Financial Instruments and Exchange Act (Act No. 25 of 1948)

563 Pages·2009·2.72 MB·English

This English translation of the Financial Instruments and Exchange Act has been prepared (up
to the revisions of Act No.99 of 2007 (Effective April 1, 2008) in compliance with the Standard
Bilingual Dictionary (March 2007 edition). This is an unofficial translation. Only the original
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Financial Instruments and Exchange Act (Act No. 25 of 1948)

Chapter I General Provisions (Article 1 and Article 2)
Chapter II Disclosure of Corporate Affairs and Other Related Matters
(Article 2-2 - Article 27)
Chapter II-II Disclosure Required for Tender Offer
Section 1 Tender Offer for Share Certificates, etc. by Person Other Than
Issuer (Article 27-2 - Article 27-22)
Section 2 Tender Offer for Share Certificates, etc. by Issuer (Article
27-22-2 - Article 27-22-4)
Chapter II-III Disclosure of Status of Large Volume Holding of Share
Certificates, etc. (Article 27-23 - Article 27-30)
Chapter II-IV Special Provisions, etc. for Procedures by Use of Electronic
Data Processing System for Disclosure (Article 27-30-2 -
Article 27-30-11)
Chapter III Financial Instruments Business Operators, etc.
Section 1 General Provisions
Subsection 1 General Rules (Article 28)
Subsection 2 Financial Instruments Business Operators (Article 29 -
Article 31-5)
Subsection 3 Major Shareholders (Article 32 - Article 32-4)
Subsection 4 Registered Financial Institutions (Article 33 - Article
33-8)
Subsection 5 Professional Investors (Article 34 - Article 34-5)
Section 2 Businesses
Subsection 1 General Rules (Article 35 - Article 40-3)
Subsection 2 Special Provisions Concerning Investment Advisory
Business (Article 41 - Article 41-5)
Subsection 3 Special Provisions Concerning Investment Management
Business (Article 42 - Article 42-8)
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Subsection 4 Special Provisions Concerning Securities, etc.
Management Business (Article 43 - Article 43-4)
Subsection 5 Preventive Measures against Adverse Effects (Article 44
- Article 44-4)
Subsection 6 Miscellaneous Provisions (Article 45)
Section 3 Accounting
Subsection 1 Financial Instruments Business Operator Engaged in
Type I Financial Instruments Business (Article 46 -
Article 46-6)
Subsection 2 Financial Instruments Business Operators not Engaged
in Type I Financial Instruments Business (Article 47 -
Article 47-3)
Subsection 3 Registered Financial Institutions (Article 48 - Article
48-3)
Subsection 4 Special Provisions for Foreign Juridical Persons, etc.
(Article 49 - Article 49-5)
Section 4 Supervision (Article 50 - Article 57)
Section 5 Special Provisions for Foreign Business Operators
Subsection 1 Foreign Securities Brokers (Article 58 - Article 58-2)
Subsection 2 Permission of Part of Underwriting Business (Article 59 -
Article 59-6)
Subsection 3 Permission of Transaction-at-Exchange Operation
(Article 60 - Article 60-13)
Subsection 4 Person Who Conducts Investment Advisory Business or
Investment Management Business in Foreign State
(Article 61)
Subsection 5 Establishment of an Institution for Collecting
Information (Article 62)
Section 6 Special Provisions Concerning Specially Permitted Businesses
for Qualified Institutional Investor, etc. (Article 63 - Article
63-4)
Section 7 Sales Representatives (Article 64 - Article 64-9)
Section 8 Miscellaneous Provisions (Article 65 - Article 65-6)
Chapter III-II Financial Instruments Intermediary Service Providers
Section 1 General Provisions (Article 66 - Article 66-6)
Section 2 Business (Article 66-7 - Article 66-15)
Section 3 Accounting (Article 66-16 - Article 66-18)
Section 4 Supervision (Article 66-19 - Article 66-23)
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Section 5 Miscellaneous Provisions (Article 66-21 - Article 66-26)
Chapter IV Financial Instruments Firms Association
Section 1 Authorized Financial Instruments Firms Association
Subsection 1 Establishment and Business (Article 67 - Article 67-20)
Subsection 2 Association Members (Article 68 and Article 68-2)
Subsection 3 Management (Article 69 - Article 72)
Subsection 4 Supervision (Article 73 - Article 76)
Subsection 5 Miscellaneous Provisions (Article 77 - Article 77-7)
Section 2 Public Interest Corporation-Type Financial Instruments Firms
Associations
Subsection 1 Recognition and Activities (Article 78 - Article 79)
Subsection 2 Supervision (Article 79-2 - Article 79-6)
Section 3 Certified Investor Protection Organization (Article 79-7 -
Article 79-19)
Chapter IV-II Investor Protection Fund
Section 1 General Provisions (Article 79-20 - Article 79-25)
Section 2 Members (Article 79-26 - Article 79-28)
Section 3 Establishment (Article 79-29 - Article 79-33)
Section 4 Management (Article 79-34 - Article 79-48)
Section 5 Business (Article 79-49 - Article 79-62)
Section 6 Burden Charge (Article 79-63 - Article 79-67)
Section 7 Finance and Accounting (Article 68 - Article 79-74)
Section 8 Supervision (Article 79-75 - Article 79-77)
Section 9 Dissolution (Article 79-78 - Article 79-80)
Chapter V Financial Instruments Exchange
Section 1 General Provisions (Article 80 - Article 89-9)
Section 2 Financial Instruments Membership Corporation and
Self-Regulation Organization; and Stock Company Which
Establishes Financial Instruments Exchange Market
Subsection 1 Financial Instruments Membership Corporation
Division 1 Establishment (Article 88 - Article 88-22)
Division 2 Registration (Article 89 - Article 90)
Division 3 Members (Article 91 - Article 96)
Division 4 Administration (Article 97 - Article 99)
Division 5 Dissolution (Article 100 - Article 100-25)
Division 6 Entity Conversion (Article 101 - Article 102)
Subsection 1-2 Self-Regulation Organization
Division 1 Establishment (Article 102-2 - Article 102-7)
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Division 2 Registration (Article 102-8 - Article 102-11)
Division 3 Membership (Article 102-12 - Article 102-13)
Division 4 Self-Regulation Related Services (Article 102-14 - Article
102-20)
Division 5 Administration (Article 102-21 - Article 102-34)
Division 6 Dissolution (Article 102-35 - Article 102-39)
Subsection 2 Stock Company which Establishes Financial Instruments
Exchange Markets
Division 1 General Provisions (Article 103 - Article 105-3)
Division 2 Self-Regulating Committee (Article 105-4 - Article 106-2)
Division 3 Major Shareholders (Article 106-3 - Article 106-9)
Division 4 Financial Instruments Exchange Holding Company
(Article 106-10 - Article 109)
Section 3 Sales and Purchase of Securities, etc. in Financial
Instruments Exchange Market (Article 110 - Article 133)
Section 4 Dissolution, etc. of Financial Instruments Exchange
Subsection 1 Dissolution (Article 134 and Article 135)
Subsection 2 Merger
Division 1 General Rules (Article 136)
Division 2 Merger between Membership-Type Financial Instruments
Exchange and Membership-Type Financial Instruments
Exchange (Article 137, Article 138)
Division 3 Merger between Membership-Type Financial Instruments
Exchange and Stock Company-Type Financial
Instruments Exchange (Article 139, Article 139-2)
Division 4 Merger Procedures of Membership-Type Financial
Instruments Exchange (Article 139-3 - Article 139-6)
Division 5 Merger Procedures of Stock Company-Type Financial
Instruments Exchange (Article 139-7 - Article 139-21)
Division 6 Effectuation, etc. of Merger (Article 140 - Article 147)
Section 5 Supervision (Article 148 - Article 153-4)
Section 6 Miscellaneous Provisions (Article 154 and Article 154-2)
Chapter V-II Foreign Financial Instruments Exchange
Section 1 General Provisions (Article 155 - Article 155-5)
Section 2 Supervision (Article 155-6 - Article 155-10)
Section 3 Miscellaneous Provision (Article 156)
Chapter V-III Financial Instruments Clearing Organization, etc.
Section 1 Financial Instruments Clearing Organization (Article 156-2 -
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Article 156-20)
Section 2 Miscellaneous Provisions (Article 156-21, Article 156-22)
Chapter V-IV Securities Finance Company (Article 156-23 - Article
156-37)
Chapter VI Regulations on Transactions, etc. of Securities (Article 157 -
Article 171)
Chapter VI-II Administrative Monetary Penalty
Section 1 Payment Order (Article 172 - Article 177)
Section 2 Trial Procedures (Article 178 - Article 185-17)
Section 3 Lawsuit (Article 185-18)
Section 4 Miscellaneous Provisions (Article 185-19 - Article 185-21)
Chapter VII Miscellaneous Provisions (Article 186 - Article 196-2)
Chapter VIII Penal Provisions (Article 197 - Article 209)
Chapter IX Investigation into a Criminal Case, etc. (Article 210 - Article
227)
附則
Supplementary Provisions

Chapter I General Provisions

Article 1 (Purpose)
The purpose of this Act is, inter alia, by developing systems for disclosure of
corporate affairs and other related matters, providing for necessary matters
relating to persons who engage in Financial Instruments Business and securing
appropriate operation of Financial Instruments Exchanges, to ensure fairness
in, inter alia, issuance of the Securities and transactions of Financial
Instruments, etc. and to facilitate the smooth distribution of Securities, as well
as to aim at fair price formation of Financial Instruments, etc. through the full
utilization of functions of the capital market, thereby contributing to the sound
development of the national economy and protection of investors.

Article 2 (Definitions)
(1) The term "Securities" as used in this Act means the following:
(i) national government bonds;
(ii) municipal bonds;
(iii) debentures issued by a juridical person under a special act (excluding
those listed in the following item and item (xi));
(iv) specified bonds prescribed in the Act on the Securitization of Assets (Act
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No. 105 of 1998);
(v) bonds (including those issued by a mutual company; the same shall apply
hereinafter);
(vi) investment securities issued by a juridical person under a special act
(excluding those listed in the following item, item (viii) and item (xi));
(vii) preferred equity investment certificates prescribed in the Act on
Preferred Equity Investment by Cooperative Structured Financial
Institutions (Act No. 44 of 1993; (hereinafter referred to as the "Act on
Preferred Equity Investment");
(viii) preferred equity investment certificates and securities indicating
preemptive rights for new preferred equity investment prescribed in the Act
on the Securitization of Assets;
(ix) share certificates and share option certificates;
(x) beneficiary securities of investment trusts or foreign investment trusts
prescribed in the Act on Investment Trust and Investment Corporation (Act
No. 198 of 1951);
(xi) investment securities or investment corporation debentures, or foreign
investment securities prescribed in the Act on Investment Trusts and
Investment Corporations;
(xii) beneficiary securities of loan trusts;
(xiii) beneficiary securities of specific purpose trusts prescribed in the Act on
the Securitization of Assets;
(xiv) beneficiary securities of beneficiary securities issuing trusts prescribed
in the Trust Act (Act No. 108 of 2006);
(xv) promissory notes which have been issued by a juridical person in order to
raise funds necessary to operate its business and are specified by a Cabinet
Office Ordinance;
(xvi) mortgage securities prescribed in the Mortgage Securities Act (Act No.
15 of 1931);
(xvii) securities or certificates which have been issued by a foreign state or
foreign person and have the nature of securities or certificates listed in
items (i) to (ix) or item (xii) up to the preceding item (excluding those
specified in the following item);
(xviii) securities or certificates which have been issued by a foreign person,
indicate a beneficial interest of a trust in which loan claims held by persons
engaging in banking business or persons otherwise conducting money loan
in the course of trade are entrusted, or indicate any other similar rights,
and are specified by a Cabinet Office Ordinance;
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(xix) securities or certificates which indicate rights pertaining to transactions
specified in Article 2(21)(iii) conducted in a Financial Instruments Market,
in accordance with such requirements and by using such methods as
prescribed by the operator of the Financial Instruments Market, rights
pertaining to transactions which are conducted in a Foreign Financial
Instruments Market (meaning the Foreign Financial Instruments Market
defined in Article 2(8)(iii)(b); hereinafter the same shall apply in this item)
and are similar to the ones specified in Article 2(21)(iii), or rights
pertaining to transactions specified in Article 2(22)(iii) or (iv) conducted in
neither a Financial Instruments Market nor a Foreign Financial
Instruments Market (those rights are hereinafter referred to as "Options");
(xx) securities or certificates which have been issued by a person to whom
securities or certificates listed in any of the preceding items are deposited
and in a state other than the state in which the deposited securities or
certificates were issued and which indicate the rights pertaining to the
deposited securities or certificates; and
(xxi) in addition to what is listed in the preceding items, securities or
certificates specified by a Cabinet Order as those for which it is found, when
taking into consideration the liquidity thereof and other factors, necessary
to secure the public interest or protection of investors.
(2) Rights to be indicated on Securities listed in items (i) to (xv) of the preceding
paragraph, on Securities listed in item (xvii) of said paragraph (excluding
those which have the nature of Securities listed in item (xvi) of said
paragraph) and on Securities listed in item (xviii) of said paragraph, and
rights to be indicated on Securities listed in item (xvi) of said paragraph, on
Securities listed in (xvii) of said paragraph (limited to those which have the
nature of Securities listed in item (xvi) of said paragraph) and on Securities
listed in items (xix) to (xxi) of said paragraph which are specified by a Cabinet
Office Ordinance (hereinafter collectively referred to as "Rights to Be
Indicated on Securities" in this and following paragraphs) shall, even when
Securities indicating these rights have not been issued, be deemed as
Securities indicating these rights, and the rights listed in the following items
shall, even when they are not indicated on securities or certificates, be
deemed as Securities indicating these rights, and the provisions of this Act
shall apply to all these rights:
(i) beneficial interests of a trust (excluding those to be indicated on
beneficiary securities of investment trusts specified in item (x) of the
preceding paragraph and those to be indicated on Securities listed in any of
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items (xii) to (xiv) of said paragraph);
(ii) rights which are claimable against a foreign person and which have the
nature of the rights specified in the preceding item (excluding those to be
indicated on beneficiary securities of foreign investment trusts specified in
item (x) of the preceding paragraph and those to be indicated on Securities
listed in item (xvii) or (xviii) of the same paragraph);
(iii) membership rights of a general partnership company or limited
partnership company (limited to those specified by a Cabinet Order) or
membership rights of a limited liability company;
(iv) membership rights of a foreign juridical person which has the nature of
rights specified in the preceding item;
(v) among rights based on a partnership contract provided in Article 667(1) of
the Civil Code (Act No. 89 of 1896), an anonymous partnership agreement in
Article 535 of the Commercial Code (Act No. 48 of 1899), an investment
limited partnership agreement provided in Article 3(1) of the Investment
Limited Partnership Act (Act No. 90 of 1998) or a limited liability
partnership agreement provided in Article 3(1) of the Limited Liability
Partnership Act (Act No. 40 of 2005), membership rights of an incorporated
association or other rights (excluding those based on laws and regulations of
a foreign state), rights for which the holders thereof (hereinafter referred to
as an "Equity Investor" in this item) can receive dividend of profits arising
from the business conducted by using money (including those specified by a
Cabinet Order as being similar to money) invested or contributed by the
Equity Investors (such business is hereinafter referred to as the "Invested
Business" in this item) or distribution of the assets of the Invested Business
and which does not fall under any category listed in the following items
(excluding Rights to Be Indicated on Securities listed in the items of the
preceding paragraph and rights which are regarded as Securities under this
paragraph (excluding this item)):
(a) rights of an Equity Investor in cases where all of the Equity Investors
participate in the Invested Business as specified by a Cabinet Order;
(b) rights of an Equity Investor where it is provided that Equity Investors
will not receive dividend of profits or distribution of the assets of the
Invested Business in an amount exceeding the amount invested or
contributed by them (excluding rights listed in (a));
(c) rights based on an insurance contract in which a person who engages in
insurance business as defined in Article 2(1) of the Insurance Business
Act (Act No. 105 of 1995) is the insurer, a mutual aid contract concluded
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with a cooperative specified in Article 5 of the Agricultural Cooperatives
Act (Act No. 132 of 1947) which engages in the service specified in Article
10(1)(x) of said Act, a mutual aid contract concluded with a cooperative
provided in Article 3 of the Small and Medium Sized Enterprise, etc.,
Cooperatives Act (Act No. 181 of 1949) which engages in the mutual aid
service specified in Article 9-2(7) of said Act or a real estate specified joint
enterprise contract defined in Article 2(3) of the Real Estate Specified
Joint Enterprise Act (Act No. 77 of 1994) (excluding rights listed in (a)
and (b)); or
(d) in addition to what are listed in (a) to (c), rights specified by a Cabinet
Order as those for which it is found not to hinder the public interest or
protection of Equity Investors even if they are not regarded as Securities.
(vi) rights based on laws and regulations of a foreign state which are similar
to those specified in the preceding item; or
(vii) in addition to what are listed in the preceding items, rights specified by a
Cabinet Order as those for which it is found, when taking into consideration
the fact that they have an economic nature similar to Securities provided in
the preceding paragraph and rights listed in the preceding items and other
circumstances, necessary and appropriate to secure the public interest or
protection of investors by deeming them as Securities.
(3) The term "Public Offering of Securities" as used in this Act means, among
solicitations of an application to acquire newly issued Securities (including
those specified by a Cabinet Office Ordinance as being similar to such
solicitation, and hereinafter referred to as "Solicitation for Acquisition" in this
paragraph), Solicitation for Acquisition specified in item (i) or (ii) below in the
case of those conducted with regard to Securities listed in paragraph (1) or
Rights to Be Indicated on Securities which are regarded as Securities under
the preceding paragraph (such Securities or rights are referred to as
"Paragraph (1) Securities" in item (i) of the following paragraph, paragraphs
(4) and (5) of the following Article and Article 23-13(3)), and Solicitation for
Acquisition specified in item (iii) below in the case of those conducted with
regard to rights which are regarded as Securities under the items of the
preceding paragraph (such rights are referred to as "Paragraph (2) Securities"
in item (ii) of the following paragraph, paragraph(4) and (5) of the following
Article and Article 23-13(3)), and the term "Private Placement of Securities"
means a Solicitation for Acquisition which does not come within the purview
of Public Offering of Securities:
(i) Solicitation for Acquisition made to a large number of persons (other than
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Qualified Institutional Investors (meaning persons specified by a Cabinet
Office Ordinance as those having expert knowledge of and experience with
investment in Securities; the same shall apply hereinafter), if Qualified
Institutional Investors are included in the persons to which the Solicitation
for Acquisition is made and if the solicited Securities are, as specified by a
Cabinet Order, not likely to be transferred from the Qualified Institutional
Investor who acquired them to any other person other than Qualified
Institutional Investors) as specified by a Cabinet Order (excluding those
which are made only to Qualified Institutional Investors); and
(ii) in addition to the Solicitation for Acquisition specified in the preceding
item, those which do not fall under any of the following items: and
(a) Solicitation for Acquisition which is made only to Qualified Institutional
Investors, if the solicited Securities are, as specified by a Cabinet Order,
not likely to be transferred from the person who acquired them to any
other person other than Qualified Institutional Investors; and
(b) Solicitation for Acquisition which does not fall under the categories
specified in the preceding item or (a) of this item (excluding those meeting
the requirements specified by a Cabinet Order), if the offered Securities
are, as specified by a Cabinet Order, not likely to be transferred from the
person who acquired them to a large number of persons.
(iii) Solicitation for Acquisition which, as specified by a Cabinet Order, will
render the Securities pertaining thereto to be held by a considerably large
number of persons who respond to the solicitation.
(4) The term "Secondary Distribution of Securities" as used in this Act means,
among solicitations of an application to sell or purchase already-issued
Securities (referred to as "Solicitation for Selling, etc." in item (ii)), those
falling under the categories specified for each kind of Securities in the
following items (excluding those made relating to sales and purchase of
Securities in a Financial Instruments Exchange Market and a transaction
equivalent thereto and other transactions of Securities specified by a Cabinet
Order):
(i) Paragraph (1) Securities: those to be made to a large number of persons on
the same conditions specified by a Cabinet Order; and
(ii) Paragraph (2) Securities: those which, as specified by a Cabinet Order,
will render the Securities pertaining thereto to be held by a considerably
large number of persons who respond to the solicitation.
(5) The term "Issuer" as used in this Act means a person who issues, or intends
to issue, Securities (or a person specified by a Cabinet Office Ordinance for
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