Article 87-3Scope of Subsidiary Companies

①A financial instruments exchange must not have a company other than one that operates a financial instruments exchange market or engages in business incidental to this as its subsidiary company; provided, however, that with the authorization of the Prime Minister, it may have a company that engages business that is linked to the operation of a financial instruments exchange market, a company that is in the business of operating the necessary market for effecting commodity futures transactions (including business incidental thereto; hereinafter referred to as the "operation of a commodity market"), or a company that engages in business that is linked to the operation of the necessary market for effecting commodity futures transactions, as its subsidiary company.

②Notwithstanding the provisions of the preceding paragraph, a financial instruments exchange engaged in the operation of a commodity market may have a company engaged in the operation of a commodity market as its subsidiary company.

③The term "subsidiary company" as used in the preceding two paragraphs means a company in which a corporation holds the majority of the voting rights held by all the shareholders, etc. In such a case, a company in which a corporation and one or more of its subsidiary companies hold the majority of the voting rights held by all the shareholders, etc., or in which one or more of a corporation's subsidiary companies hold the majority of the voting rights held by all the shareholders, etc., is deemed to be the subsidiary company of that corporation.

④Notwithstanding the provisions of paragraph (1), a financial instruments exchange may incorporate a self-regulatory organization, with the authorization of the Prime Minister.

⑥The provisions of paragraph (1) do not apply if a financial instruments exchange owns a foreign company other than a company eligible to be a subsidiary company (meaning a company that operates a financial instruments exchange market and performs other business incidental thereto and a company as prescribed in the proviso to that paragraph; hereinafter the same applies in this Article and Article 87-4-2, paragraph (1)) as its subsidiary company, by owning, as its subsidiary company, a company eligible to be a subsidiary company (limited to a foreign company; hereinafter referred to as a "foreign company eligible to be a subsidiary company" in this paragraph and paragraph (8)) or a holding company subject to special provisions (meaning a holding company or a foreign company which is the same type as a holding company or is similar to a holding company that currently owns a foreign company eligible to be a subsidiary company as its subsidiary company; the same applies in paragraph (8)) that currently owns a foreign company other than a company eligible to be a subsidiary company as its subsidiary company; provided, however, that the financial instruments exchange must take the necessary measures for making the foreign company other than a company eligible to be a subsidiary company cease to be its subsidiary company by the day on which five years have elapsed from the date on which the foreign company other than a company eligible to be a subsidiary company became its subsidiary company.

⑦If the time limit referred to in the proviso to the preceding paragraph or the time limit as extended pursuant to the provisions of this paragraph is to arrive, the financial instruments exchange may have these time limits extended for up to one year by obtaining the Prime Minister's approval for allowing the financial instruments exchange to continue to own, as its subsidiary company, the foreign company other than a company eligible to be a subsidiary company which became its subsidiary company.

⑧The Prime Minister is to give the approval referred to in the preceding paragraph only if the financial instruments exchange falls under any of the following items: