RULES CONCERNING EMPLOYEES OF
ASSOCIATION MEMBERS(November 14, 1974)

CHAPTER I. GENERAL PROVISIONS(Purpose)
Article 1 The purpose of the Rules Concerning Employees of the Association Members (hereinafter referred
to as “Rules”) is, in view of the public nature and importance of the social mission of the Financial
Instruments Business, to contribute to the investor protection by prescribing the service standards, etc.,
for the Employees of the Association Members as well as defining the responsibilities of the Association
Members to supervise their employees.
(Definitions)
Article 2 In these Rules, the definition of the terms set forth in each of the following Items shall beprescribed therein:(1) Securities:(2)

Securities prescribed in the provision of Article 3, Item 1 of the Articles of Association;

Sale and Purchase or Other Transactions of Securities, etc.: Sale and Purchase or Other
Transactions of Securities, etc. prescribed in the provision of Article 3, Item 8 of the Articles of
Association;(3) OTC Derivative Transactions, etc.: Over-The-Counter Derivative Transactions, etc. prescribed in
the provision of Article 3, Item 5 of the Articles of Association;(4) Specified OTC Derivative Transactions, etc.: Specified Over-The-Counter Derivative Transactionsprescribed in the provision of Article 3, Item 7 of the Articles of Association;(5) Securities-Related Derivative Transactions, etc.: Securities-Related Derivative Transactions, etc.
prescribed in the provision of Article 3, Item 4 of the Articles of Association;(5)-2 Commodity-Related Market Transactions of Derivatives:
Commodity-Related Market Transactions of Derivatives prescribed in the provision of Article 2,
Paragraph 8, Item 1 of the Financial Instruments and Exchange Act (hereinafter referred to as“FIEA”);(6) Employee: any person set forth as follows:(a) Any person employed by a Regular Member (including those who are accepted as a seconded
worker; the same shall apply in this Item) and assigned to its head office, other business officeor office located in Japan (head office, other business offices or offices prescribed in theprovision of Article 29-2, Paragraph 1, Item 10 of the FIEA; the same shall apply in (b) below);(b) Any person employed by a Specified Business Member and engaged in the Specified Business(which means the business set forth in Article 5, Item 2 (a), (b), or (c) of the Articles of
Association; the same shall apply hereinafter) or a business accompanying the Specified
Business (limited to business listed in Article 5, Item 2 (c) of the Articles of Association) in its

1

head office, other business office or office located in Japan;(c) Any person employed by a Special Member and engaged in the registered financial institution
business prescribed in the provision of Article 5, Item 3 of the Articles of Association(hereinafter referred to as “Registered Financial Institution Business”) in its head office, otherbusiness office or office located in Japan (head office, other business offices or offices asprescribed in Article 33-3, Paragraph 1, Item 7 of the FIEA) (including those who are engaged
in the specified financial instruments transaction business prescribed in the provision of Article
33-8, Paragraph 2 (hereinafter referred to as “Specified Financial Instruments Transaction
Business”)); and(d) For dispatched workers under the Law for Securing the Proper Operation of Worker Dispatching
Undertakings and Protection of Dispatched Workers, any person who is registered as the Sales
Representative prescribed in the provision of Article 64, Paragraph 1 of the FIEA;(7)

Financial Instruments Intermediary Service Provider: Financial instruments intermediary service
provider prescribed in Article 3, Item 9 of the Articles of Association; and(8)

Individual Financial Instruments Intermediary Service Provider: Individual financial instrumentsintermediary service provider prescribed in Article 3-2 of the Rules Concerning Financial Instruments
Intermediary Service Providers (hereinafter referred to as the Financial Instruments Intermediary
Service Provider Rules”).

CHAPTER II. HIRING(Hiring of Employees)
Article 3 An Association Member must, in hiring a person as an Employee (hereinafter referred to as“Hiring”), examine the career, etc. of the applicant to ensure his/her integrity and competence in light ofthe purpose of Article 1.
(Handling Etc. of Employees Breaching Laws and Regulations)
Article 3-2 When an Association Member finds in the examination prescribed in the preceding Article thata person to be hired is subject to Article 13 of the “Rules Concerning Qualification and Registration, Etc.
of Sales Representatives of Association Members” (hereinafter referred to as the “Sales Representative
Rules”), Article 23 of the Financial Instruments Intermediary Service Provider Rules, or Article 8,
Paragraph 4 of the “Rules Concerning Internal Administrators, Etc. of Association Members” (hereinafterreferred to as the “Internal Administrator Rules”), or a person was regarded as Class-2 Perpetrator of an
Inappropriate Act by the Association pursuant to Article 12, Paragraph 1 of the Rules, it shall conduct a
training course, etc. regarding the prevention of breaches of laws and regulations, and the protection of
investors.
(Prohibition of Hiring)
Article 4 An Association Member must not hire any person employed by other Association Member as
an employee of its own; provided, however, that this provision shall not apply to the case where an
Association Member hires a person employed by another Association Member in the form of seconded
worker or the case where an Association Member is a parent financial institution etc. of the other
Association Member that is prescribed in Article 36, Paragraph 4 of the FIEA or a subsidiary financial
institution, etc. of other Association Member that is prescribed in Paragraph 5 of the same Article2

(hereinafter referred to as the “Parent/Subsidiary Financial Institution, etc.”), or if the other Association
Member is a Parent/Subsidiary Financial Institution, etc. of the Association Member and the employee
to be hired is an employee thereof.
2. An Association Member must not hire any person who has been treated as a Class-1 Perpetrator of an
Inappropriate Act by the Association prescribed in the provision of Article 12, Paragraph 1, regardlessof whatever name he/she may use.
3. An Association Member must not hire any person who has been treated as a Class-2 Perpetrator of an
Inappropriate Act by the Association prescribed in the provision of Article 12, Paragraph 1 hereof during
the period of five years from the date when the decision on such treatment is made regardless of whatever
name he/she may use.
(Reference to the Association)
Article 5 If an Association Member intends to hire a person who used to be an Employee of another
Association Member, Financial Instruments Intermediary Service Provider or used to be a Sales
Representative thereof, or who is currently an Employee of another Association Member, Financial
Instruments Intermediary Service Provider or a Sales Representative thereof, it must refer to the
Association using a designated method whether or not such person has been treated as the Class-1
Perpetrator of an Inappropriate Act that is prescribed in Article 12, Paragraph 1.
2. If an Association Member intends to hire a person who was an Employee of another Association Member,a Financial Instruments Intermediary Service Provider or a Sales Representative thereof, or a Sales
Representative of a Financial Service Intermediary (means the sales representative as defined in Article
75, Paragraph 1 of the Act on the Provision of Financial Services (hereinafter referred to as the “Financial
Services Act”); the same shall apply hereinafter) in the past five years, or who is currently an Employeeof another Association Member, Financial Instruments Intermediary Service Provider or a Sales
Representative thereof, or a Sales Representative of a Financial Service Intermediary, it must refer to the
Association using a designated method to determine whether or not such person has been treated and hasreceived any decision concerning action and disciplinary action set forth in each Item of Paragraph 5.
3. If an Association Member intends to hire a person who is seconded from another Association Member,
who was seconded to another Association Member and is to be returned, or a person who is an Employeeof another Association Member which is a parent or subsidiary financial institution etc. of such
Association Member, the provisions in the preceding two Paragraphs shall not apply.
4. When the Association receives a request for reference under the provision of Paragraph 1, it shall reply
to the Association Member which made such reference using a designated method whether or not thereferred person has been treated as a Class-1 Perpetrator of an Inappropriate Act and a summary thereof
without delay.
5. When the Association receives a request for reference under the provision of Paragraph 2, it shall reply
to the Association Member which made such reference using a designated method whether or not thereferred person has been subject to any treatment and decision concerning any action or disciplinary
action by the Association that are set forth in each Item below in the latest five years from the reply date
and a summary thereof without delay:(1) Decision that he/she has been a Class-2 Perpetrator of an Inappropriate Act pursuant to the provisionof Article 12, Paragraph 1;(2) Disciplinary action ordering his/her registration of Sales Representative to be revoked or his/her
performance of Duty of Sales Representative to be suspended pursuant to the provision of Article
64-5, Paragraph 1 of the FIEA (including cases where it is applied mutatis mutandis pursuant to3

Article 66-25 of the FIEA and Article 77 of the Financial Services Act );(3) Decision concerning the Action Prohibiting Duties of Sales Representative pursuant to the provisionof Article 6, Paragraph 1 of the Sales Representative Rules (including cases where it applies mutatis
mutandis to Paragraph 6 of the same Article);(4) Decision concerning the Action Prohibiting Duties of Sales Representative pursuant to the provisionof Article 29, Paragraph 1 of the Financial Instruments Intermediary Service Provider Rules;(5) Decision concerning the Action Prohibiting the Appointment and Allocation of Sales Manager orInternal Administrator pursuant to the provision of Article 17, Paragraph 1 or Article 18, Paragraph
1 of the Internal Administrator Rules.

CHAPTER III. SERVICE STANDARDS(Basic Service Standards)
Article 6 An Association Member must have its Employees recognize public nature and importance ofthe social mission of the Financial Instruments Business and use their best efforts to perform their own
duties based on the spirit of investor protection.
(Prohibited Acts)
Article 7 An Association Member must ensure that its Employees do not engage in acts set forth in each of
the following Items in addition to acts prohibited for employees of Financial Instruments Business
Operators under the FIEA and relevant laws and regulations (including those that apply mutatis mutandis
to employees of Registered Financial Institutions):(1) To make an offer or promise, or to have a third party make an offer or promise, to a customer(including entrusting customers in cases where a trust company, etc., (a trust company or a financial
institution that is authorized pursuant to the provision of Article 1, Paragraph 1 of the Act on Provision,
Etc. of Trust Business by Financial Institutions; the same shall apply hereinafter) effects in Sale andPurchase or Other Transactions of Securities, etc., Securities-Related Derivative Transactions, theSpecified OTC Derivative Transactions, or Commodity-Related Market Transactions of Derivatives on
the account of the customer entrusting in accordance with a trust agreement; the same shall apply
hereinafter in this Item, the following Item and Item 3 below) or a person designated by the customer,
with respect to Sale and Purchase or Other Transactions of Securities, etc. (excluding transactions
effected on the condition of repurchase at a pre-determined repurchase price and other transactionsprescribed in the provision of Article 16-5 of the Financial Instruments and Exchange Act Enforcement
Order (hereinafter referred to as “FIEA Enforcement Order”); the same shall apply in the following
Item and Item 3 below), to the effect that an Employee or a third party shall provide financial returns
to the customer concerned or a third party in order to compensate for or cover the whole or part of aloss or unrealized profit if the customer incurs a loss or if a predetermined amount of profits is notrealized in regard to such securities pertaining to the said Sale and Purchase or Other Transactions ofSecurities, Securities-Related Derivative Transactions (the Securities-Related Derivative Transactionsprescribed in the provision of Article 3, Item 7 (b) of the Articles of Association; the same shall apply
hereinafter), Specified OTC Derivative Transactions (the Specified OTC Derivative Transaction
prescribed in the provision of Article 3, Item 7 of the Articles of Association; the same shall apply
hereinafter), or Commodity-Related Market Transactions of Derivatives (hereinafter referred to as“Securities”);(2) To make an offer or promise, or to have a third party make an offer or promise, to a customer or a4person designated by the customer to the effect that with respect to Sale and Purchase or Other
Transactions of Securities, etc., an Employee or a third party shall provide financial returns to thecustomer concerned or a third party in order to compensate for or cover the whole or part of a loss or
to add to the customer's profits arising from such Securities;(3) To offer, or to have a third party offer, financial returns to a customer or a third party with respect
to the Sale and Purchase or Other Transactions of Securities, etc., in order to compensate for thewhole or part of a loss arising from such Securities or to add to the customer's profits arising fromsuch Securities;(4) To engage in margin transactions, Securities-Related Derivative Transactions, Specified OTC
Derivative Transactions, or Commodity-Related Market Transactions of Derivatives (excluding thereverse trades and the physical deliveries that are made to settle such margin transactions, SecuritiesRelated Derivative Transactions, Specified OTC Derivative Transactions, or Commodity-RelatedMarket Transactions of Derivatives) on an Employee’s own account regardless of the name used forthe transaction; provided, however, that it shall not apply to cases where shares or stock options(including the shares and stock options of the parent company if the Association Member is a
consolidated subsidiary) are determined to be granted to such Employee by the Association Member aspart of compensation, and during the period prescribed below, the transaction of such shares and stock
options is (i) made for the purpose of reducing risks associated with the ownership of such shares orstock options that is prescribed in the provision of Article 2, Paragraph 21, Item 3 of the FIEA, (ii)those prescribed in the provision of Paragraph 22, Item 3 of the same Article, and (iii) those prescribedin the provision of Paragraph 23 of the same Article and are similar to the transaction prescribed in
Paragraph 21, Item 3 of the same Article and approved by the Association Member that the transaction
is not for pursuing a speculative profit:(a) Shares: From the date when the decision is made to grant the stocks, to the date when the share isactually granted;(b) Stock options: From the date when the decision is made to grant the stock options, to the date when
the option is exercisable.
(5)

To make a solicitation for Sale and Purchase or Other Transactions of Securities, etc. with anexcessive quantity in light of the amount of investment funds or other information that has come to
the knowledge of the Employee through the customer card, etc.;(6) To solicit a customer for Sale and Purchase or Other Transactions of Securities, etc. by promising
to share with the customer concerned profits or losses resulting from the transaction concerned, or
to carry out such a promise;(7) To become the counterparty of the transaction for executing an order from a customer for Sale andPurchase or Other Transactions of Securities, etc.
(8) To allow a customer to use the concerned Employee’s own name or address or the name or addressof his/her relative or of a person who has a special relationship with him/her for Sale and Purchaseor Other Transactions of Securities, Securities-Related Derivative Transactions, Specified OTC
Derivative Transactions, Commodity-Related Market Transactions of Derivatives, or transferring
securities;(9) To accept an order knowing that the transaction is being made under a false name in case where anorder for Sale and Purchase or Other Transactions of Securities, etc. is placed by a customer;(10) To use the name or address of a customer for Sale and Purchase or Other Transactions of Securities,
etc., Securities-Related Derivative Transactions, Specified OTC Derivative Transactions,, orCommodity-Related Market Transactions of Derivatives on the concerned Employee’s own

5account;(11) To process name transfer of securities or other formalities requested by his/her customer without
procedure of the Association Member to which he/she belongs;(12) To fail to deliver without delay to the Association Member to which he/she belongs to the money or
securities which his/her customer has deposited and instructed him/her to deliver to the Association
Member, or to fail to deliver without a delay to a customer the money and securities (for a Specified
Business Member, limited to the money and securities related to the Specified Business, and for aSpecial Member, limited to the money or securities related to the Registered Financial Institution
Business) which the Association Member to which he/she belongs has instructed him/her to deliverto the customer concerned;(13) To fail to deliver without a delay to a customer documents concerning business (for a Specified
Business Member, limited to the documents relating to Specified Business, and for a Special
Member, limited to the documents relating to Registered Financial Institution Business) which the
Association Member to which he/she belongs has deposited and instructed him/her to deliver to thecustomer concerned;(14) To lend to or borrow from a customer money or securities in connection with Sale and Purchase or
Other Transactions of Securities, etc. (including temporary advance for the customer’s obligations);(15) To leak secrets that have come to his/her knowledge in the course of the performance of his/herduties (for a Specified Business Member, limited to the secrets relating to the Specified Business,for a Special Member, limited to the secrets relating to Registered Financial Institutions Business);(16) To conduct a preferential allotment of public offering shares to specified parties concerned before
the public offering that is prescribed in the provision of Article 2, Paragraph 2 of the “Rules
Concerning Distribution to Customers Related to Underwriting, Etc. of Public Offering, Etc. of
Share Certificates, Etc.” (excluding the cases that meet the provisions of the same Paragraph);(17) To place an advertisement or offer premiums at the Employee's own discretion, without undergoing
examination by the Advertising Examining Officer (the “Advertising Examining Officer”
prescribed in Article 5 of the “Rules Concerning Representation of Advertising, Etc. and Offer ofPremiums”);(18) To make a transaction or solicit a customer to make a transaction related to the Registered Financial
Institution Business by promising to offer a special advantage related to the extension of loan andthe giving of a guarantee, etc.;(19) To make, in connection with a transaction relating to the Registered Financial Institution Business,any credit extension that clearly represents the acceptance of an initial or additional margin;(20) In the transaction related to the Financial Instruments Intermediary Service as a Registered Financial
Institution (business set forth in Article 33, Paragraph 2, Item 3 (c) and Item 4 (b) of the FIEA
(excluding the rights that are set forth in each Item of Article 2, Paragraph 2 of the FIEA and thatare regarded as the securities prescribed in Article 2, Paragraph 2 of the FIEA); the same shall apply
hereinafter) to do the Financial Instruments Intermediary Service as a Registered Financial
Institution with the customer assuming that a credit is automatically provided or promise to thecustomer to automatically provide a credit to the customer’s account opened in the Association
Member when it does not have sufficient fund;(21) To receive an order for a sale of securities from a customer that is conducted in a financial
instruments exchange market without confirming whether or not such sale of securities is a short6

sale (a “short sale” prescribed in the provision of Article 26-2-2, Paragraph 1 of the FIEA
Enforcement Order; the same shall apply in the following Item and Item 25 below); provided,
however, that this provision shall not apply to cases where the transactions are those prescribed in
the provision of Article 11 of the Cabinet Office Ordinance Concerning Transaction Control on
Securities (hereinafter referred to as the “Transaction Control Ordinance”). The provisions in the
body text and proviso of this Item shall apply mutatis mutandis to sale of securities in the
Proprietary Trading System (the Proprietary Trading System prescribed in the provision of Article
26-2-2, Paragraph 7 of the FIEA Enforcement Order) (the same shall apply in the following Item);(22) To conduct a short sale of securities entrusted by a customer in a financial instruments exchange
market at a price not more than the Most Recent Public Price (the Most Recent Public Price definedin Article 26-4, Paragraph 1 of the FIEA Enforcement Order) if this case meets any of the Items of
Article 26-4, Paragraph 1 of the FIEA Enforcement Order; provided, however, that the transactionsprescribed in the provision of Article 15 of the Transaction Control Ordinance and transactions forwhich the Most Recent Public Price is used when the price that was publicly announced before theannouncement of the Most Recent Public Price is different from the Most Recent Public Price andexceeds the Most Recent Public Price are excluded (the same shall apply in the following Item);(23) To direct other Regular Members to conduct a short sale at a price not more than Most Recent Public
Price of such securities when entrusting such Regular Member with the short sale ordered by acustomer;(24) When soliciting a customer to switch (meaning partial cancellation of the investment trust contract
related to the investment trust beneficiary certificates, etc. the customer currently holds or refundof investment units, or sale of investment trust beneficiary certificates, etc., or entrusted acquisitionor purchase of the investment trust beneficiary securities, or such entrustment; the same shall apply
hereinafter) to other investment trust beneficiary certificates, etc. (beneficiary certificates ofinvestment trusts or foreign investment trusts (excluding those set forth in Article 65, Item 2 (a)through (c), of the Cabinet Office Ordinance on Financial Instruments Business, Etc. and those withthe same nature), investment securities or foreign investment securities equivalent to investment
securities; and excluding those listed on a Financial Instruments Exchange Market; the same shallapply hereinafter), not to provide the customer (excluding professional investors (the professional
investors prescribed in the provision of Article 2, Paragraph 31 of the FIEA (excluding thecustomers regarded as non-professional investors pursuant to Article 34-2, Paragraph 5 of the FIEA,
and including those regarded as the professional investors pursuant to Article 34-3, Paragraph 4(including cases which apply where it applies mutatis mutandis to Article 34-4, Paragraph 6)); thesame shall apply in the following Item and Item 26 with principal matters regarding such switching;(25) To conduct the solicitation without confirming the acceptance of solicitation with a customer inadvance when executing a CFD transaction contract (CFD transaction contract as prescribed in
Article 3, Item 3 of the “Rules Concerning CFD Transactions” (excluding OTC CFD transaction
contracts prescribed in Item 4 of the same Article); the same shall apply hereinafter);(26) To continue the solicitation to the customer who received the initial solicitation but clearly indicates
its intention not to execute the CFD contract (including its intention to no longer receive thesolicitation);(27) To conclude a contract with knowing that the customer is a member of anti-social forces that isprescribed in Article 15 of the Rules Concerning the Enforcement of the Articles of Association
when conducting sale and purchase and other transactions of securities with an Association Member
or a Specified Business Member. However, this provision does not apply if such action is performed
for the purpose of eliminating the anti-social forces from financial instruments transactions andfinancial instruments markets.

7(Improper Acts)
Article 8 An Association Member must give guidance and exercise supervision so that its Employees will
not engage in any act set forth in each of the following Items (hereinafter referred to as “Improper Act”):(1) In Sale and Purchase or Other Transactions of Securities, etc., to execute a customer’s order without
confirming the issue, price, quantities, whether the order is a limit order or market order, or otherdetails of the customer’s order (for a Specified Business Member, limited to a customer’s orderrelated to the Specified Business, and for a Special Member, limited to a customer’s order related
to the Registered Financial Institution Business; the same shall apply in Item 4 below);(2) To solicit a customer in a manner that will mislead him/her with respect to the nature of securities,
or conditions of transactions;(3) In Sale and Purchase or Other Transactions of Securities, etc., to solicit a customer in a manner thatwill mislead him/her with respect to the (i) rise or fall in the price of securities or the amount of theoption premium, (ii) rise or fall of the contracted value or actual value for the transaction set forthin Article 2, Paragraph 21, Item 2 of the FIEA (including foreign market Derivative transactions
that are similar to such transactions) or the transaction set forth in Article 2, Paragraph 22, Item 2of the FIEA, (iii) rise or fall of the financial index or the financial instruments price related to thetransaction set forth in Article 2, Paragraph 21, Item 4 or 4-2 of the FIEA, or Article 2, Paragraph
22, Item 5 of the FIEA, or (iv) occurrence or non-occurrence of the reason set forth in Article 2,
Paragraph 22, Item 6 (a) or (b); or(4) To make a mistake in the administration process by negligence with respect to the execution of acustomer’s order related to the Sale and Purchase or Other Transactions of Securities, etc.

CHAPTER IV. DISCIPLINARY ACTION, ETC. AGAINST VIOLATORS OF LAWS
AND REGULATIONS, ETC.
(Notification of Incidents)
Article 9 In cases where it is found that any person who is currently, or who had been previously, an
Employee of an Association Member (hereinafter referred to as the “Employee, etc.”) has committed an
act as prescribed in each Item of Article 7, Paragraph 3 hereof, in Article 5 of the Sales Representative
Rules, or an act in violation of any law and regulation, etc. which the Employee is required to observe,
or any Improper Act prescribed in the preceding Article (hereinafter referred to as “Incident”), theAssociation Member must immediately submit to the Association a Report on Incidents stating the details
in the prescribed form, unless the Improper Act prescribed in the preceding Article was committed by
negligence.
2. The Association may, when deemed necessary regarding the details of Incidents in the Report on Incidents
set forth in the preceding Paragraph, request the Association Member to submit further reports ormaterials to the Association.
3. The Association Member must comply with the request to submit reports or materials prescribed in thepreceding Paragraph to the Association.
(Report of Development and Results of the Incidents)

8Article 10 When the details of Incident prescribed in the preceding Paragraph (excluding the case where
Improper Act prescribed in Article 8 hereof was committed by negligence) are found out, an Association
Member must take an appropriate disciplinary action against the Employee, etc. in light of the nature of
the Incident concerned and must submit, without delay, to the Association a Report of Development and
Results of the Incidents stating the particulars of the case using the prescribed form.
2. An Association Member shall, when it recognizes that Incident prescribed in the preceding Paragraph isof a nature that impairs a great deal of public confidence in the Financial Instruments Business, append
a note to that effect to a Report of Development and Results of the Incidents.
3. An Association Member must, where it has disciplined an Employee on the grounds of Incident, record
the state of that disciplinary action and, when the Association deems it necessary, must report suchsituation of that disciplinary action in writing to the Association.
(Examination)
Article 11 In cases where the Association has received a Report of Development and Results of the
Incidents pursuant to the provisions of the preceding Article, it shall examine the contents thereof.
2. The Association may, when deemed necessary in connection with the examination prescribed in preceding
Paragraph, request the Association Member to give an explanation of the contents of the report or submit
documentary evidence, etc.
3. The Association Member must comply with the request to give an explanation or submit documentary
evidence, etc. prescribed in the preceding Paragraph to the Association.
4. The Association may conduct an examination prescribed in Paragraph 1 based on the Report ofDevelopment and Results of the Incidents that is prescribed in the preceding Article and other materials
the Association deems appropriate (hereinafter referred to as the “Accredited Materials”).
(Treatment of Perpetrators of Inappropriate Acts)
Article 12 In cases where the Association finds, as a result of the examination pursuant to the provisionsof the preceding Article, that the Employee, etc. has resigned, has been internally disciplined by the
Association Member in a manner that is equivalent to discharge, or is an employee of an Association
Member in which registration prescribed in Article 29 or Article 33-2 of the FIEA was revoked, and that
his/her act is deemed to be impairing a great deal of public confidence in the Financial Instruments
Business, it is judged that such person shall be regarded as the perpetrator of an inappropriate act, andhis/her qualifications as a sales representative as prescribed in the Sales Representative Rules, as well as
Sales Manager and Internal Administrator prescribed in the Internal Administrator Rules shall be revoked.
In the above case, a person who committed any action that could significantly impact on the trust granted
to the Financial Instruments Business shall be regarded as a Class-1 Perpetrator of an Inappropriate Act,and other persons are regarded as a Class-2 Perpetrator of an Inappropriate Act, respectively.
2. An action to regard a person as the perpetrator of an inappropriate act pursuant to the preceding Paragraphshall commence when the judgment in the preceding Paragraph is made.
(List of Perpetrators of Inappropriate Acts)
Article 13 The Association shall be equipped with a list of persons who are determined by the Association
to be regarded as perpetrators of inappropriate acts pursuant to the provision of Article 12, Paragraph 1(hereinafter referred to as the “List of Perpetrators of Inappropriate Acts” where the name, and dateof birth of such people, details of the incident that caused such people to be regarded as perpetrators of9

inappropriate acts, category of Class-1 Perpetrator of an Inappropriate Act or Class-2 Perpetrator of an
Inappropriate Act, the date when the determination is made to regard such people as perpetrators of
inappropriate acts, and other matters that are deemed necessary.
(Application for Release)
Article 14 In cases where an Association Member finds it appropriate to release any of its employees who
had been regarded as the perpetrators of inappropriate acts by the Association from such treatment
because the employees have shown clear signs of remorse, or a new fact is found regarding the incident
that caused such person to be regarded as a perpetrator of an inappropriate act, or if there is a special
reason, it may file with the Association an application for the release of such treatment.
2. When a person who is regarded as a perpetrator of inappropriate act finds a new fact regarding the incident
that caused such person to be regarded as the perpetrator of an inappropriate act, or if there is a special
reason, it may file with the Association an application for the release of treatment as a perpetrator of
inappropriate act.
(Application for Release of Treatment as Perpetrator of Inappropriate Act)
Article 14-2 The application for release as prescribed in the preceding Article must be done by submitting
to the Association a document describing the following matters (hereinafter referred to as the“Application Form for Release of Treatment as Perpetrator of Inappropriate Act”) by an Association
Member or the person treated as the perpetrator of an inappropriate act by the Association (hereinafterreferred to as the “Release Applicant”):(1) In the case that the Release Applicant is the Employee, etc., the name, date of birth, and address ofsuch Employee, etc.;(2) In the case that the Release Applicant is an Association Member, the trade name and address of the
Association Member, and the name, date of birth, and address of the Employee, etc. treated as theperpetrator of an inappropriate act by the Association;(3) Date when the determination to treat a person as the perpetrator of an inappropriate act is made, andthe details thereof;(4) Reason why the application for release is made;(5) Date when the application for release is made.
2. Documentary evidence, etc. associated with the reason as prescribed in Item 4 of the preceding Paragraphmay be attached to the Application Form for Release of Treatment as Perpetrator of Inappropriate Act.
(Release and Notification)
Article 15 The Association shall, when receiving an application prescribed in the preceding Article,
examine it and may determine to release the person related to the application, when deemed appropriate,from the treatment as the perpetrator of an inappropriate act.
2. The Association shall notify the result of the review of application prescribed in the preceding Paragraphto the Employee, etc., and the Submitting Association Member who are involved in such application, and
the Association Member who conducted such application.
3. The Association shall, when releasing a person from the treatment as the perpetrator of inappropriate act
prescribed in Paragraph 1, erase the description in regard to the person from the List of Perpetrators of
Inappropriate Acts.
(Notice of Result of Application for Release)10Article 15-2 The notice prescribed in Paragraph 2 of the preceding Article shall be made by a document
describing the following matters:(1) Name, etc. of the Employee, etc. who relates to the application for release;(2) The result of the review prescribed in Paragraph 1 of the preceding Article and the reason for the
result.
(Costs)
Article 15-3 Costs for the procedures prescribed from Article 14 to Article 15-2 shall be borne by the
Release Applicant, except for the cost for making a written notice by the Association.

CHAPTER V. MISCELLANEOUS PROVISIONS(Report on the Number of Employees, Etc.)
Article 16 An Association Member must make a report, without delay, to the Association on the numberof its Employees as of the end of June and December each year and on personnel changes in its
Employees that have taken place during the six-month period immediately after the personnel changes
stated in the last report using the report on the number of Employees, etc. of the prescribed form.
(Mutatis Mutandis Application to Officers of the Association Member)
Article 17 The provisions in Article 3-2, Article 4, Paragraphs 2 and 3, Article 5, and from Article 7 to 16
shall apply mutatis mutandis to officers of an Association Member (for a foreign corporation, those whohave a control power equivalent to an officer on such corporation regardless of its name or title; the same
shall apply hereinafter), officers of a Specified Business Member who are in charge of the Specified
Business, and officers of a Special Member who are in charge of the Registered Financial Institution
Business.

SUPPLEMENTARY PROVISIONS [Omitted](Note) This amendment comes into effect as of February 1, 2022.
This amendment comes into effect as of September 26, 2022.
This translation is solely for the convenience of those interested therein, and accordingly all questions that
may arise with regard to the meaning of the words or expressions herein shall be dealt with in accordancewith the original Japanese text.

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