Rules Concerning Disciplinary Actions, etc.
(Purpose)
Article 1.
The purpose of these Rules is to prescribe matters that are necessary in relation to thedisciplinary actions and other measures, etc. against Regular Members and Electronic
Public Offering Members provided for in Article 23 and Article 24 of the Articles ofIncorporation.
(Investigation, etc.)
Article 2.
When the Association received a notification or report from any Regular Member orElectronic Public Offering Member pursuant to the provisions of Article 15 or Paragraph
1 of Article 16 of the Articles of Incorporation, the Association shall perform
investigation, as prescribed in Operational Rules, on the matters that are so notified orreported, as necessary in consideration of the situation of compliance by the relevant
Regular Member or Electronic Public Offering Member with laws and regulations, orders
issued under laws and regulations, dispositions thereunder, the Articles of Incorporationand other rules, and with the fair and equitable principles of transactions, as well as inconsideration of the conditions of the business and assets of such member.
(Submission of Case to Discipline Committee)
Article 3.
1. If, as a result of the investigation provided for in the preceding Article, theAssociation deems appropriate to impose any of the disciplinary actions prescribed inParagraph 2 of Article 23 of the Articles of Incorporation (hereinafter referred to as“Disciplinary Action”) or issue the admonition prescribed in Article 24 of the Articlesof Incorporation against the relevant Regular Member or Electronic Public Offering
Member, the Association may submit the case in which such Disciplinary Action oradmonition is deemed appropriate to Discipline Committee by attaching thereto theresult of the investigation performed pursuant to the provision of the preceding
Article, and seek its opinion on the case.
2. Necessary matters concerning the composition, operation, etc. of Discipline
Committee shall be prescribed in Discipline Committee Rules.
(Deliberation, etc. by Discipline Committee)
Article 4.

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1. Discipline Committee shall deliberate on Disciplinary Action or admonition(including the type and the extent of Disciplinary Action if it is a case whereimposition of Disciplinary Action is deemed appropriate, and including its contents if
it is a case where issuance of admonition is deemed appropriate; the same shall apply
hereinafter) against Regular Member or Electronic Public Offering Member in respectof the case submitted under the preceding Article, the case reported pursuant toParagraph 2 of Article 9 of Inspection Rules, or any other case which is deemednecessary by Discipline Committee.
2. In order to execute the deliberation provided for in the preceding Paragraph,
Discipline Committee may order Secretariat, as necessary, to perform relevant
investigation and report the result of such investigation.
3. If Discipline Committee deems necessary for its deliberation, it may request thepresence of the Regular Member or Electronic Public Offering Member which isconcerned with the relevant case and ask such member questions, or request suchmember to submit information materials.
4. If Discipline Committee has determined, as a result of the deliberation under theprovision of Paragraph 1, that it is appropriate to subject the relevant Regular
Member or Electronic Public Offering Member to Disciplinary Action or admonition,
it shall submit, to the Board of Directors for deliberation, its reason, the fact which isthe subject of the relevant Disciplinary Action, and its type and extent, if the case isfor Disciplinary Action, or its reason and the fact which is the subject of the relevantadmonition, if the case is for admonition.
(Warning)
Article 5.
In addition to Disciplinary Action and admonition, the Association may issue warning(hereinafter referred to as “Warning”) either verbally or in writing in accordance with thesubstance of the case.

(Request for Business Operation Improvement Plan, etc.)
Article 6.
In the event the Association has imposed Disciplinary Action or issued admonition
against Regular Member or Electronic Public Offering Member, the Association may
request the relevant Regular Member or Electronic Public Offering Member to prepare
business operation improvement plan and to report on the status of implementation of themeasures pursuant to such business operation improvement plan and on any other mattersthat are deemed necessary.
(Proceeding for Presenting Explanation)

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Article 7.
1. When the Association is to submit a matter concerning Disciplinary Action oradmonition against Regular Member or Electronic Public Offering Member to theBoard of Directors for deliberation, the Association should provide the relevant
Regular Member or Electronic Public Offering Member with opportunity to present
explanation in advance.
2. For providing the opportunity to present explanation being referred to in thepreceding Paragraph, the Association shall notify the relevant Regular Member orElectronic Public Offering Member of the fact which is the subject of Disciplinary
Action or admonition as well as the date and time and the place for presenting
explanation by two weeks in advance.
3. If the Association cannot confirm, on the day on which 14 days have elapsed since
the date on which the notice was issued under the preceding Paragraph, that the notice
has arrived at the relevant Regular Member or Electronic Public Offering Member,the notice shall be deemed to have arrived at the relevant Regular Member orElectronic Public Offering Member upon the day on which the said 14 days haveelapsed.
4. For presenting its explanation, the relevant Regular Member or Electronic Public
Offering Member may submit a written explanation by the deadline designated by theAssociation, and may orally state facts and opinions and submit documentary
evidence and articles of evidence when presenting explanation.
5. When presenting its explanation, the relevant Regular Member or Electronic Public
Offering Member may have its assistant attend the proceeding by procuring thechairperson’s permission.
6. If the relevant Regular Member or Electronic Public Offering Member failed toappear without appropriate reason, the Association may conclude the proceeding
without providing another opportunity for presenting explanation.
(Chairpersonship of Proceeding for Presenting Explanation)
Article 8.
Proceeding for presenting explanation shall be presided over by the officer or employeeof the Association appointed by the Association; provided, however, that a person who
was deemed by the Association to have special interest in the Regular Member orElectronic Public Offering Member which is going to present explanation cannot presideover the proceeding for presenting explanation.
(Deliberation, etc. by the Board of Directors)
Article 9.
1. The Board of Directors shall deliberate on the result of the deliberation submitted byDiscipline Committee pursuant to Paragraph 4 of Article 4.

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2. In resolving on the matter, the Board of Directors shall respect the result of thedeliberation by Discipline Committee.
(Submission of Case to General Meeting of Members)
Article 10.
1. In the event the Board of Directors has determined, as a result of the resolution
adopted pursuant to the preceding Article, that it is appropriate to expel Regular
Member or Electronic Public Offering Member, the Board of Directors shall submit
the case concerning expulsion of the relevant Regular Member or Electronic Public
Offering Member to General Meeting of Members for deliberation.
2. Provisions of Article 7 (except for Paragraph 4) shall be applied mutatis mutandis tothe submission of the case concerning expulsion of Regular Member or Electronic
Public Offering Member to General Meeting of Members under the preceding
Paragraph. In such case, the term “in advance” in Paragraph 1 of the said Article
shall be deemed to be replaced with “at the relevant General Meeting of Members,”
the term “2 weeks” in Paragraph 2 of the said Article with “one week,” the term “14days” in Paragraph 3 of the said Article with “7 days,” and the term “conclude theproceeding” in Paragraph 6 of the said Article with “resolve on the matter.”(Notice of Disciplinary Action, etc.)
Article 11.
1. In the event the Board of Directors has adopted resolution for Disciplinary Action(except for expulsion) or admonition against Regular Member or Electronic Public
Offering Member, the Association shall notify in writing the relevant Regular
Member or Electronic Public Offering Member of its reason, the fact which is thesubject of the relevant Disciplinary Action, and its type and extent, if the case is for
Disciplinary Action, or its reason, the fact which is the subject of the relevantadmonition, and any other matters that are deemed necessary by the Association, if
the case is for admonition.
2. In the event General Meeting of Members has adopted resolution for expulsion ofRegular Member or Electronic Public Offering Member, the Association shall notify
in writing the relevant Regular Member or Electronic Public Offering Member of thefact which is the subject of the Disciplinary Action, its reason, and any other mattersthat are deemed necessary by the Association.
(Publication of Disciplinary Action)
Article 12.
1. When the Association imposed Disciplinary Action on Regular Member or Electronic
Public Offering Member, the Association shall notify each Regular Member andElectronic Public Offering Member of such fact.

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2.

When the Association made the notification under the preceding Paragraph, it shall
publish such notice.

Supplementary Provisions (May 20, 2011)
These Rules shall become effective from the date on which the Association is certified by
the Prime Minister as Financial Instruments Firms Association provided for in Article 78,
Paragraph 1 of FIEA (June 30, 2011).

Supplementary Provisions (May 26, 2015)
This amendment shall become effective from the date (May 29, 2015) provided for in themain text of Article 1 of the Supplementary Provisions of the Act for Amendment of theFinancial Instruments and Exchange Act (2014, Act No. 44).
(Note) Amended provisions are as follows:
The title of the Rules; Article 1; Article 2; Paragraph 1 of Article 3;
Paragraphs 1, 3 and 4 of Article 4; Article 6; Paragraphs 1 through 6 ofArticle 7; Article 8; Paragraphs 1 and 2 of Article 10; Paragraphs 1 and 2 ofArticle 11; and Paragraph 1 of Article 12.
This translation is solely for the convenience of those interested therein, andaccordingly all questions that may arise with regard to the meaning of the words orexpressions herein shall be dealt with in accordance with the original Japanese text.

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