would be liable to compensate proves that the whole or part of the damage sustained by the claimant was due to circumstances other than the decline in the value of the securities that could have arisen from the document's false statement, etc., the person is not liable for the whole or such part of the compensation.

⑥In a case referred to in paragraph (3) other than one referred to in the preceding paragraph, if the court finds that the whole or part of the damage sustained by the claimant was due to circumstances other than the decline in the value of the securities that could have arisen from the document's false statement, etc., but that it is extremely difficult to prove the amount of damage arising from such other circumstances due to the nature, based on the entire import of oral arguments and the results of an examination of evidence, the court may determine an appropriate amount as the amount of damage for which the relevant person is not liable to compensate.

The provisions of Article 20 apply mutatis mutandis to a claim for compensation under the preceding Article. In this case, in Article 20, the term "Article 18" is deemed to be replaced with "Article 21-2", in item (i) of that Article, the phrase "the securities registration statement or the prospectus" is deemed to be replaced with "a document set forth in one of the items of Article 25, paragraph (1) (excluding items (iv) and (vii))", the term "three years" is deemed to be replaced with "two years", and in item (ii) of that Article, the phrase "for seven years (excluding, if an order for suspension under Article 10, paragraph (1) or Article 11, paragraph (1) has been issued, the period from the day on which the order for suspension is issued to the day on which the order is canceled) from the time when the notification under the provisions of Article 4, paragraphs (1) through (3) for the public offering or secondary distribution of the securities becomes effective or the prospectus is delivered" is deemed to be replaced with "for five years from the time when the document is submitted".

①If a securities registration statement contains a false statement regarding a material particular, omits a statement of a material particular that is required to be stated, or lacks a statement of material fact that is necessary to prevent it from being misleading, persons set forth in Article 21, paragraph (1), items (i) and (iii) are liable to compensate a person that, without knowing that the statement is false or has been omitted, acquires or disposes of securities issued by the person submitting the securities registration statement other than through a public offering or secondary distribution, for damage arising from the statement being false or having been omitted.

②The provisions of Article 21, paragraph (2), items (i) and (ii) apply mutatis mutandis to a person that would be liable for the compensation set forth in the preceding paragraph.