These rules apply when a financial instruments business operator accepts customer orders for, or solicits customers to make, trades in the shares of listed companies or similar entities or in derivative transactions relating to them1. They also apply when the operator controls the corporate-related information of listed companies or similar entities2.

What the rules prohibit

Insider trading regulation prohibits people inside a listed company, and people who received information from them, from trading on material nonpublic information before it is made public.

Japan's Financial Instruments and Exchange Act (FIEA) prohibits trading by people who know a company's material facts, and separately trading by people who know facts about a tender offer and similar matters. The two prohibitions are referred to below as the "material fact trading ban" and the "tender offer fact trading ban". The FIEA also prohibits passing on information and recommending trades when done to enable others to profit or to avoid a loss (the "information-passing and recommendation ban")3.

Derivative transactions are included in the trading that is prohibited, so they are read within the same framework as trades in the shares themselves. Market manipulation such as spoofing is covered on the Market Manipulation and Spoofing page.

The core of Japan's insider trading rules is the FIEA provisions on the material fact trading ban, the tender offer fact trading ban, and the information-passing and recommendation ban. The FIEA also sets the criminal penalties and surcharges. The method of disclosing material facts is set by the Order for Enforcement of the Financial Instruments and Exchange Act (a Cabinet Order), and the minor-impact standards for material facts are set by the Cabinet Office Order on Regulation of Securities Transactions, etc.4. The Cabinet Office Order on Financial Instruments Business, etc. (the "Financial Instruments Business Order") defines corporate-related information. It also sets the prohibited acts and the control systems of financial instruments business operators and similar firms.

Provision What it sets
FIEA Article 166 Prohibition of trading, etc. before the disclosure of material facts. Also defines the types of material facts, the meaning of disclosure, and the exemptions
FIEA Article 167 Prohibition of purchases, etc. and sales, etc. before the disclosure of tender offer facts
FIEA Article 167-2 Prohibition of passing on information and recommending trades
FIEA Articles 197-2 and 207 Criminal penalties, and fines on legal entities
FIEA Articles 175 and 175-2 Administrative surcharge payment orders
Cabinet Order Article 30 Method of disclosure
Financial Instruments Business Order Article 1, paragraph 4, item 14, and Articles 117 and 123 Definition of corporate-related information, and the prohibited acts and control systems of financial instruments business operators and similar firms

On supervision, the Securities and Exchange Surveillance Commission (SESC) carries out investigations and makes recommendations, and the Prime Minister orders the payment of surcharges. For unfair trading in which an investigation finds a violation of law, the SESC recommends to the Prime Minister and the Commissioner of the Financial Services Agency that a surcharge payment order be issued5.

The articles were checked against the version published as of October 6, 2026 (the FIEA version in force from August 12, 2026)6.

Who and what is covered

The prohibition depends on how the person came to know the information. The material fact trading ban defines company insiders as follows7.

  • Officers, agents, employees, and similar persons of a listed company or similar entity (including its parent company and subsidiaries), who learned the fact in the course of their duties
  • Shareholders and others who can demand to inspect the accounting books, who learned the fact in exercising that right
  • Persons with legal authority over the listed company or similar entity, who learned the fact in exercising that authority
  • Persons who have a contract with, or are negotiating a contract with, the listed company or similar entity, who learned the fact in connection with concluding, negotiating, or performing the contract
  • Officers and similar persons of a corporation that is a shareholder or a contracting party, who learned the fact in the course of their duties when other officers or similar persons of the same corporation learned it

The same prohibition continues for one year after a person stops being a company insider7. A person who received a material fact from a company insider is subject to the same prohibition. This includes other officers and similar persons of a corporation to which a person who received the information in the course of duties belongs. The SESC calls such a person a "primary information recipient"8.

The tender offer fact trading ban is built the same way. It covers the officers, shareholders, and contracting parties of a tender offeror and similar persons. It also covers the target company of the tender offer and its officers and similar persons when they learn of the offer from the offeror. The period after a person stops being such a party is six months9.

Provision Persons prohibited Prohibited conduct
Article 166, paragraph 1 Company insiders Trading, etc. in specified securities, etc. of the listed company or similar entity before the disclosure of material facts
Article 166, paragraph 3 Persons who received information from a company insider Same as above
Article 167, paragraph 1 Persons connected with a tender offeror and similar persons Purchases, etc. before the disclosure of the fact of the offer, and sales, etc. before the disclosure of the fact of its cancellation
Article 167, paragraph 3 Persons who received information from a person connected with a tender offeror and similar persons Same as above
Article 167-2 Persons connected as under Articles 166 and 167 Passing on information or recommending trades, in order to enable others to profit or to avoid a loss

"Trading, etc." in the material fact trading ban means sales and purchases and other transfers for value, succession through a merger or a company split, and derivative transactions. The specified securities, etc. covered are specified securities, such as the shares of a listed company or similar entity, and related securities, such as securities that represent an option on those shares10. Whether the trading produced a profit is not an element of the material fact trading ban. The information-passing and recommendation ban, by contrast, requires a purpose of enabling others to profit or to avoid a loss11.

The material fact trading ban has exemptions12. The main cases are as follows.

  • Acquiring shares and similar securities by exercising a subscription right or an option
  • Trading, etc. required by law
  • Trading, etc. carried out as performance of a contract concluded, or execution of a plan decided, before the person knew the material fact, in cases specified by a Cabinet Office Order

Treatment of derivative transactions

The material fact trading ban names "derivative transactions" among the types of transactions it prohibits. The FIEA defines derivative transactions as market derivatives transactions, OTC derivative transactions, and foreign market derivatives transactions13. The wording of the statute does not limit the type of transaction to exchange-traded transactions.

The instruments covered, however, are limited. What is prohibited is trading, etc. in the specified securities, etc. of the listed company or similar entity to which the undisclosed material fact relates. Specified securities, etc. include shares and similar securities and, as related securities set by Cabinet Order, securities that represent an option on those shares14.

The following table shows where the statute touches on derivative transactions.

Issue Treatment in the statute
Trading, etc. under Article 166 Includes derivative transactions10
Exercise of options Where a person who holds an option on specified securities, etc. trades by exercising it, the exemption in Article 166, paragraph 6 applies12
Purchases, etc. and sales, etc. under Article 167 The Cabinet Order lists purchases and sales of specified share certificates and related share certificates, among others. It does not use the term "derivative transactions"15
Purchases, etc. and sales, etc. in the surcharge formula Besides sales and purchases of securities, includes market derivatives transactions that provide for the payment and receipt of differences, and transactions in which a person grants or acquires an option16
Criminal penalties Violations of Article 166, paragraphs 1 and 3 are not distinguished by type of transaction17

Figure: whether the Article 166 prohibition reaches a trade

YesNoIs the person an insider,or told by one?Not a personthe ban coversYesNoIs it a material factunder paragraph 2?Not a materialfactYesNoIs it before thedisclosure measures?Afterdisclosure;ban does notapplyYesNoIs it trading in theissuer's specifiedsecurities?Not a tradethe ban coversNoYesIs it a trade exemptedunder paragraph 6?An exemptionappliesIn principle, theArticle 166 ban may apply
Figure 1Deciding whether the prohibition in Article 166, paragraphs 1 and 3 reaches a trade
Figure description

The figure checks, through five questions in order, whether the prohibition on trading on material facts applies. A no to any of the first four questions takes the case outside the prohibition at that point. The last question runs the other way: a yes (a transaction under an exemption) takes the case outside it. If all are passed, the prohibition may in principle apply. The prohibition on trading on tender offer facts and the prohibition on tipping and recommending trades are not included in the figure.

Consider a hypothetical example in which the board of directors of Company C, a listed company, decides to acquire treasury shares. This fact is a decision-type material fact and does not meet the minor-impact standard. Only purchases of Company C's shares are considered, and other conditions of the exemptions are not set.

Example Conditions Applying the conditions
1 An employee of Company C learns of the decision in the course of duties and buys Company C shares before the disclosure measures have been taken Questions 1 to 4 are answered yes and question 5 no, so the ban may apply in principle
2 Company C makes the decision public to at least two news organizations designated by the Cabinet Order, and the employee from Example 1 buys shares after 12 hours have passed since the release The third question is answered no (the disclosure measures have been taken), so the ban does not apply
3 Securities Firm D (a corporation) learns of the decision in contract negotiations with Company C and, before disclosure, acquires Company C shares by exercising an option it holds Questions 1 to 4 are answered yes. The fifth is answered yes (exercising an option is exempt), so the trade falls outside the ban

Figure: from learning a material fact to disclosure

BeforedisclosureAn insider learns the materialfact. Trading now is in principlecovered by the banDisclosuremeasureRelease to two or more designatednews organizations, or notice to anexchange12 h afterreleaseAfter a release to the media,disclosure counts as made once 12hours have passedAfterdisclosureThe Article 166 prohibition doesnot apply
Figure 2From learning a material fact until disclosure counts as made
Figure description

The figure shows, in time order, the flow from learning a material fact to the point at which it is treated as made public. Trading before publication is in principle prohibited (apart from exemptions and the like), and the prohibition does not apply after publication. The milestone is the point at which, after the publication measures, the period needed for dissemination following disclosure to the media has passed and the fact is treated as public. The spacing is not proportional to the length of time.

Example: Company E's public offering and Securities Firm F

Consider a hypothetical example in which Company E, a listed company, prepares to issue shares by public offering, and Securities Firm F is negotiating an underwriting contract. A trader in Securities Firm F's derivatives department learns of the decision to issue in connection with this negotiation and, before the announcement, buys a call option on Company E's shares. As an officer or similar person of a party negotiating a contract with Company E, the trader may fall within the company insiders.

If Company E's share price rises after the announcement, the purchased call option produces a profit, and if it falls, a loss. Because the ban does not depend on the profit or loss of the trade, the trade may be a violation in either case. If the trader committed the violation in connection with Securities Firm F's business, a fine is also provided for Securities Firm F as a legal entity18.

Material facts and disclosure

The FIEA defines material facts in four types. Facts of the same types are also defined for subsidiaries19.

Type Examples Provision
Decisions A decision by the body that decides business execution to carry out an issue of shares for subscription, an acquisition of treasury shares, a merger, a company split, or similar Item 1
Occurrences A disaster or a loss arising in the course of business, a change in a major shareholder, or a fact that is a cause for delisting Item 2
Financial results Forecast or actual sales, ordinary profit, net profit, or dividends that differ from the most recently disclosed forecast (or, if none, the prior fiscal year's actual figures) by more than a standard Item 3
Catch-all clause A fact about operations, business, or property that does not fall under the types above and that has a significant effect on investors' investment decisions Item 4

Decisions also include a decision not to carry out a decision that was made public. The Cabinet Office Order sets the standard for financial results.

Facts that fall under the standards set by the Cabinet Office Order as having only a minor effect on investors' investment decisions are excluded from some of the decisions and occurrences. A tender offer fact is a decision by the body that decides the business execution of a tender offeror or similar person to carry out a tender offer or similar action, or not to carry out a tender offer that was the subject of a decision made public. Minor cases are likewise excluded20.

Disclosure means that a measure set by Cabinet Order has been taken, or that a document such as a securities report stating the material fact has been made available for public inspection. The measures under the Cabinet Order include the listed company or similar entity making the material fact public to at least two news organizations and the period needed for it to become widely known elapsing. They also include notifying an exchange so that the fact is made available for public inspection. The Cabinet Order sets the period needed for the fact to become widely known as 12 hours from the time it was made public to at least two news organizations21.

Criminal penalties and surcharges

A violation of the material fact trading ban or the tender offer fact trading ban is punishable by imprisonment of up to 5 years or a fine of up to 5 million yen, or both. A violation of the information-passing and recommendation ban carries the same penalty, but only where a person who received the information or the recommendation actually trades, etc. before disclosure17. When an employee or similar person of a legal entity commits a violation in connection with its business, a fine of up to 500 million yen is provided for the legal entity18.

Property obtained through the criminal act of violating the material fact trading ban or the tender offer fact trading ban is forfeited, and if it cannot be forfeited, its value is collected. Forfeiture may be omitted when it is not appropriate in the circumstances. These forfeiture and collection provisions do not extend to violations of the information-passing and recommendation ban22.

A surcharge is an administrative measure imposed by a payment order of the Prime Minister, separate from criminal penalties. Violations of the material fact trading ban and the tender offer fact trading ban are subject to payment orders23. The following table shows the amounts for violations of the material fact trading ban.

Case Surcharge amount
Sales, etc. for the person's own account The sale price multiplied by the quantity, minus the lowest price in the two weeks after disclosure multiplied by the quantity
Purchases, etc. for the person's own account The highest price in the two weeks after disclosure multiplied by the quantity, minus the purchase price multiplied by the quantity
Trading, etc. for another person's account (as management of managed assets) Three times the amount equivalent to the consideration for the management (set by the Cabinet Office Order)
Trading, etc. for another person's account (other cases) The amount of the consideration, such as commissions or fees (set by the Cabinet Office Order)

Among sales, etc. and purchases, etc., those made within the six months up to and including the day of disclosure are subject to surcharges23. For violations of the information-passing and recommendation ban, a surcharge is ordered only where the recipient of the information actually trades, etc. before disclosure. The amount is either an amount based on the consideration for the intermediary or similar service, or one half of an amount equivalent to the gain from the recipient's trading24.

The SESC casebook lists the following as features of the recommendations in fiscal 202325.

  • Trading by persons who received information from a company's officers or employees
  • A case in which an employee traded in a nominee account on information learned in the course of duties
  • A case in which an officer or employee of a subsidiary living overseas traded in an acquaintance's account
  • A case in which an officer of a tender offer target company passed information to many acquaintances and recommended trades

The casebook says that cases involving tender offer facts have been the most numerous among recommendations so far25.

Differences from the US, the EU, and the UK

The US, the EU, and the UK also prohibit trading on undisclosed material information, but the structure of the provisions differs.

Issue Japan US EU and UK
Basis FIEA Articles 166, 167, and 167-2 For securities, the Securities Exchange Act, Rule 10b-5, and Rule 10b5-1. For commodities and swaps, the Commodity Exchange Act and 17 CFR 180.126 Market Abuse Regulation (MAR) Articles 8, 10, and 1427
Structure of the prohibition Trading, etc. before disclosure by the persons the statute lists (company insiders and others) Trading in securities on the basis of material nonpublic information in breach of a duty of trust or confidence counts as a deceptive device28 A person who possesses inside information using that information to acquire or dispose of financial instruments. The statute also defines the range of persons who possess the information
Definition of information Four types of material facts (the statutory list and the catch-all clause) Rule 10b5-1 uses the terms "material" and "nonpublic" information, provides no definition or list, and states that insider trading law is defined by judicial opinions28 Information of a precise nature that has not been made public and that, if made public, would be likely to have a significant effect on prices29
Derivatives Trading, etc. includes derivative transactions The Securities Exchange Act covers securities-based swap agreements. The Commodity Exchange Act prohibits deceptive devices in swaps and in futures and similar transactions26 Also covers instruments whose price or value depends on the price or value of a financial instrument traded on a regulated market or trading facility, with a credit default swap and a contract for difference given as examples30
Liability of legal entities A fine on the legal entity for violations by its personnel18 The violator's civil penalty is up to three times the profit gained or loss avoided. A person who controls the violator may also be penalized31 For a legal person, the prohibition also applies to the natural persons who took part in the decision to carry out the transaction for the legal person's account32
Defenses for legal entities This is not covered on this page. A legal entity has a defense if the decision-maker was unaware of the information and the entity had reasonable policies and procedures28 A legal person with internal arrangements that effectively ensure the decision-maker did not possess the information, and that did not influence the decision-maker, is not deemed to have used the information merely by possessing it32

The US Securities and Exchange Commission (SEC) treats, under Rule 10b5-1, a trade made while aware of material nonpublic information as a trade "on the basis of" that information. The rule, however, provides affirmative defenses, such as entering into a contract, instruction, or written plan before becoming aware of the information28.

The Commodity Exchange Act states that the Commodity Futures Trading Commission (CFTC) shall not adopt a rule requiring a person to disclose nonpublic information that may be material to the price, rate, or level of the transaction. The exception is a disclosure necessary to keep a statement made to the other person in or in connection with the transaction from being misleading in a material respect33.

In its 2011 final rule, the CFTC stated that the derivatives markets had long operated in a way that permits trading on material nonpublic information obtained lawfully. The same rule also states that trading in breach of a pre-existing duty, or on information obtained through fraud or deception, may violate Rule 180.134.

The EU MAR also prohibits passing on information separately. Disclosure by a person who possesses inside information to another person outside the normal exercise of the person's employment is unlawful disclosure. An issuer must inform the public as soon as possible of inside information that directly concerns it35.

The UK MAR replaces the places of trading with the UK, Gibraltar, EU markets, and the like, but the wording of the main prohibitions on insider dealing and unlawful disclosure cited here is the same. There are differences in the details. For example, the words "in accordance with national law" in the provision on legal persons do not appear in the UK version36.

Implications for practice

The Financial Instruments Business Order defines corporate-related information as undisclosed material information about the operations, business, or property of a listed company or similar entity that is recognized as affecting customers' investment decisions, among other things37. Unlike material facts, this definition is written by the nature of the information and does not list types.

Besides control, the Financial Instruments Business Order prohibits financial instruments business operators and similar firms from the following acts1.

  • Accepting a customer's order while knowing that the customer's trade violates, or is likely to violate, the material fact trading ban or the tender offer fact trading ban
  • Providing a customer with an issuer's corporate-related information when soliciting the customer to trade securities or to enter into derivative transactions relating to securities
  • Recommending trades in order to enable a customer to profit or to avoid a loss by having the customer trade before disclosure

What this page does not cover

The following are not covered on this page.

  • The numerical minor-impact standards for material facts, and the content of the exemptions that the Cabinet Office Order sets
  • The content of the similar transactions that the Cabinet Office Order specifies under the tender offer fact trading ban
  • The formula for surcharges on violations of the tender offer fact trading ban
  • Whether an individual transaction, such as an over-the-counter equity swap, falls within the rules
  • Whether the FIEA has a provision corresponding to a defense for legal entities
  • The content of the FIEA versions that take effect on and after November 30, 2026
  • Penalties in the EU and the UK

Notes

  1. "金融商品取引業等に関する内閣府令" (Cabinet Office Order on Financial Instruments Business, etc.; provisional translation, in Japanese), Article 117, paragraph 1, items 13, 14, and 14-2. This page lists the acts specified by Cabinet Office Order under Article 38, item 9 of the FIEA. ↩ ↩2

  2. "金融商品取引法" (in Japanese), Article 40, item 2, and Financial Instruments Business Order, Article 123, paragraph 1, item 5. ↩ ↩2

  3. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese), Article 166 (prohibited acts of company insiders), Article 167 (prohibited acts of persons connected with a tender offeror and similar persons), and Article 167-2 (prohibition on passing on undisclosed material facts and similar acts). ↩

  4. Articles 49 to 53 of the "有価証券の取引等の規制に関する内閣府令" (Cabinet Office Order on Regulation of Securities Transactions, etc., Cabinet Office Order No. 59 of 2007; provisional translation, in Japanese) set the minor-impact standards. Article 51 sets the materiality standard for forecast sales and similar figures. ↩

  5. Securities and Exchange Surveillance Commission Secretariat, "令和５年度 金融商品取引法における課徴金事例集～不公正取引編～" (Fiscal 2023 casebook on administrative surcharges under the Financial Instruments and Exchange Act: unfair trading; June 2024, in Japanese; the "casebook"), "Ⅰ 課徴金勧告の件数及び課徴金額" (page 1 of the document). That the Prime Minister orders the payment of surcharges is in Article 175 of the "金融商品取引法". ↩

  6. The "金融商品取引法" was obtained through the e-Gov Law Search API in the version in force from August 12, 2026 (reflecting the amendment by Act No. 64 of 2026). The law history from the same API (checked on October 6, 2026) lists versions not yet in force, with effective dates from November 30, 2026. ↩

  7. "金融商品取引法" (in Japanese), Article 166, paragraph 1, items 1 to 5, and the latter part of the same paragraph (within one year after ceasing to be a company insider). "Listed company or similar entity" is defined in Article 163, paragraph 1. ↩ ↩2

  8. "金融商品取引法" (in Japanese), Article 166, paragraph 3. The term "primary information recipient" (第一次情報受領者) comes from the casebook's explanatory notes ("用語の説明", Explanation of terms). ↩

  9. "金融商品取引法" (in Japanese), Article 167, paragraph 1, items 1 to 6 (item 5 covers the target company of the tender offer and its officers and similar persons), the latter part of the same paragraph (within six months), and paragraph 3. ↩

  10. "金融商品取引法" (in Japanese), Article 166, paragraph 1 (definition of "trading, etc."), and Article 163, paragraph 1 (definitions of "specified securities", "related securities", and "specified securities, etc."). ↩ ↩2

  11. "金融商品取引法" (in Japanese), Article 167-2, paragraphs 1 and 2 (purpose of enabling others to profit or to avoid a loss). Article 166, paragraph 1 contains no wording that makes profit an element. ↩

  12. "金融商品取引法" (in Japanese), Article 166, paragraph 6, items 2, 2-2, 3, and 12. Item 12 provides "limited to cases specified by Cabinet Office Order". ↩ ↩2

  13. "金融商品取引法" (in Japanese), Article 2, paragraph 20 (derivative transactions), paragraph 21 (market derivatives transactions), and paragraph 22 (over-the-counter derivatives transactions). ↩

  14. "金融商品取引法施行令" (in Japanese), Article 27-3 (scope of specified securities) and Article 27-4 (scope of related securities; item 3 covers securities that represent an option on specified securities). ↩

  15. "金融商品取引法施行令" (in Japanese), Article 33-3 (scope of purchases, etc. of share certificates and similar securities) and Article 33-4 (scope of sales, etc.). Item 7 of each lists similar transactions specified by Cabinet Office Order. ↩

  16. "金融商品取引法" (in Japanese), Article 175, paragraphs 3 and 4 ("sales, etc. of securities" and "purchases, etc. of securities", which include the transactions in Article 2, paragraph 21, items 2 and 3). ↩

  17. "金融商品取引法" (in Japanese), Article 197-2, paragraph 1, item 13 (violations of Article 166, paragraphs 1 and 3, and Article 167, paragraphs 1 and 3), item 14 (violations of Article 167-2, paragraph 1, limited to cases where the recipient engages in trading, etc. that is not exempt), and item 15 (paragraph 2 of the same article). The penalty is in the opening part of paragraph 1. ↩ ↩2

  18. "金融商品取引法" (in Japanese), Article 207, paragraph 1, item 2 (a fine of up to 500 million yen for violations of Article 197-2, paragraph 1). ↩ ↩2 ↩3

  19. "金融商品取引法" (in Japanese), Article 166, paragraph 2, item 1 (decisions), item 2 (occurrences), item 3 (financial results), item 4 (catch-all clause), and items 5 to 8 (subsidiaries). For listed investment corporations and similar entities, items 9 to 14 of the same paragraph. ↩

  20. "金融商品取引法" (in Japanese), Article 166, paragraph 2, opening part (minor-impact standards), and Article 167, paragraph 2 (tender offer facts and their minor-impact standards). The numerical standards are left to the Cabinet Office Order. ↩

  21. "金融商品取引法" (in Japanese), Article 166, paragraph 4, and "金融商品取引法施行令" (Order for Enforcement of the Financial Instruments and Exchange Act; in Japanese), Article 30, paragraph 1, items 1 and 2. Paragraph 2 of the same article sets the period needed for the fact to become widely known as 12 hours from the time of disclosure to at least two of the news organizations (paragraph 2, item 1 (a), (b), and (c)). ↩

  22. "金融商品取引法" (in Japanese), Article 198-2, paragraph 1, item 1 (property obtained through the offense in Article 197-2, paragraph 1, item 13, that is, the criminal act of violating Articles 166 and 167), and paragraph 2 (collection of value). Items 14 and 15 (violations of Article 167-2) are not listed in that item. ↩

  23. "金融商品取引法" (in Japanese), Article 175, paragraph 1, items 1 to 3 (Article 166), paragraph 2 (Article 167), and paragraphs 3 and 4 ("sales, etc." and "purchases, etc."). The formulas paraphrase the wording of the article, and items 1 and 2 provide "within six months before the day of disclosure". ↩ ↩2

  24. "金融商品取引法" (in Japanese), Article 175-2, paragraph 1, items 1 to 3 (item 3 is the amount equivalent to the gain from the recipient's trading, multiplied by one half). Paragraph 2 concerns violations of Article 167-2, paragraph 2. ↩

  25. The casebook, "Ⅰ 課徴金勧告の件数及び課徴金額", "（インサイダー取引）" (Insider trading) (page 1 of the document), and Column 6, "勧告件数が最も多いのは、公開買付け事案" (Tender offer cases are the most numerous among recommendations) (page 8 of the document). ↩ ↩2

  26. 15 USC § 78j(b) (includes "any securities-based swap agreement"), 17 CFR 240.10b-5, 7 USC § 9(1), and 17 CFR 180.1(a). The Securities Exchange Act provision is Section 10(b), and the Commodity Exchange Act provision is Section 6(c)(1). ↩ ↩2

  27. Regulation (EU) No 596/2014 of the European Parliament and of the Council, Article 8 (Insider dealing), Article 10 (Unlawful disclosure of inside information), and Article 14 (the prohibition of both). ↩

  28. 17 CFR 240.10b5-1(a) (trading on the basis of material nonpublic information in breach of a duty of trust or confidence), (b) (a trade made while aware of the information is a trade "on the basis of" it), (c)(1) (affirmative defenses of a contract, instruction, or written plan), and (c)(2) (defense for persons other than natural persons). ↩ ↩2 ↩3 ↩4

  29. MAR Article 7, paragraph 1(a) (precise nature, not made public, significant effect on prices), paragraph 2 (meaning of precise nature), and paragraph 4 (information a reasonable investor would use as part of the basis of investment decisions). ↩

  30. MAR Article 2, paragraph 1(a) to (d). Point (d) covers financial instruments not covered by points (a) to (c) whose price or value depends on, or has an effect on, the price or value of the financial instruments in points (a) to (c) (including credit default swaps and contracts for difference). ↩

  31. 15 USC § 78u-1(a)(1) (the SEC seeks civil penalties in court), (a)(2) (up to three times the profit gained or loss avoided), (a)(3), and (b)(1) (the penalty on a controlling person and the conditions for that liability). ↩

  32. MAR Article 9, paragraph 1(a) and (b) (appropriate and effective internal arrangements of a legal person), and paragraph 2(a) (trading within the normal exercise of functions, such as by a market maker). The words "in accordance with national law" in Article 8, paragraph 5 (the prohibition also applies to natural persons who took part in the decision) are omitted in the UK revised version. ↩ ↩2

  33. The proviso in the text of 7 USC § 9(1) (the Commission may not require disclosure of nonpublic information that may be material, except as necessary to keep a statement made in the transaction from being misleading in a material respect). 17 CFR 180.1(b) has the same effect. ↩

  34. CFTC final rule of 2011 (76 Fed. Reg. 41398, July 14, 2011), page 41403, "2. Commission Determination". ↩

  35. MAR Article 10, paragraph 1, and Article 17, paragraph 1. ↩

  36. The UK revised version of MAR on legislation.gov.uk, Article 2, paragraph 1, and Articles 8 to 10. Compared with the text as adopted, there are differences in the details, such as Article 8, paragraph 5 and Article 9, paragraph 6. ↩

  37. Financial Instruments Business Order, Article 1, paragraph 4, item 14 (corporate-related information). ↩

  38. The casebook, Column 6 (page 8 of the document; preventive measures) and Column 8, "情報管理の重要性② ～職場編～" (Importance of information control (2): the workplace) (page 10 of the document). The reports on the circumstances of the trading are "経緯報告書". ↩