The Securities and Exchanges Law (Law No.25 of 1948) shall be partially amended as follows:
In Article 2, the proviso to paragraph 10 shall be deleted.
In the proviso to Article 4 paragraph 2, "five million yen (\5,000,000)" shall be amended as "ten million yen (\10,000,000)."
Article 5 paragraph 1 item (3) shall be amended as follows:
3. Brief history of company concerned and its business, conditions of production, sales or other business, conditions of assets and liabilities, conditions of income and loss, and any other important matters concerning the contents of the business.
In item (9) of the same paragraph, "issuance by public offering of securities concerned or entrustment thereof" shall be amended as "issuance or sale by public offering of securities concerned or entrustment of such issuance or sale" ;and item (19) of the same paragraph shall be made item (20) and the following one item shall be added next to item (18):
19. Other matters such as the Securities and Exchanges Commission may designate by a Securities and Exchanges Commission Regulation, recognizing as necessary and appropriate for the public interest or the protection of investors.
The following one item shall be added to paragraph 3 of the same Article:
7. Other documents such as the Securities and Exchanges Commission may designate by a Securities and Exchanges Commission Regulation, recognizing as necessary and appropriate for the public interest or the protection of investors.
Article 13 paragraph 6 shall be amended as follows:
The provision of the preceding paragraph. shall not disturb representations made only with respect to description of security concerned, price or quantity of security concerned to be issued or sold by public offering, title of underwriters or of persons who handle the issuance or sale thereof by public offering, places where the prospectus may be obtained or objective of the company as shown in its Articles of Corporation.
In Article 15 paragraph 3, "any of the following cases" shall be amended as "such case as coming under any of the following items" ;and item (3) of the same paragraph shall be amended as follows:
3. Transactions by a securities dealer or a person who was an underwriter after the elapse of one year from the effective date of the filing in accordance with the provision of Article 4 paragraph 1 (excluding the computation of any period of time during which a stop order issued under the provision of Article 10 paragraph 1 is in effect);provided that transactions as to securities constituting the whole or a part of an unsold allotment to or subscription by such dealer as a participant in the issuance or sale of such securities by public offering shall be excluded.
In Article 25 paragraph 3, "an Ordinance" shall be amended as "the Ministry of Finance Ordinance."
In Article 28 paragraph 3 item (1), "copies of their census registry" shall be amended as "extracts of their census registry or certificates as prescribed in the provision of Article 10 paragraph 1 of the Census Registration Law (Law No.224 of 1941)(hereinafter referred to as" a certificate of census registry ")" and "items (1), (2) and (4)" shall be amended as items (1), (2) and (3)-ii to (4) inclusive ";and in item (2) of the same paragraph," copy of his census registry "shall be amended as" an extract or certificate of his census, registry "and" items (1), (2), (4) and (5) "as" items (1), (2) and (3)-ii to (5) inclusive."
In Article 30 paragraph 2, "an Ordinance" shall be amended as "a Cabinet Order."
The following two items shall be added next to Article 31 item (3):
3-ii. In cases where the company is a securities dealer whose registration was cancelled in accordance with the provisions of this Law, any person who had been a director or an executive partner of the company concerned for a period within thirty (30) days prior to the date when the registration of the company concerned was cancelled and with respect to him five (5) years have not elapsed thereafter.
3-iii. Any officer who was ordered to be removed from his post in accordance, with the provisions of Article 59 and with respect to him five (5) years have not elapsed after the date of such removal.
In item (7) of the sane Article, "or a trade name which is liable to be misunderstood as the business of other securities dealer" shall be added next to "a trade name same as the one which is being used by any other securities dealer," and "without obtaining permission of such securities dealer." shall be deleted;and the following one item shall be added next to the same item:
8. Any person who does not use the term "securities" in his trade name.
In Article 32 paragraph 3, "copy of his census registry" shall be amended as "extract or certificate of his census registry," "Article 31" shall be amended as "the preceding Article" and "items (1), (2) and (4)" shall be amended as "items (1), (2) and (3)-ii to (4) inclusive."
In Article 33 paragraph 1, "as may be provided for by a Cabinet Order, pay the registration fee, and" shall be added next to "he shall."
Article 34 shall be amended as follows:
Article 34. The amount of net capital employed in the business of any securities dealer shall not be less than five hundred thousand yen (\500,000);(as regards the securities dealer who trades with no person other than securities dealers, the amount of his net capital employed in the business shall not be less than two hundred thousand yen (\200,000)).
The ratio of the amount of aggregate indebtedness of any securities dealer to the amount of his net capital employed in the business shall not exceed such percentage as the Securities and Exchanges Commission may designate by a Securities and Exchanges Commission Regulation recognizing as necessary and appropriate for the public interest or the protection of investors, but in no case it shall exceed two thousand (2,000) per centum.
The amount of net capital employed in the business as referred to in the preceding two paragraphs shall be the total amount of assets from which the total amount of liabilities is deducted and the amount of aggregate indebtedness as referred to in the preceding paragraph shall be the total amount of liabilities.
The total amount of assets and that of liabilities as referred to in the preceding paragraph shall be computed as may be provided for by a Securities and Exchanges Commission Regulation.
In Article 35, "If the amount of net capital employed in the business of the applicant for registration fails to reach such amount as may be prescribed in paragraph 1 of the preceding Article or" shall be added before "If the ratio of the amount" and "paragraph 1 of the foregoing Article" shall be amended as "paragraph 2 of the same Article."
In Article 39 paragraph 1, "items (4) to (7) inclusive" shall be amended as "items (3)-ii to (8) inclusive."
In Article 40 paragraph 1, "If the amount of net capital employed in the business of a securities dealer happens to be less than such amount as may be prescribed in Article 34 paragraph 1 or" shall be added before "If the ratio of the aggregate indebtedness," and "paragraph 1 of Article 34" shall be amended as "paragraph 2 of the same Article."
The following one Article shall be added next to Article 41:
Article 41-(2). Securities dealers shall use the letter "securities" in his trade name.
No person other than securities dealers shall use in his trade name any letters which are liable to be mistaken for that of a securities dealer.
In Article 52, "from April to September and from October to March of the following year" shall be amended as "from, October to September of the following year."
In Article 54 paragraph 1 item (5), "items (4)) to (6) inclusive" shall be amended as "items (3)-ii to (6) inclusive" ;in item (6) of the same paragraph, "paragraph 1 of Article 34" shall be amended as "Article 34 paragraph 2" ;and the following one item shall be added next to item (5) of the same paragraph:
5-ii. When the amount of net capital employed in the business of a securities dealer happens to be less than such amount as may be provided for by the provision of Article 34 paragraph 1.
Article 55 shall be amended as follows: Article 55. The Securities and Exchanges Commission may, if it deems it necessary and appropriate for, the public interest or for the protection of investors, order securities dealers or persons trading therewith to submit reports or data which serve as reference with respect to the business of securities dealers concerned or as to their property or have the conditions of business or property or books, documents or other articles audited by the competent officials.
The following one Article shall be added next to the same Article:
Article 55-(2). In cases where a securities dealer is found to be effecting an excessive amount of trading or making transactions or borrowing in an unwholesome way as compared with the scope of their business and their financial conditions or to be in possession of assets deemed bad, the Securities and Exchanges Commission may, if it deems it necessary and appropriate for the public interest or the protection of investors, order such securities dealer not to engage in any action similar to such practice in the future or to devalue the whole or a part of the assets concerned in its financial statements in accordance with what may be determined by a Securities and Exchanges Commission Regulation, by showing the reason, after giving notice to him and opportunity for hearing.
The following two paragraphs shall be added to Article 57:
The Securities and Exchanges Commission after ordering suspension of business in accordance with the provision of the preceding paragraph, if it deems that the causes for such suspension are no longer in existence, may shorten the period of suspension.
In case the Securities and Exchanges Commission makes the disposal as referred to in the preceding paragraph, it shall promptly notify the securities dealer concerned of that effect, by showing the reason.
In Article 60, "Article 57" shall be amended as "Article 57 paragraph 1."
In Article 63 paragraph 1 item (1), "Article 57" shall be amended as "Article 57 paragraph 1" ;in paragraph 2 of the same Article, "item (3) of the foregoing paragraph" shall be amended as "paragraph 1 item (3)" ;and the following one paragraph shall be added next to paragraph 1:
Regardless of the provision of the preceding paragraph, the cancellation of registration under the provision of the preceding paragraph, in case it comes under any of the following items and the Securities and Exchanges Commission specifies a period within thirty (30) days from the date as provided for by the provision of each item concerned and notifies it to the securities dealer concerned, may be postponed pending the lapse of such period:
1. In such case as mentioned in item (2) of the preceding paragraph, the date when such filing has been received;
2. In such case as mentioned in item (3) of the preceding paragraph, the date when the Securities and Exchanges Commission has confirmed such fact.
In Article 64 paragraphs 1 and 2, "Article 57" shall be amended as "Article 57 paragraph 1."
In Article 69 paragraph 1, "or its attached documents" shall be added next to "the application statement for registration."
In Article 82 paragraph 2 item (2), "copies of their census registry" shall be amended as "extracts or certificates of their census registry," and "items (2), (4) and (5)" shall be amended as "items (2) and (3)-ii to (5) inclusive."
In Article 84 paragraph 2, "copy of census registry" shall be amended as "extract or certificate of census registry" and "items (1), (2), (4) and (5)" shall be amended as "items (1), (2) and (3)-ii to (5) inclusive."
In Article 85 paragraph 1, "or its attached documents" shall be added next to "the application statement for registration" ;and the following one item shall be added in the same paragraph of the same Article:
4. If the establishment of such securities exchange is not necessary in view of the limited number of securities dealers and conditions of transaction of securities in the district where the securities exchange concerned is to be established, or of the limited number of corporations whose head, branch offices or any other offices, or establishments of business are located in such district and whose securities are to be listed on such securities exchange and/or of any other economic conditions in such district.
In Article 91 paragraph 5, "paragraphs 2 and 3 of Article 34" shall be amended as "Article 34 paragraphs 3 and 4."
In Article 112 paragraph 2, "except those which come under the provision of paragraph 4" shall be added next to "the securities with respect of which the securities exchanges filed with the Securities and Exchanges Commission in accordance with the provisions of the foregoing Article," and the following one paragraph shall be added in the same Article:
In case the Securities and Exchanges Commission receives a registration statements of securities as provided for by paragraph 1, if it deems the listing of such securities on the securities exchange unnecessary and inappropriate for the public interest or the protection of investors, it may, by showing the reason, order the securities exchange concerned to refuse the registration after giving notice and opportunity for hearing.
In Article 165 paragraph 1, "as external organ of the Ministry of Finance" shall be added next to "a Securities and Exchanges Commission" ;and paragraph 2 of the same Article shall be deleted.
Article 166 shall be amended as follows:
Article 166. The Securities and Exchanges Commission shall be composed of a Chairman and two (2) Commissioners.
The Chairman and Commissioners shall be selected from among persons of learning and experience and shall be appointed by the Prime Minister with the consent of both Houses.
In cases where the consent of both Houses cannot be obtained on account of the recess of the National Diet or the dissolution of the House of Representatives at the time when the term of office of Chairman or a Commissioner has expired or there takes place any vacancy in such offices, the Prime Minister may, notwithstanding the provision of the preceding paragraph, appoint Chairman or a Commissioner from among persons of learning and experience.
In the case of the preceding paragraph, the ex-post-facto approval of both Houses shall be obtained at the first National Diet after such appointment. When such ex-post-facto approval of both Houses has not been obtained in such cases, the Prime Minister shall remove the Chairman or Commissioner concerned from his office.
In the main clause of Article 167 paragraph 1, "Commissioners" shall be amended as "Chairman and Commissioners" ;in the proviso to the same paragraph, "Commissioners" shall be amended as "Chairman or Commissioners" ;in paragraph 2 of the same Article, "Commissioners" shall be amended as "Chairman and Commissioners."
In Article 168 and Article 169, "Commissioners" shall be amended as "Chairman and Commissioners."
Article 170 paragraph 1 shall be deleted.
In Article 172, "Commissioners" shall be amended as "Chairman and Commissioners."
In Articles 175,176 and Article 182 paragraph 4, "Commissioners" shall be amended as "Chairman, Commissioners."
In Article 185 paragraph 1, "(including the case wherein this provision is applied mutatis mutandis in Article 27)" shall be added next to "Article 26."
In Article 186, "Order" shall be amended as "Ministry of Finance Ordinance."
In Article 188 paragraph 2, "stocks" shall be amended as "stocks of such company," and in paragraph 3 of the same Article, "(including cases of any acquisition or disposition of other stocks of such company)" shall be added next to "Should there be any change in the quantity."
The following one Article shall be added next to Article 191:
Article 191-(2). It shall be unlawful for any person, by the use of newspapers, magazines, documents, broadcastings, moving pictures or any other means of publication, to describe his opinion to offer investors the ground of their judgment concerning any security or the issuer thereof for a consideration received or to be received, from an issuer, underwriter or dealer, without fully disclosing the fact that he describes these for a consideration received or to be received;provided that this shall not apply in case the person who gives publicity as advertisements for a consideration received or to be received.
Article 193 shall be amended as follows:
Article 193. The balance sheets, profit and loss statements or other financial statements to be filed with the Securities and Exchanges Commission in accordance with the provisions of this Law shall be made in such terms, forms and method of preparation as may be prescribed by the Securities and Exchanges Commission in a Securities and Exchanges Commission Regulation in accordance with such standards as generally deemed fair and acceptable.
The following one Article shall be added next to Article 193:
Article 193-(2). The balance sheets, profit and loss statements or other financial statements to be filed with the Securities and Exchanges Commission by issuing companies of stocks listed on securities exchanges or other persons as may be designated by a Securities and Exchanges Commission Regulation shall be certified by a certified public accountant who has no special interest or connection therewith.
The special interest or connection referred to in the preceding paragraph shall mean such relationships between certified public account ants and those who file the balance sheets, profit and loss statements or other financial statements as provided for in Article 24 of the Certified Public Accountant Law (Law No.103 of 1948), or such relationships of the certified public accountant as a stockholder of or as an investor in the registrant or such relationships of the certified public accountant with respect to the registrant's business or property management as the Securites and Exchanges Commission may prescribe as necessary and appropriate in the public interest or for the protection of investors by a Securities and Exchanges Commission Regulation.
The auditing certificate by a certified public accountant as prescribed in paragraph 1 shall be prepared in conformity with such standards and procedures as may be prescribed in a Securities and Exchanges Commission Regulation.
In cases where a certified public accountant issued an auditing certificate with respect to balance sheets, profit and loss statements or other financial statements to be submitted under the provisions of this Law, if such certificate comes under the provisions as provided for in Article 30 of the Certified Public Accountant Law or is otherwise dishonest, the Securities and Exchanges Commission may decide to receive for a specified period within one (1) year no balance sheets, profit and loss statements or other financial statements certified by such certified public accountant to be filed with the Securities and Exchanges Commission, by showing the cause thereof, after giving notice to such accountant and opportunity for hearing. In such cases the Securities and Exchanges Commission shall notify such fact to the certified public accountant concerned and make it public.
In Article 194, "stocks which are being listed on a securities exchange" shall be amended as "any stock issued by a company whose stocks are listed on a securities exchange."
The following one Article shall be added next to Article 195:
Article 195-(2). The provisions of this Law shall not be construed into preventing the application of the Law relating to Prohibition of Private Monopoly and Methods of Preserving Fair Trade (Law No.54 of 1947) or into restricting the power of the Fair Trade Commission under the same Law.
In Article 205 item (1), "Article 41-(2) paragraph 2" shall be added next to "Article 30 paragraph 4 (including the case where this provision is applied mutatis mutandis in Article 33 paragraph 2)" , and "Article 61, Article 129 paragraph 1, Article 133" shall be deleted;and item (10) of the same Article shall be amended as follows:
10. Any person who has made a false filing with respect to the filing in accordance with the provision of Article 56 paragraph 2 or 3.
Item (11) of the same Article shall be amended as follows:
11. One who has failed to submit any copy of the application or of documents attached thereto as prescribed in Article 111, or has submitted an application or its copy, or documents attached or its copy thereto containing false statements.
The following one item shall be added next to item (14) of the same Article:
14-ii. One who has violated the provisions of Article 191-(2).
In Article 208 item (1), "Article 49 paragraph 1, Article 61, Article 129 paragraph 1 or Article 133" shall be added next to"Article 4 paragraph 3;and item (8) of the same Article shall be amended as follows: