For financial instruments business operators and registered financial institutions that conduct derivatives transactions as a business, work such as registration, advertising and pre-contract document delivery, and the differences in rules by client classification rests on the provisions of the Financial Instruments and Exchange Act.

The Financial Instruments and Exchange Act (FIEA) covers the disclosure of corporate information, persons that conduct financial instruments business, and the operation of financial instruments exchanges. Its purpose is to make the issuance of securities and transactions in financial instruments fair and to contribute to investor protection1. The provisions that concern derivatives transactions fall into five groups: the definition of transactions, registration for business, conduct rules that protect clients, the classification of professional investors, and the regulation of OTC derivatives transactions. The Prime Minister delegates the powers under the Act, except for some, to the Commissioner of the Financial Services Agency (FSA), and the Commissioner delegates some of those powers to the Securities and Exchange Surveillance Commission2. Japan's Derivatives Regulation at a Glance gives the map of Japan's regulation as a whole.

The text of the Act sets the framework, and the details are left to Cabinet Orders and Cabinet Office Orders. The provisions this article cites are as follows.

Law Provisions cited here Article
Financial Instruments and Exchange Act Definition of derivatives transactions Article 2
Financial Instruments and Exchange Act Registration Articles 28 to 33-2
Financial Instruments and Exchange Act Conduct rules and professional investors Articles 34 to 45
Financial Instruments and Exchange Act Exchanges Articles 80 and 84
Financial Instruments and Exchange Act Mandatory clearing and reporting of trade information Articles 156-62 to 156-64
Order for Enforcement of the Financial Instruments and Exchange Act Matters that the Act leaves to a Cabinet Order. For example, part of the scope of Article 38 Article 16-43
Cabinet Office Order on Financial Instruments Business, etc. (the Business Order) Types of contracts Article 53
Business Order Expiry dates and requirements for professional investors Articles 58 to 62
Business Order Exceptions to the application of provisions to professional investors Article 156
Business Order Margin Article 123
Business Order Books and documents Article 157
Cabinet Office Order on Definitions under Article 2 of the Financial Instruments and Exchange Act (the Definitions Order) Qualified institutional investors Article 10
Definitions Order Corporations that are professional investors Article 23
Cabinet Office Order on the Regulation of Over-the-Counter Derivatives Transactions (the OTC Derivatives Order) Scope of mandatory clearing Article 2
OTC Derivatives Order Retention and reporting of trade information Articles 3 to 11-2

The following table lists only the versions checked for whether the definitions of derivatives transactions and of professional investors change4.

Date Type What happens
July 23, 2026 Promulgation Act Partially Amending the Financial Instruments and Exchange Act and the Payment Services Act (Act No. 64 of 2026)
August 12, 2026 In force The version of the articles this article uses
April 1, 2027 In force Provisions on the solicitation of offerings and private placements of securities change. The definitions of derivatives transactions and of professional investors do not change
The version of July 22, 2027 (the date e-Gov lists as the day to be set by Cabinet Order within one year of promulgation) Scheduled to take effect Crypto-asset business is added, and Article 28, paragraph 8 becomes paragraph 10

The articles were checked against the version published as of October 3, 2026 (the FIEA version in force from August 12, 2026, and the text of the Cabinet Office Orders of the same day).

The definition of derivatives transactions and the three categories

The FIEA divides derivatives transactions by where they are conducted into market derivatives transactions, OTC derivatives transactions, and foreign market derivatives transactions5.

Category Where conducted Conditions in the definition
Market derivatives transactions A financial instruments market (a market for the sale and purchase of securities or for market derivatives transactions) Transactions that the Act lists by item, made on a financial instruments market under the standards and methods set by the person that opens the market
OTC derivatives transactions Outside both a financial instruments market and a foreign financial instruments market Transactions that the Act lists by item, excluding those specified by Cabinet Order as posing no obstacle to the public interest or investor protection
Foreign market derivatives transactions A foreign financial instruments market Transactions made on a foreign financial instruments market that are similar to market derivatives transactions

Market derivatives transactions and OTC derivatives transactions list the items in the same order for each type of transaction6.

Type of transaction Market derivatives transactions OTC derivatives transactions
The futures and forward type7 Item 1, Item 2 Item 1, Item 2
The option type. A transaction in which one party grants a right to establish a transaction by a declaration of intent, and the other party pays a price Item 3 Item 3, Item 4
The swap type. A transaction in which the parties pay each other amounts based on an interest rate or similar rate of a financial instrument, or on the change in a financial indicator over an agreed period, for an amount set as the principal Item 4 (Item 4-2 for those on commodities) Item 5
A transaction in which the other party pays money when a predetermined event occurs (such as an event concerning the credit status of a corporation) Item 5 Item 6
Transactions similar to the above that a Cabinet Order specifies Item 6 Item 7

The futures and forward type has two kinds of transactions. One is a sale and purchase in which a financial instrument and its price are exchanged at a set future time (which can be settled by paying a difference, for example through an offsetting transaction). The other provides for a payment based on the difference between an agreed figure and the actual figure.

The range of underlying assets is set by financial instruments and financial indicators8. Financial instruments are securities, deposit claims and similar claims specified by Cabinet Order, currencies, crypto-assets and similar assets, assets specified by Cabinet Order, standardized products whose terms a financial instruments exchange has standardized, and commodities. Commodities are those under the Commodity Derivatives Transaction Act that a Cabinet Order specifies. Financial indicators are the prices, interest rates, and similar figures of financial instruments, figures from meteorological observations announced by the Japan Meteorological Agency and similar bodies, figures of indicators and statistics specified by Cabinet Order, and figures calculated from these.

The definition of OTC derivatives transactions has items that exclude transactions relating to commodities9.

Only a person holding a license from the Prime Minister can open a financial instruments market on which market derivatives transactions are made. Authorized financial instruments firms associations are excluded from the license requirement. A membership corporation or a stock company that holds the license and opens a financial instruments market is a financial instruments exchange10. An exchange must properly carry out self-regulatory business, such as the business of listing and delisting and the investigation of members' and others' compliance with laws and regulations, and it can entrust that business to a self-regulatory corporation with the Prime Minister's approval11.

Registration for conducting business

Financial instruments business means conducting any of the acts listed in the Act as a business. The acts that concern derivatives transactions are as follows12.

  • Conducting market derivatives transactions and foreign market derivatives transactions (excluding commodity-related market derivatives transactions)
  • Intermediation, brokerage, and agency for those transactions
  • Intermediation, brokerage, and agency for entrusting transactions on an exchange financial instruments market or a foreign financial instruments market
  • OTC derivatives transactions, and intermediation, brokerage, and agency for them
  • Brokerage for clearing of securities, etc., in which a firm carries out a transaction on a client's entrustment on the condition that a financial instruments clearing organization assumes the obligations

Conducting financial instruments business requires registration with the Prime Minister. A person that has received the registration is a financial instruments business operator. OTC derivatives transactions and their intermediation and similar acts are Type I financial instruments business13. The Prime Minister must refuse registration when, for example, the applicant is not recognized as having the arrangements to conduct business properly14. A person conducting Type I financial instruments business must also notify the Prime Minister of its capital adequacy ratio at the end of each month and at other times, and must keep it from falling below 120%15.

Banks and other financial institutions are regulated under a separate framework. Securities-related business means conducting as a business the sale and purchase of securities and its intermediation and similar acts, and securities-related derivatives transactions, etc. Securities-related derivatives transactions, etc. are derivatives transactions on securities or securities indicators, and similar transactions16.

Banks, cooperative financial institutions, and other financial institutions specified by Cabinet Order cannot conduct securities-related business. The Act, however, lists exceptions. For OTC derivatives transactions, the listed exceptions are transactions on government bonds and similar securities, and transactions on securities that are settled only by paying a difference. For the latter, the exception excludes cases that a Cabinet Order specifies as having many counterparties17. A firm that conducts an excepted transaction also registers as a registered financial institution.

A firm that conducts derivatives transactions not related to securities (such as those on interest rates or currencies) as a business does not need registration as a financial instruments business operator either, and registers as a registered financial institution18. A person that has received this registration is a registered financial institution.

Item Financial instruments business operator Registered financial institution
Basis for registration Article 29 Article 33-2
Who is registered A person registered under Article 29 A bank, cooperative financial institution, or other financial institution specified by Cabinet Order that is registered under Article 33-219
Scope for derivatives transactions OTC derivatives transactions, etc. are Type I financial instruments business Registers to conduct the excepted transactions in Article 33, paragraph 2 and derivatives transactions, etc. not related to securities as a business. Cannot conduct securities-related business except under the exceptions

Checking the basis for registration with two questions in turn gives Figure 1.

YesNoDoes it conduct Article2(8) derivatives acts asa business?Not financialinstrumentsbusinessYesNoIs it other than a bank orother financialinstitution?Art. 33-2(registeredfinancialinstitution)Art. 29 (financialinstruments businessoperator)
Figure 1Basis for registration when conducting derivatives transactions as a business
Figure description

The figure checks the basis for registration when conducting derivatives transactions as a business, through two questions in order. A no to the first means the activity is not financial instruments business. At the second, a financial institution specified by Cabinet Order, such as a bank, registers as a registered financial institution, and any other person registers as a financial instruments business operator. Securities-related business conducted by a financial institution is prohibited except for the exceptions.

Consider a hypothetical example in which a firm conducts an OTC interest rate swap as a business.

In the first case, Bank I conducts the business. Bank I is a bank, and an interest rate is not related to securities, so in Figure 1 the first answer is yes and the second is no. Bank I conducts the business as a registered financial institution.

In the second case, a company that is not a bank or other financial institution conducts the same transaction as a business. The company is not a financial institution, so both answers in Figure 1 are yes. The company conducts the business as a financial instruments business operator, and an OTC derivatives transaction is Type I financial instruments business.

Financial instruments business operators and registered financial institutions are together called financial instruments business operators, etc., and the conduct rules below apply to them20.

The structure of the conduct rules that protect clients

The conduct rules on a financial instruments business operator, etc. follow the flow of a transaction, from advertising through information before and after a contract to prohibited solicitation and the ban on loss compensation. The last column of the table shows how each rule applies when the client is a professional investor, and the Act lists the provisions that do not apply. "The person being solicited" means the person whom a firm solicits to enter a contract, and "the counterparty" means the person from whom a firm receives an application or with whom it enters a contract21.

Rule Article What it provides When the client is a professional investor
Display in advertising, etc. Article 3722 State the trade name, registration number, and similar items. Do not make a display that is markedly contrary to fact or markedly misleading about expected profit or similar matters Does not apply (when the person being solicited is a professional investor)
Prior disclosure of the capacity in which the firm acts Article 37-223 When it receives an order for an OTC derivatives transaction, state in advance whether it is the counterparty or is acting as intermediary, broker, or agent Does not apply (when the counterparty is a professional investor)
Provision of information before a contract, etc. Article 37-324 Provide the client, before the contract, with information such as an outline of the contract, fees, and the risk of loss. In practice this is done by delivering a pre-contract document Does not apply (when the counterparty is a professional investor)
Provision of information when a contract is concluded, etc. Article 37-425 Provide information on the contract without delay, for example when the contract is concluded Does not apply (when the counterparty is a professional investor), except in cases specified by Cabinet Office Order
Delivery of a document on receipt of a deposit Article 37-526 Deliver a document immediately when it receives a deposit that the client makes Does not apply (when the counterparty is a professional investor), except in cases specified by Cabinet Office Order
Cancellation by document, etc. Article 37-627 For contracts specified by Cabinet Order, the client can cancel the contract by a document or electronic record within a set number of days Does not apply (when the counterparty is a professional investor)
Prohibited acts Article 3828 False statements, giving a conclusive judgment, unsolicited solicitation, solicitation without first confirming wishes, continued solicitation of a client that has shown it does not wish to contract, providing groundless information used in calculation, and others Unsolicited solicitation, solicitation without confirming wishes, and continued solicitation do not apply (when the person being solicited is a professional investor). The others are not on the list of exempted provisions
Prohibition of loss compensation, etc. Article 3929 Prohibits both promising and providing compensation for a loss or an additional profit Not on the list of exempted provisions
Suitability principle Article 40, item 130 A firm must not solicit in a way that is unsuitable in light of the client's knowledge, experience, financial position, and purpose of contracting, and so leave investor protection lacking Does not apply (when the person being solicited is a professional investor)

A financial instruments business operator, etc. must, in principle, explain the matters in the information provided before a contract, other than some such as the risk of loss, by the method and to the extent necessary for the client to understand. This does not apply where, for example, the operator has confirmed by an appropriate method that the client understood24. Unsolicited solicitation is solicitation by visit or telephone of a client that has not requested it, for contracts that a Cabinet Order specifies. The prohibited acts also include solicitation without first confirming the client's wishes, continuing to solicit a client that has shown it does not wish to contract, and providing groundless information to the calculator of a specified financial indicator28.

The prohibition of loss compensation also applies to the client side. The client is prohibited from making a promise at its own request and from receiving a provision, at its own request, under that promise. There is a conditional exception for compensating a loss caused by an accident29.

Suitability and the Duty to Explain covers the suitability principle and the content of the explanation.

Professional investors and how the rules differ

The FSA's explanation distinguishes professional investors, which it calls "pros," from general investors, which it calls "amateurs"31. To follow the terms of the Act, this article calls the amateur side clients other than professional investors. Professional investors are qualified institutional investors, the State, the Bank of Japan, the Investor Protection Fund, and other corporations specified by Cabinet Office Order32. The Definitions Order sets the scope of qualified institutional investors and lists banks, insurance companies, and some financial instruments business operators, among others. It also sets the corporations specified by Cabinet Office Order and lists listed companies, stock companies expected to have capital of 500 million yen or more, financial instruments business operators, and foreign corporations, among others33.

The classification does not depend on the client's attributes alone. It can be changed on request for each type of contract. There are four types of contract: transactions in securities, derivatives transactions, investment advisory contracts, and discretionary investment contracts34. Derivatives transactions are a type of contract separate from transactions in securities.

Client Classification What it can request Article
Qualified institutional investors, the State, the Bank of Japan Professional investor Cannot request to be treated as a client other than a professional investor Article 34-235
The Investor Protection Fund and other corporations specified by Cabinet Office Order (hereafter, professional investors that are corporations specified by Cabinet Office Order) Professional investor Can request, for each type of contract, to be treated as a client other than a professional investor Article 34-235
Corporations other than the above Client other than a professional investor Is deemed a professional investor on a request, consent, and written agreement Article 34-336
Individuals (excluding qualified institutional investors) Client other than a professional investor Individuals such as an operator of an anonymous association, or an individual who meets the requirements that a Cabinet Office Order sets, can make a request Article 34-437

A financial instruments business operator, etc. must consent to a request from a professional investor that is a corporation specified by Cabinet Office Order by the time of the first solicitation or the conclusion of the contract. After consent, the client can request at any time to return to professional investor status35.

The effect of a request is as follows. Suppose a professional investor that is a corporation specified by Cabinet Office Order makes a request, the financial instruments business operator, etc. consents, and it delivers a document. The requester is then deemed a client other than a professional investor, as a person being solicited on or after the date of consent and as a counterparty to a contract concluded on or after that date. This applies to the type of contract that the request specifies35.

Suppose a corporation makes a request, the financial instruments business operator, etc. consents, and it receives written agreement. The requester is then deemed a professional investor, as a person being solicited from the date of consent to the expiry date and as a counterparty to a contract concluded during that period. This applies to the type of contract that the request specifies36. The expiry date is at most the day one year after the date of consent, and a renewal request can be made. After the expiry date the client goes back to being a client other than a professional investor.

For an individual, the requirements that a Cabinet Office Order sets concern knowledge, experience, and financial position, and require that the individual be recognized as equivalent to a professional investor. The procedure for consent applies the provisions for corporations mutatis mutandis, but for an individual the firm must also deliver a document and confirm that the applicant meets the requirements37.

Suppose a financial instruments business operator, etc. receives an application from a professional investor that is a corporation specified by Cabinet Office Order, and has never concluded a contract of the same type with it. The firm must then notify it, by the time of the contract, that it can request to be treated as a client other than a professional investor20.

The Act lists the provisions that do not apply when the client is a professional investor. As the last column of the table on conduct rules shows, when the person being solicited is a professional investor, it makes the display in advertising, some of the prohibited acts such as unsolicited solicitation, and the suitability principle inapplicable. When the counterparty is a professional investor, the Act makes the provisions in the table from the prior disclosure of the capacity in which the firm acts to cancellation by document inapplicable. It also makes the provisions of two other articles inapplicable. The provisions on investment advisory contracts and discretionary investment contracts are listed in the same form21. Provisions that this list does not include, such as the prohibition of loss compensation and false statements among the prohibited acts, are not exempted.

However, in cases that a Cabinet Office Order specifies as likely to impede the securing of the public interest or the protection of professional investors, the provisions apply even when the client is a professional investor. The Business Order specifies the following cases. The provision of information at the conclusion of a contract and the delivery of a document on receipt of a deposit apply, respectively, when a client inquires about an individual transaction or the receipt of an individual deposit and the firm has no arrangements to answer at once. The same Order also provides for the provisions on investment advisory contracts and discretionary investment contracts38.

Consider a hypothetical example in which Bank I, a financial instruments business operator, etc., concludes an OTC derivatives transaction contract with Company J, a listed company. In both examples, the question is whether the provision of information before a contract applies. A listed company is a professional investor under the Definitions Order.

In the first case, Company J has not requested to be treated as a client other than a professional investor for derivatives transactions. The counterparty to the contract is a professional investor, so the provision of information before a contract does not apply21. The prohibition of loss compensation applies in the same situation, because it is not exempted2129.

In the second case, suppose Company J requests to be treated as a client other than a professional investor for derivatives transactions, Bank I consents, and it delivers a document. For the type of contract the request specifies (derivatives transactions), the counterparty to a contract concluded on or after the date of consent is deemed a client other than a professional investor35. The provision of information before a contract applies to contracts concluded on or after the date of consent.

Where the OTC derivatives regulation is located

Mandatory clearing, margin, and the reporting of trade information sit in other articles of the FIEA and in the Cabinet Office Orders under it.

Regime Article of the FIEA Cabinet Office Order Page that covers the content
Mandatory clearing Article 156-6239. A financial instruments business operator, etc. must have a financial instruments clearing organization or similar body assume the obligations arising from transactions that a Cabinet Office Order specifies Article 2 of the OTC Derivatives Order (the transactions covered)40 Mandatory Clearing
Margin requirements Article 40, item 241 Article 123 of the Business Order (the state of measures for variation margin and initial margin) Margin Requirements for Uncleared Derivatives
Reporting of trade information Article 156-63 (financial instruments clearing organizations and similar bodies), Article 156-64 (financial instruments business operators, etc.)42 Articles 3 to 11-2 of the OTC Derivatives Order43 Trade Reporting

In addition, when a financial instruments business operator, etc. that conducts OTC derivatives transactions as a business conducts specified OTC derivatives transactions, it must use an electronic data processing system. Specified OTC derivatives transactions are OTC derivatives transactions that a Cabinet Office Order specifies as needing prompt disclosure of outline information in light of trading volume and similar factors. A person that has made the electronic data processing system available for use must publish an outline, such as the price and quantity, of the specified OTC derivatives transactions conducted on it44.

Practical implications

A change of classification on request is determined for each type of contract3536. When the client is a professional investor, provisions such as the display in advertising and the provision of information before a contract do not apply, but the prohibition of loss compensation and similar provisions are not exempted21. The effect of a request on the classification is determined by the date of consent, the delivery of a document, and the expiry date up to which a client is deemed a professional investor3536.

What this article does not cover

The content of versions that have not yet taken effect, and the articles that the 2027 versions change, is not covered on this page. The details of the documents before and after a contract and of the suitability principle and the explanation are not covered on this page. Provisions that set how rules apply to professional investors, other than those listed in the text, and the content of mandatory clearing, margin, and the reporting of trade information, are not covered on this page.

Notes

  1. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 1. ↩

  2. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 194-7, paragraphs 1 and 2. ↩

  3. "金融商品取引法施行令" (Order for Enforcement of the Financial Instruments and Exchange Act, in Japanese), Article 16-4, paragraph 1 (matters specified by Cabinet Order in Article 38, item 4 of the Act). ↩

  4. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), the amendment history on e-Gov Laws and Regulations Search, and Supplementary Provisions, Articles 1 (date of effect) and 2, of Act No. 64 of 2026. The version of April 1, 2027 changes Article 2, paragraphs 3 and 4, Article 33, and others, and leaves Article 2, paragraphs 20 to 23 and paragraph 31 unchanged. The version of July 22, 2027 also changes Articles 33, 34-2, and 37-5 and others. ↩

  5. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 2, paragraph 20 (the three categories of derivatives transactions), paragraph 21 (market derivatives transactions), paragraph 22 (OTC derivatives transactions), paragraph 23 (foreign market derivatives transactions), and paragraph 14 (financial instruments market). ↩

  6. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 2, paragraph 21, items 1 to 6, and paragraph 22, items 1 to 7. ↩

  7. "金融商品取引業等に関する内閣府令" (Cabinet Office Order on Financial Instruments Business, etc., in Japanese), Article 167 calls items 1 and 2 of market derivatives transactions futures transactions and items 1 and 2 of OTC derivatives transactions forward transactions, as categories for entries in books. ↩

  8. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 2, paragraph 24, items 1 to 5 (financial instruments), and paragraph 25, items 1 to 4 (financial indicators). ↩

  9. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 2, paragraph 22, items 1, 2, 4, and 5 exclude the financial instruments and financial indicators relating to commodities in paragraph 24, item 3-3. ↩

  10. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 80, paragraph 1, and Article 2, paragraph 16. ↩

  11. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 84, paragraph 1, paragraph 2, items 1 to 3, and Article 85, paragraph 1. ↩

  12. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 2, paragraph 8, item 1 (market derivatives transactions and foreign market derivatives transactions), item 2 (their intermediation, brokerage, and agency), item 3 (intermediation, brokerage, and agency for entrusting transactions), item 4 (OTC derivatives transactions and their intermediation, brokerage, and agency), item 5 (brokerage for clearing of securities, etc.), and paragraph 27 (brokerage for clearing of securities, etc.). ↩

  13. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 29 and Article 28, paragraph 1, item 2. ↩

  14. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 29-4, paragraph 1, item 1 (f). ↩

  15. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 46-6, paragraphs 1 and 2. The Article is in Chapter III, Section 1, "Financial Instruments Business Operators Conducting Type I Financial Instruments Business". ↩

  16. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 28, paragraph 8, items 1, 2, and 3 to 6 (Article 33, paragraph 3 provides that securities-related derivatives transactions, etc. are those listed in Article 28, paragraph 8, items 3 to 6). ↩

  17. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 33, paragraph 1 and paragraph 2, item 5 ((a): OTC derivatives transactions on the securities in item 1; (b): among OTC derivatives transactions on the securities in items 2 to 4, those settled only by paying a difference. For (b), cases that a Cabinet Order specifies as having many counterparties are excluded). ↩

  18. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 33, paragraph 3, and Article 33-2, item 2 (the transactions in each item of Article 33, paragraph 2, excluding those that fall under the proviso to paragraph 1 of that Article) and item 3. ↩

  19. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 2, paragraph 9 (financial instruments business operator) and paragraph 11 (registered financial institution). ↩

  20. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 34 (financial instruments business operators, etc. means financial instruments business operators and registered financial institutions). The notification under Article 34 is given by the time of the contract, when the firm has received an application from a professional investor and has never concluded a contract of the same type with it. ↩ ↩2

  21. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 45, item 1 (Article 37, Article 38, items 4 to 6, and Article 40, item 1) and item 2 (Articles 37-2 to 37-6, Article 40-2, paragraph 4, and Article 43-4). Items 3 and 4 concern investment advisory contracts and discretionary investment contracts, and the proviso concerns cases specified by Cabinet Office Order. ↩ ↩2 ↩3 ↩4 ↩5

  22. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 37, paragraphs 1 and 2. ↩

  23. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 37-2. ↩

  24. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 37-3, paragraphs 1 and 2, and "金融商品取引業等に関する内閣府令" (Cabinet Office Order on Financial Instruments Business, etc., in Japanese), Article 79, paragraph 1, item 1 (a) (pre-contract document), Articles 93 and 94 (matters to be stated for derivatives transactions, etc. and for OTC derivatives transaction contracts). ↩ ↩2

  25. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 37-4, paragraph 1. ↩

  26. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 37-5, paragraph 1. ↩

  27. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 37-6, paragraph 1. ↩

  28. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 38, item 1 (false statements), item 2 (giving a conclusive judgment), item 4 (unsolicited solicitation), item 5 (confirming wishes before solicitation), item 6 (continued solicitation), item 7 (providing information used in calculation), and item 9, and "金融商品取引業等に関する内閣府令" (Cabinet Office Order on Financial Instruments Business, etc., in Japanese), Article 117 (acts that item 9 leaves to the Order). What Article 45, item 1 makes inapplicable is Article 38, items 4 to 6. ↩ ↩2

  29. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 39, paragraph 1 (prohibition on the firm's promise and provision), paragraph 2 (prohibition on the client side. For the client side, the prohibitions cover a promise made at its own request and the receipt of a provision, at its own request, under that promise (item 3 is limited to cases under the promise in the preceding two items)), paragraph 3, and paragraph 5 (exceptions for compensating a loss caused by an accident. The proviso to paragraph 3 is conditional on confirmation by the Prime Minister and similar steps). ↩ ↩2 ↩3

  30. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 40, item 1. ↩

  31. Financial Services Agency, "アクセスＦＳＡ 第83号" (Access FSA No. 83) (March 2010), "４．特定投資家(プロ)と一般投資家(アマ)の移行手続きの見直し" (4. Review of the procedures for moving between professional investors (pros) and general investors (amateurs)) (in Japanese). ↩

  32. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 2, paragraph 31, items 1 to 4. Qualified institutional investors are in Article 2, paragraph 3, item 1. ↩

  33. "金融商品取引法第二条に規定する定義に関する内閣府令" (Cabinet Office Order on Definitions under Article 2 of the Financial Instruments and Exchange Act, in Japanese), Article 10 (scope of qualified institutional investors) and Article 23 (scope of professional investors. Item 7 is a company that issues shares listed on a financial instruments exchange, item 8 a stock company expected to have capital of 500 million yen or more, item 9 financial instruments business operators and similar persons, and item 10 foreign corporations). ↩

  34. "金融商品取引業等に関する内閣府令" (Cabinet Office Order on Financial Instruments Business, etc., in Japanese), Article 53, items 1 to 4. ↩

  35. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 34-2, paragraph 1 (a request can be made only by a person in Article 2, paragraph 31, item 4), paragraphs 2 and 3 (delivery of a document), and paragraphs 5, 10, and 11. ↩ ↩2 ↩3 ↩4 ↩5 ↩6 ↩7

  36. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 34-3, paragraphs 1, 2, 4, 7, and 9. ↩ ↩2 ↩3 ↩4

  37. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 34-4, paragraph 1, paragraph 2 (delivery of a document and confirmation that the applicant falls under each item of paragraph 1), and paragraph 6 (applies Article 34-3, paragraphs 2 to 8, and others, mutatis mutandis). The requirements for individuals are in "金融商品取引業等に関する内閣府令" (Cabinet Office Order on Financial Instruments Business, etc., in Japanese), Articles 61 and 62. ↩ ↩2

  38. "金融商品取引業等に関する内閣府令" (Cabinet Office Order on Financial Instruments Business, etc., in Japanese), Article 156, item 1 (Article 37-4), item 2 (Article 37-5), and items 3 and 4 (provisions on investment advisory contracts and discretionary investment contracts). ↩

  39. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 156-62. ↩

  40. "店頭デリバティブ取引等の規制に関する内閣府令" (Cabinet Office Order on the Regulation of Over-the-Counter Derivatives Transactions, in Japanese; English translation: Japanese Law Translation), Article 2, paragraphs 1 and 2. ↩

  41. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 40, item 2, and "金融商品取引業等に関する内閣府令" (Cabinet Office Order on Financial Instruments Business, etc., in Japanese), Article 123, paragraph 1, item 21-10 (variation margin) and item 21-11 (initial margin) (situations in which measures are not recognized as taken for variation margin and initial margin on uncleared OTC derivatives transactions). ↩

  42. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 156-63, paragraph 1, and Article 156-64, paragraph 1. ↩

  43. "店頭デリバティブ取引等の規制に関する内閣府令" (Cabinet Office Order on the Regulation of Over-the-Counter Derivatives Transactions, in Japanese; English translation: Japanese Law Translation), table of contents. Chapter 2 (Articles 2 and 2-2) and Chapter 3 "Retention and Reporting of Trade Information" (Articles 3 to 11-2). ↩

  44. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 40-7, paragraph 1 (the business covered is OTC derivatives transactions. The electronic data processing system is one that the firm itself, or another financial instruments business operator, etc. or similar person, uses for business) and paragraph 2 (duty of a person that has made the electronic data processing system available for use to publish). ↩

  45. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 34-3, paragraph 2, items 2, 5, and 6, and paragraph 7, and "金融商品取引業等に関する内閣府令" (Cabinet Office Order on Financial Instruments Business, etc., in Japanese), Article 60, paragraph 1. ↩

  46. Financial Services Agency, "金融商品取引業者等向けの総合的な監督指針" (Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.) (October 2026), III-2-3-2-1 (1)⑥ (PDF page 64; printed page 53) and I-2-1 (PDF page 15; printed page 4) (in Japanese). ↩

  47. "金融商品取引業等に関する内閣府令" (Cabinet Office Order on Financial Instruments Business, etc., in Japanese), Article 157, paragraph 1, item 1 (a) (1) and (2), and item 2 (a). ↩