Payment Services Act

When a funds transfer service provider concludes a guarantee contract for security deposits for providing funds transfer services (meaning a contract in which a deposit-taking institution satisfying the requirements specified by Cabinet Order or any other person specified by Cabinet Order (hereinafter referred to as a "person qualified as a performance guarantor" in this Chapter) promises that security deposits for providing funds transfer services will be made on behalf of the funds transfer service provider in response to an order by the Prime Minister; the same applies in this Chapter) for each category of funds transfer services that it provides and has notified the Prime Minister to that effect, pursuant to the provisions of Cabinet Order, it may choose not to make all or part of the security deposits for providing funds transfer services for the relevant category of funds transfer services with regard to the secured amount (meaning the amount of money to be deposited under the guarantee contract for security deposits for providing funds transfer services; hereinafter the same applies in this Chapter) limited to the period during which the contract remains in force.

If a funds transfer service provider concludes a trust agreement for security deposits for providing funds transfer services with a trust company, etc. (meaning a trust agreement whose purpose is to apply trust property to security deposits for providing funds transfer services in response to an order by the Prime Minister, which states that the trust company, etc. carries out necessary acts including the management of trust property for achieving the purpose of the trust; the same applies hereinafter in this Chapter) for each category of funds transfer service that it provides and has notified the Minister to that effect, it may choose not to make all or part of the security deposits for providing funds transfer services for the relevant category of funds transfer service with regard to the amount of trust property during the period in which the trust property is entrusted pursuant to the trust agreement for security deposits for providing funds transfer services.

A trust agreement for security deposits for providing funds transfer services must provide the following particulars:

the beneficiaries of the trust agreement for security deposits for providing funds transfer services are to be the users of funds transfer transactions carried out by the funds transfer service provider who is the party to the trust agreement for security deposits for providing funds transfer services (limited to funds transfer transactions for the category of funds transfer service pertaining to the trust agreement for security deposits for providing funds transfer services);

an agent of the beneficiaries is appointed;

a trust company, etc. realizes the trust property and deposits the proceeds thereof in response to an order by the Prime Minister; and

other particulars specified by Cabinet Office Order.

The types of the trust properties entrusted pursuant to a trust agreement for security deposits for providing funds transfer services are to be limited to money, bank deposits and savings (limited to those specified by Cabinet Office Order), or national government bond certificates, local government bond certificates or other bond certificates specified by Cabinet Office Order. In this case, the appraised value of those bond certificates is determined pursuant to the provisions of Cabinet Office Order.

When a funds transfer service provider (limited to a person providing type III funds transfer services) has submitted a written notice containing the following particulars to the Prime Minister, pursuant to the provisions of Cabinet Office Order, it may choose not to make all or part of the security deposits for providing type III funds transfer services on or after the day set forth in item (i). In this case, the funds transfer service provider must manage money in the amount equivalent to the amount not less than the amount obtained by multiplying the amount of outstanding obligations in the process of being transferred pertaining to type III funds transfer services as of each business day by the rate set forth in item (ii) (when the rate is changed, the rate that has been changed; hereinafter referred to as the "rate for managing bank deposits or savings" in this Article and Article 59, paragraph (1)) by using the method for managing bank deposits or savings specified in item (i):

the day on which the management of money in the amount equivalent to all or part of the amount of outstanding obligations in the process of being transferred pertaining to type III funds transfer services commences as of each business day by the method for managing bank deposits or savings (limited to bank deposits or savings, which is obvious from the name of the account holder, that the money must be managed pursuant to the provisions of this paragraph) or by another method specified by Cabinet Office Order (hereinafter referred to as the "method for managing bank deposits or savings" in this Article and Article 53, paragraph (2), item (ii));

the percentage of the amount of outstanding obligations in the process of being transferred pertaining to type III funds transfer services that is to be managed by the method for managing bank deposits or savings to the total amount thereof; and

other particulars specified by Cabinet Office Order.

A funds transfer service provider to whom the provisions of the preceding paragraph are applied must undergo a periodic audit by a certified public accountant (including foreign certified public accountant specified in Article 16-2, paragraph (5) of the Certified Public Accountants Act (Act No. 103 of 1948); the same applies hereinafter) or by an audit corporation, with regard to the aspects of management by using the method for managing bank deposits or savings, pursuant to the provisions of Cabinet Office Order.

When a funds transfer service provider to whom the provisions of paragraph (1) are applied intends to change the rate of management by bank deposits or savings or other particulars specified by Cabinet Office Order, the funds transfer service provider must submit a written notice containing the day on which the change is to be made and other particulars specified by Cabinet Office Order to the Prime Minister in advance, pursuant to the provisions of Cabinet Office Order.

A change to lower the rate for managing bank deposits or savings may be made only in the case where the total amount of security deposits for providing funds transfer services, the secured amount, the amount of trust property specified in paragraph (1) of the preceding Article, the performance guarantor's debt assumption amount specified in paragraph (1) of the following Article, the performance guarantor's guarantee amount specified in Article 45-4, paragraph (1) and the amount of the trust for repayment in place of security deposits specified in Article 45-5, paragraph (1) (or, if that amount of the trust for repayment in place of security deposits exceeds the amount of trust property held in trust under the trust agreement for repayment in place of security deposits for providing funds transfer services prescribed in that paragraph, that amount of trust property) pertaining to type III funds transfer services as of the day on which the change is to be made that is stated in the written notice referred to in the preceding paragraph is the amount required for deposit pertaining to type III funds transfer services (meaning the amount of security deposits for providing funds transfer services that a funds transfer service provider to whom the provisions of paragraph (1) are applied must deposit for type III funds transfer services it provides, when making the relevant change, under the provisions of Article 43, paragraph (1)) as of the base date immediately preceding that day, or more.

A funds transfer service provider to whom the provisions of paragraph (1) are applied may terminate the application of the provisions of that paragraph by submitting a written notice containing the day on which the application of the provisions of that paragraph ends (hereinafter referred to as the "day on which the management by bank deposits or savings ends" in this paragraph) and other particulars specified by Cabinet Office Order to the Prime Minister, pursuant to the provisions of Cabinet Office Order; provided, however, that this does not apply when the total amount of security deposits for providing funds transfer services, the secured amount, the amount of trust property specified in paragraph (1) of the preceding Article, the performance guarantor's debt assumption amount specified in paragraph (1) of the following Article, the performance guarantor's guarantee amount specified in Article 45-4, paragraph (1) and the amount of the trust for repayment in place of security deposits specified in Article 45-5, paragraph (1) (or, if that amount of the trust for repayment in place of security deposits exceeds the amount of trust property held in trust under the trust agreement for repayment in place of security deposits for providing funds transfer services prescribed in that paragraph, that amount of trust property) pertaining to type III funds transfer services as of the day on which the management by bank deposits or savings ends is less than the amount required for deposit pertaining to type III funds transfer services (meaning the amount of security deposits for providing funds transfer services that the funds transfer service provider must deposit for type III funds transfer services it provides, when terminating the application of the provisions of paragraph (1), under the provisions of Article 43, paragraph (1)) as of a base date immediately preceding that day on which the management by bank deposits or savings ends.

When a funds transfer service provider has concluded a performance guarantor's debt assumption contract (meaning a contract in which a person qualified as a performance guarantor assumes the amount of all or part of the obligations that the funds transfer service provider bears to all or part of the users of that category of funds transfer services with regard to funds transfer transactions pertaining to those funds transfer services, when a petition for commencement of bankruptcy proceedings, etc. is filed against the funds transfer service provider; the same applies in this Chapter) with a person qualified as a performance guarantor for each category of funds transfer services that it provides and has notified the Prime Minister to that effect, it may choose not to make all or part of the security deposits for providing funds transfer services for the relevant category of funds transfer services with regard to the amount of obligations that the person qualified as a performance guarantor is to assume under that performance guarantor's debt assumption contract (hereinafter referred to as the "performance guarantor's debt assumption amount" in this Chapter), limited to the period during which that performance guarantor's debt assumption contract remains in force.

A performance guarantor's debt assumption contract must include the following particulars:

in response to an order by the Prime Minister, a person qualified as a performance guarantor deposits all or part of the performance guarantor's debt assumption amount in lieu of the assumption of obligations to users of funds transfer services under the performance guarantor's debt assumption contract or the performance of the obligations so assumed; and

other particulars specified by Cabinet Office Order.

When a funds transfer service provider has entrusted a person qualified as a performance guarantor, for each category of funds transfer services that it provides, with the conclusion, with the users of those funds transfer services, of a performance guarantor's guarantee contract (meaning a contract in which the person qualified as a performance guarantor guarantees all or part of the obligations that the funds transfer service provider bears to those users with regard to funds transfer transactions pertaining to that category of funds transfer services, when a petition for commencement of bankruptcy proceedings, etc. is filed against the funds transfer service provider; the same applies in this Chapter), and has notified the Prime Minister that, based on that entrustment, a performance guarantor's guarantee contract has been concluded between the person qualified as a performance guarantor and those users, it may choose not to make all or part of the security deposits for providing funds transfer services for the relevant category of funds transfer services with regard to the amount of the guarantee obligations that the person qualified as a performance guarantor is to bear to those users under that performance guarantor's guarantee contract (hereinafter referred to as the "performance guarantor's guarantee amount" in this Chapter), limited to the period during which that performance guarantor's guarantee contract remains in force.

A performance guarantor's guarantee contract must include the following particulars:

in response to an order by the Prime Minister, a person qualified as a performance guarantor deposits all or part of the performance guarantor's guarantee amount in lieu of the performance of the guarantee obligations to users of funds transfer services under the performance guarantor's guarantee contract; and

other particulars specified by Cabinet Office Order.