Attachment 1
Control Objectives and Key Control Points concerned with Internal Control Framework for
Segregated Management
1. General Matters
Control Objectives

Key Control Points Example(1) Directors shall recognize(i) Directors understand that the segregated management system forthe importance ofcustomer assets contributes to investor protection and as such, thecompliance with the laws

sound development of the securities market, while recognizing theand regulations, etc.

importance of compliance with the laws and regulations, etc.

concerning the segregatedconcerning the segregated management.

management and shall be(ii) Regarding the status of compliance with the laws and regulations,aware of the status of theetc. concerning the segregated management, appropriate reportingorganization’s compliancestructure to the Board of Directors, representative director,

with the relevant laws andcompliance officer (meaning person in charge of legal compliance;

regulations as appropriate.

the same shall apply hereinafter ), etc. has been established and isbeing appropriately operated.

(2) Organizational structure,(iii) In order to comply with the laws and regulations regarding

etc. for compliance withsegregated management, the management method and department

the laws and regulations,in charge, etc. have been clearly prescribed and documented asetc. concerning therules, manuals, etc. In addition, a system has been established tosegregated management

ensure all officers and employees concerned are fully informed ofhas been established withsuch matters and is being properly operated.

each employee carrying

Furthermore, in the event of any change to the laws, regulations,out one’s daily duties

and rules relating to the segregated management, a system has

based on fullbeen established and is being properly operated to make allunderstanding of theofficers and employees fully aware of such change and to apply

relevant laws,

such change to the related systems and programs.

regulations, internal(iv) A system has been established and is being properly operated torules, and other matters

appropriately respond to any violation of laws or regulations

regarding the segregateddetected in relation to the segregated management or any mattermanagement

indicated in the inspection by the Financial Services Agency or theinvestigation by the Investment Trusts Association.

(3) Independent department(v) A system has been established and is properly being operated

to properly monitor thewhere an independent department such as an Internal Audit

status of segregatedDivision periodically verifies that the legal compliance with the

management in anlaws and regulations, etc. concerning the segregated management－ 1 －appropriate manner.

is being properly implemented and reports the outcome of suchverification to the Board of Directors, etc.

2. Segregated Management of Securities
Control Objectives

Key Control Points Example

2-1. General Matters(i) A system has been established for concluding contracts between

The officers andthe Financial Instruments Business Operator and the customer as

employees concerned shallappropriate (e.g., “Custody Agreement,” “Transfer Accountcomprehensively andContract,” etc.), and such system is properly functioning.

accurately identify the(ii) The scope, management method, and place of custody regarding

scope of customers’

the customers’ securities subject to segregated management by asecurities subject to themember is clearly defined in compliance with the laws andsegregated management asregulations, etc. concerning the segregated management in line

required by the laws andwith the individual business operations and product handled whileregulations, etc. concerned

proper internal rules, etc. have been established and are being

with such segregatedappropriately performed.

management in line withAt the same time, internal rules, etc. regarding how to respondthe types of business andto a new product and any change in the format of transactions, etc.

products handled by thehave been developed and are being properly implemented.

Financial Instruments
Business Operator.

<Reference>
Securities subject to segregated management
1. Securities temporarily deposited by a customer for sale
2. Securities deposited by a customer according to a custodyagreement or a management agreement of book-entry transfer
settlement account2-2. Third-Party Custody(i) When securities are kept by a third-party organization (such as a(1) Customer’s consent shallsecurities transfer agency, other financial instruments business

be obtained for having a

operator, or Japan Securities Depository Center, etc.), a systemthird party safekeep thehas been established to obtain consent for re-deposit fromrelevant securities.

customers in accordance with a contract, etc., and such system isfunctioning properly.

(2) The selection of a(ii) A system to examine the credit and management status of thethird-party organization to

relevant third-party organization has been established and is being

safekeep customers’

appropriately operated. The following are some examples of

securities shall beconsiderations:appropriate from the- Criteria for selecting a third-party organization at the time ofviewpoint of protecting the

opening a new account and periodical review of such

－ 2 －customers’ assets.

organization are provided.
- Information in order to grasp the credit status of the relevant
third-party organization can be obtained and analyzed in atimely manner.
- Management conditions of the relevant third-party organization
are being obtained and assessed.
- Through external audit, etc., it is being reviewed whether theoperational practices are properly conducted, and theverification results or proof thereof have been obtained in orderto understand the details of such verification.
(iii) A system to conclude an appropriate custody contract with athird-party organization in compliance with the laws andregulations, etc. concerning the segregated management has been
established and is being properly operated.

(3) Customer securities(iv) As for each method of custody agreed upon with a customer

subject to the segregatedregarding such customer’s securities, a system has been

management are managed

established and is being appropriately operated to ensure that theby having them undercustody business is conducted in accordance with any of thecustody in the manner

following methods as required under the laws and regulations, etc.

required by the laws andconcerning the segregated management and that accounting andregulations for segregatedother records are kept by the Financial Instruments Business

management while

Operator.

comprehensively<Simple Custody>

ascertaining theA third-party organization clearly separates the custody ofoutstanding balance ofcustomers’ securities from that of the proprietary securities ofsuch securities

the financial instruments business operators and keep such(commingled custody,

customers’ securities in a manner that is easy to promptly

non-commingled custody).

identify the specific customer who owns the relevant securities.
<Commingled Custody>
A third-party organization clearly separates the custody ofcustomers’ securities from that of proprietary securities of the
Financial Instruments Business Operator by such means as
segregating an account for the Financial Instruments Business
Operator from the one for the customers so that the securities
share of all the customers can be immediately ascertained.
Furthermore, securities share of each customer among suchcustomers’ securities shall be immediately identified by thebooks, etc. of the relevant Financial Instruments Business－ 3 －Operator. Securities that are jointly owned by the Financial
Instruments Business Operator and the customers (securities
jointly owned by the Financial Instruments Business Operator
and the customers pertinent to accumulated investment
products, etc.) shall be managed in such a manner that the shareof each customer can be immediately determined from thebooks, etc. of the relevant Financial Instruments Business
Operator.
(v) With regard to securities subject to the custody of a third-party
organization, a system has been established and is being
appropriately operated for the Financial Instruments Business
Operator to confirm that such third-party organization keeps
records and carries out the custody business in compliance withthe laws and regulations, etc. concerning the segregatedmanagement.
When an external auditor of the trustee company evaluates andreports the effectiveness of the internal control over the custodybusiness of securities concerned with such company, refer to theParagraph 11 of the Audit Standards Committee Report 402,
“Considerations when auditing enterprises with contract business”
by the Japanese Institute of Certified Public Accountants.
(vi) Even if there are no physical securities for the newly issued
investment trust beneficiary certificates, a system has been
established and is being appropriately operated so that the nameand quantities of such securities held by a specific customer canbe immediately confirmed on a customer-by-customer basis in theregistry books, etc., while properly implementing the existingprocedures for periodically checking and verifying the outstandingbalance of such securities and documenting such verification
outcome.
(4) Among all securities in(vii) With regard to securities held by a third-party organization,possession of a Financial

procedures have been developed and are being appropriately

Instruments Businessperformed where the balance reconciliation between the

Operator, the substantiality

accounting book records of the Financial Instruments Businessof book balance and status

Operator and the statements of such third-party organization areof the segregatedconducted on a regular basis, and procedures are in place andmanagement concerned

properly operated to ensure that any discrepancy identified as awith the securities underresult of such reconciliation is promptly investigated and－ 4 －custody of a third-party

addressed. The following are some examples of considerations:organization (separately(Refer to 4-2, (2)(iii))

for simple custody,- Collation is being performed at every transfer of the securities orcommingled custody or
joint custody) shall beverified.

at least every month.
- Procedures are in place for addressing and reporting any
discrepancy identified as a result of such collation.
- Results of collation and full accounts thereof are documented.
- The collation procedures are in place to ensure that all securities
in the possession of the Financial Instruments Business
Operator, regardless of their registered names, shall be included
in such collation, and that they are identifiably recorded in theappropriate customers’ accounts, etc.
(viii) With regard to the balance of customers’ securities, procedures
are in place and properly performed where transaction balancestatements are periodically sent to the relevant customers and any
inquiry, complaint, etc. from them is properly reported andaddressed. (See 4-1. (1))(ix) A system has been established and is being properly operated tocomprehensively verify that the customer securities andproprietary securities, etc. are not mixed by completely identifying
all the securities possessed by the Financial Instruments Business
Operator, including not only customers securities, but also
proprietary securities, etc. (such as those held in proprietaryaccount balances, borrowed securities, and securities received ascollateral for derivative transactions) and collating such securities
with the custody location thereof.

2-3. Account Management:(1) Among customers’(i) With regard to customer securities recorded in the transfer accountbook pursuant to the provisions of the Transfer Act, a system has

securities subject to thebeen established and is being appropriately operated to ensure that

segregated management,

account management is being conducted and accounting bookbalance of those that arerecords are possessed by the Financial Instruments Businessrecorded in the transfer

Operators in accordance with the means stipulated in the laws andaccount book as prescribed

regulations for segregated management.

in the Act on Transfer ofCorporate Bonds, Shares,
etc. (hereinafter referred toas the “Transfer Act”)
shall be comprehensively－ 5 －grasped, and suchsecurities are kept in amanner stipulated in thelaws and regulations forsegregated management.
(2) Among all securities in(ii) Among all securities in possession of a Financial Instruments

possession of a Financial

Business Operator, a system has been established and is being

Instruments Businessproperly operated to ensure the substantiality of book balance andOperator, the substantiality

status of the segregated management concerned with the securities

of book balance and statusrecorded in the transfer account book pursuant to the Transfer Act.

of the segregated(a) With regard to the securities recorded in the transfer accountmanagement concernedbook pursuant to the Transfer Act, procedures have beenwith the securities

developed and are being appropriately performed where therecorded in the transfer

balance collation between the book records for such transfer

account book pursuant toaccount book, etc. of the Financial Instruments Businessthe Transfer Act shall beOperator and the statements of the relevant third-party

verified.

organization are conducted on a regular basis, and procedures
are in place and properly operated to ensure that any
discrepancy identified as a result of such collation is promptly
investigated and addressed. The following are some examples
of considerations:- Collation is being performed at every transfer of the
securities or at least every month.
- Procedures are in place for addressing and reporting any
discrepancy identified as a result of such collation.
- Results of collation and full accounts thereof are
documented.
- The collation procedures are in place to ensure that all
securities in the possession of the Financial Instruments
Business Operator, regardless of their registered names,
shall be included in such collation, and that they are
identifiably recorded in the appropriate customers’
accounts, etc.
(b) With regard to the balance of customers’ securities,
procedures are in place and properly performed wheretransaction balance statements are periodically sent to therelevant customers and any inquiry, complaint, etc. from themis properly reported and addressed. (See 4-1. (1))－ 6 －(c) A system has been established and is being properly operated
to comprehensively verify that the customer securities andproprietary securities, etc. are not mixed by completely
identifying all the securities possessed by the Financial
Instruments Business Operator, including not only customers’
securities, but also proprietary securities, etc. (such as those
held in proprietary account balances, borrowed securities, andsecurities received as collateral for derivative transactions)and collating such securities with the custody location thereof.

3. Segregated Management of Money, etc.
Control Objectives

Key Control Points Example

3-1. General Matters(i) A system has been established and is being properly operated so(1) The officers andthat the officers and employees concerned can comprehensively

employees concerned shalland accurately identify the scope of customers’ securities subject

comprehensively andto the segregated management as required by the laws andaccurately identify theregulations on such segregated management. Additionally, rules

scope of customers’

regarding how to respond to a new product, new customer, andsecurities subject to the

any change in the format of transactions, etc. have been developed

segregated management as

and are being properly implemented.

required by the laws and(ii) A system has been established and is being properly operated soregulations, etc. concernedthat money brought in or out by sales representative, etc. for thewith such segregatedsettlement with customers are appropriately segregated in its

management in line withmanagement.

the types of business andproducts handled by the
Financial Instruments
Business Operator.
(2) The selection of a trust(iii) A system has been established and is being properly operated tobank in which a segregatedexamine the trust property management and credit status of thecustomer trust account istrust bank in which the segregated customer fund account is

to be established shall beestablished. The following are some examples of considerations:appropriate from theviewpoint of protecting
customer assets.

- Criteria for selecting a trust bank at the time of opening a new
account and periodical review are provided.
- Information to grasp the trust property management and credit
status of the trust bank has been obtained and analyzed in a timely
manner.
When an external auditor of the trustee company evaluates and－ 7 －reports the effectiveness of the internal control over the custodybusiness of securities concerned with such company, refer toParagraph 11 of the Audit Standards Committee Report 402,
“Considerations when auditing enterprises with contract business”
by the Japanese Institute of Certified Public Accountants.
(3) The contract with the(iv) The contents of the trust account conform to the laws andtrust bank for establishingregulations, etc. concerning the segregated management. In othera segregated customer trust

words, the trust agreement specifies the following points:

account shall include all- The trustee shall be a trust company or a financial institution

the provisions required byengaged in fiduciary business.

the laws and regulations- The Financial Instruments Business Operator shall be the settlor.

relevant to the segregated- Customers concerned with the financial instruments business

management.

conducted by such Financial Instruments Business Operator
shall be the beneficiary of the principal.
- An agent for the beneficiary shall be appointed from thefollowing:(1)A representative director or any other person equivalent thereto

who is responsible for the management of business execution,or(2) A person who has suitable qualification to supervise theexecution of the fiduciary duties such as lawyer, certified public
accountant, and so forth.
When any of the events set forth in each item of Article 79-53,

Paragraph 1 of the Financial Instruments Act applies to the relevant
Financial Instruments Business Operator, the agent for beneficiaryshall be the person set forth in (2) above.
(v) The management method of the trust property shall be incompliance with the laws and regulations, etc. concerning thesegregated management. In other words, assets subject toinvestment are limited to the following items in the trust
agreement:- National government bonds and other securities designated by
the Commissioner of the Financial Services Agency;- Deposit in a bank or any other financial institution designated by
the Commissioner of the Financial Services Agency; and- Other instruments designated by the Commissioner of the
Financial Services Agency (e.g., call loans, trust bank accountloan to a trust bank that is also a trustee, cash trusts with－ 8 －principal guarantee contracts, and others).
3-2. Customer SegregatedFund Management System(1) The method and object(i) A system has been established and is being properly operated sothat the calculation of segregated customer trust funds and thesegregated management of segregated fund accounts can befor calculation ofcomprehensively and accurately performed in compliance with thesegregated funds shall be

relevant laws and regulations. The following are some examples

specified, and the accuracyof considerations:and completeness of the- The method and subjects of calculation concerned with therecorded data to be used ascustomer segregated fund are prescribed in the internal rules,

the basis of calculation, as

guidelines, etc.

well as the consistency- Measures are taken to ensure the accuracy and completeness ofwith accounting bookthe recorded data required as base for the calculation ofrecords, shall be ensured.

customer segregated fund.
- Measures are taken to ensure the consistency of the accounting
book records with the data required as base for the calculationof customer segregated fund.
- In the internal regulations, etc., in addition to the Adjustment
Calculation Record Date regarding segregated customer trust
fund, the alternative treatment is provided for when such
Record Date is a holiday (if such date is a holiday, the Record
Date is to be advanced to the previous day or postponed to thenext day).

(2) The necessary amount of(ii) The Financial Instruments Business Operator has established andsegregated customer funds

is properly operating a system for calculating the following

as the sum of segregatedsegregated customer fund for each customer every day incustomer funds shall becompliance with the laws and regulations, etc. concerning the

calculatedsegregated management and internal rules.

comprehensively and- Total amount of the market value (value calculated based on theaccurately in compliancelast price published on the relevant day or one calculated in awith the laws andreasonable manner as equivalent thereto) of money andregulations, etc.

securities to be segregated as the segregated customer fund.

concerning the segregatedmanagements.

The following may be deducted from the above:* Credit held by a Financial Instruments Business Operator
against a customer (which relates to an advance payment to acustomer for his/her purchase of securities of whom suchsecurities are subject to the segregated management)(iii) In calculating segregated customer funds for each customer, thefollowing items need to be taken into consideration (including the－ 9 －customer’s money held at the bank):- Money paid in from a customer as a result of transaction
involving the securities. As long as the purchased securities are
subject to the segregated management, the amount paid in by
the customer in advance is excluded.
- Money received by a Financial Instruments Business Operator on
behalf of a customer in connection with the sale of securities
that has not yet been paid out to the customer.
- Dividends, interest, redemption proceeds, etc. received by a
Financial Instruments Business Operator on behalf of acustomer that have not yet been paid out to the customer.
(iv) Procedures for a Financial Instruments Business Operator to
calculate the Necessary Amount of segregated customer fundevery day as sum of such funds for each customer in compliancewith the laws and regulations, etc. concerning the segregatedmanagement have been established and are being properly
implemented.
(v) In the event of any failure in connection with the customertransaction, appropriate handling of managing the segregatedcustomer fund is provided for and is consistently observed.
(3) The necessary amount as(vi) Procedures have been established and are being properly

stipulated in the laws andimplemented in order to collate the appraisal value of trust

regulations, etc.

property in the trust account for segregated customer funds withconcerning the segregatedthe Necessary Amount of segregated customer funds at the

management shall befrequency stipulated in the laws and regulations, etc. concerning

deposited in the trust

the segregated management and to ensure the Necessary Amountaccount for segregatedof the segregated customer fund is deposited at the designatedcustomers fund.

trust account of the segregated customer fund at a trust bank.
(vii) When the segregated customer trust fund is a securities trust ora blanket trust, procedures have been established and are being
appropriately implemented to confirm that the securities to be
entrusted are national government bonds or other securities
designated by the Commissioner of the Financial Services
Agency.
(viii) When the segregated customer trust fund is a securities trust ora blanket trust, it is clearly stated in the trust agreement that the
securities under custody shall not be made available for loans.
(ix) When a Financial Instruments Business Operator performs a－ 10 －

calculation on the Adjustment Calculation Record Date,
procedures have been established and are being implemented toensure that the appraisal value of the securities deposited in theaccount for segregated customer trust fund is calculated based on
the market price (value calculated based on the last pricepublished on the relevant day or one calculated in a reasonable
manner as equivalent thereto). In addition, at the time of
calculation on the Record Date, procedures have been establishedand are being implemented to confirm that the amount is not morethan the amount obtained by multiplying the market price on such
Record Date by the ratio specified by the Commissioner of the
Financial Services Agency.
(4) Any deposit and(x) With regard to any shortfall identified as result of the daily

withdrawal in the trust

calculation of the Necessary Amount of segregated customer fund,account for the segregatedprocedures have been established and are being implemented tocustomers fund shall be

confirm at least once a week that funds or securities have been

made in compliance withtransferred into the relevant trust account for the segregatedthe laws and regulations,customer fund within three (3) business days from the Adjustment

etc. concerning the

Calculation Record Date.

segregated management(xi) Regarding the termination in whole or in part of a trust contract

following the appropriate

in relation to the segregated customer trust fund, procedures haveprocedures.

been established and are being implemented to ensure that suchtermination is limited to the following cases in compliance withthe laws and regulations, etc. concerning the segregatedmanagement;- In the event that the appraisal value of the principal of the trust
property on the Adjustment Calculation Record Date exceeds
the Necessary Amount of segregated customer fund,redemption, etc. is to be made within the amount equivalent tosuch excess amount;- In the event that redemption, etc. is made within the amountequivalent to customer segregated fund pertaining to thesubscription for offering, etc. on the date of payment for suchoffering; or- In the event that redemption, etc. is made in order to transfer toanother contract of the segregated customer trust fund:(xii) A system has been established and is being properly operated sothat any deposit into or withdrawal from, the segregated customer－ 11 －

trust fund can be made accurately based on the Necessary Amountof the segregated customer fund as of the Adjustment Calculation
Record Date according to the approval procedures by anappropriately authorized officer. In addition, a system for timely,
accurate, and comprehensive recording of such deposits andwithdrawals has been established and is being properly operated.
(5) Procedures to(xiii) A system has been established and is being properly operated

periodically check theto periodically check account balances between the statements

balance of account books

obtained from the trust banks and member’s accounting bookfor segregated customers

records regarding the accounts for the segregated customer trust

fund against the balance atfund. The following are some examples of considerations:such trust bank account- Frequency of collation shall be at least weekly,

exist.

- Collation is being made by an independent department, etc. thatis not involved in the business of receiving and withdrawing
money from the segregated customer trust fund,- Any discrepancy detected as a result of the collation has been
investigated and resolved in a timely and appropriate manner,and- Collation results and details are documented and reported to a
manager.

4. Accounting and Book Keeping
Control Objectives

Key Control Points Example

4-1. Account Opening,(i) New customer account has been approved by a properly

Orders Receipt, andauthorized manager, and all necessary documentation to open such

Contract with Customers

account has been obtained and filed prior to commencement of(1) Appropriateness of thetransaction (i.e., that all

any transaction.
(ii) Except for the instance where the delivery of documents uponcustomer transactions

the conclusion of contract (transaction statement) is not required

initiated are with a real

under the relevant laws and regulations (including a delivery bycounterparty and haveelectromagnetic means. The same shall apply hereinafter), thebeen properly authorized)

relevant documents have been delivered to the customer promptly

shall be ensured.

after the execution of the contract for all transactions (including
whether the authority to omit transaction confirmation has been
granted to the sales representatives, etc.)(iii) Transaction balance statement, etc. specifying details oftransfer, balance, and other items concerned with securities andmoney have been delivered to customers periodically or at a time－ 12 －

of every transaction.
(iv) Measures are taken to prevent unauthorized issuance of thedelivery documents upon the conclusion of contract (transaction
statement), transaction balance statement, etc. (including
prevention for intentional avoidance of issuance and falsification,etc. concerned with such documents).
(v) Customer’s inquiry, complaint, etc. concerning the delivery
documents upon the conclusion of contract (transaction report),
transaction balance statement, etc. are being reported, addressed,
and resolved.
(vi) Measures are taken to detect any erroneous transaction due to anerroneous order and so forth.
(vii) The cancellation or amendment of the transaction are being
made by a properly authorized manager.
(2) All transactions shall be(viii) All orders received from customers are being entered into

entered, processed, andorder slips and other books, approved by an officer with

reported.

appropriate authority if necessary, and entered into the transaction
processing system without any omission.
(ix) Measures are taken to ensure that the contract note (execution
report) is properly allocated to each transaction.
(x) Measures are taken to ensure that all major transaction data suchas the customer name, account number, date and time of order
receipt and execution, product name, quantity, price, selling or
buying, and others are entered without omission.

(3) Any contract for the(xi) Order slips and other books are being verified against thetransactions shall becontract data. In the event of any discrepancy identified in theaccurately entered,collation, it is being promptly investigated and resolved.

processed, and reported(xii) Measures are taken to prevent any invalid account number

with respect to major(other than those registered under proper authorization), issue

trading information, suchcode, trading date, etc. from being accepted on the system.

as the principal transaction(xiii) Transactions are being confirmed with all concerned parties

or customer transaction,

promptly after the execution. In the event of any discrepancy

customer name, accountidentified in the collation, it is being promptly investigated andnumber, dates and times ofresolved.

the orders received andcontracted, product name,quantity, price, currency,
amount, buy or sell, and－ 13 －

others.
4-2. Settlement ofTransaction with Customer(1) To ensure that any
transfer of the customers’(i) Any transfer of securities and money is being made only
according to valid transactions or to proper customer instructions
and has been approved by a properly authorized manager.
(ii) Rules for division of duties for the following functions have been

securities or money isprepared and are being properly complied with.

made solely in connection- Execution of tradewith a valid transaction or- Trade registration into bookunder the proper- Trade confirmation

instruction from the- Transaction settlement (money and securities)

relevant customer with- Balance checkproper authorization.
(2) To ensure that the(iii) The balance of securities under custody of a third-party

authorized transfer oforganization has been collated periodically against the records of

securities or money hassuch third party. In the event of any discrepancy identified in the

been comprehensively

collation, it is being promptly investigated and resolved. (Refer toaccounted for the purpose

2-2, (4)(vii))of accounting and(iv) The balance of the securities recorded in the transfer accountaccurately recorded in thebook pursuant to the Transfer Act has been collated periodicallyappropriate accounting

against the records of such third party. In the event of any

item with respect to major

discrepancy identified in the collation, it is being promptly

trade information, such as

investigated and resolved. (Refer to 4-2, (2))

the amount, quantity,(v) The scheduled settlement amount of money and securities in the

product name, currency,transaction processing system is reconciled with the actual

customer name, dates,

settlement amount in a timely manner (e.g., collation with thedelivery information, andactual settlement amount in case of automatic slip issuance based

others.

on such scheduled settlement amount on the settlement date). In
the event of any discrepancy identified in the collation, it is being
promptly investigated and resolved.
(vi) Measures are taken to promptly discover, investigate and resolve
any unidentified deposit, etc.
(vii) Measures are taken to ensure that matters caused by any failure
or securities in transit are addressed in a timely manner.
(viii) Bank account balance is verified on a daily basis by anindependent department, etc., and any discrepancy discovered is
promptly investigated and addressed.

4-3. Master Data and(i) Measures are taken to ensure that any modification to the Master－ 14 －Cumulative Data
(1) To ensure that any change

Data has been approved by an appropriately authorized officer.
(ii) Appropriate person in charge shall check that any modification

to the master data

to the Master Data has been accurately and thoroughly made and(customer data such asrecorded.

customer name, accountnumber, address,(iii) A backup system has been developed in case there is an error in
the system controlling the Master Data.

settlement account,product data, etc.) has
been approved andcompletely and accurately
entered into.
(2) To ensure that any input(iv) Measures are taken to ensure that the securities register per

data regarding trading

location of safekeeping and other book accounts have beentransactions, receipts, andproperly updated with respect to the respective amounts (both for

payments of securities andsecurities and money) at each time of commencement, contract,money are accurately

and settlement concerned with trading.

recorded in the databaseincluding the customer’s
account ledger, the(v) Measures are taken to prevent or to detect any false entry in theaccount.
(vi) Daily transaction records are collated in a timely manner

securities register under

between the securities register per location of safekeeping andcustody, the securities

other account books. In the event of any discrepancy identified inregister per location of

the collation, it is being promptly investigated and resolved.

custody (register on
securities held by the
Financial Instruments
Business Operator for eachlocation of custody), etc.
(3) To ensure that any(vii) Balances of the customers’ money and securities are being

accumulated data on

collated among the relevant books. In the event of any

trading, transfer of

discrepancy identified in the collation, it is being promptly

securities and money, andinvestigated and resolved.

any modification thereof(viii) Balance of products held is being collated among the relevant

are consistent with thebooks. In particular, with respect to the balance concerned with

relevant items of securities

the proprietary holding of product, the balance based on theregister per location ofdelivery date is collated against that based on the contract date.

custody and other related
accounting books.
4-4. Restrictions on Access(i) Measures are taken to ensure that a delivery instruction (which－ 15 －

to Assets and Records

specifies the date of delivery, issue name, quantity, destination,(1) To ensure that only

approval stamp, etc.) is prepared, and that the securities registerauthorized employees shallper location of safekeeping and other relevant books are updated

have access to assets andbased on such instruction concerned with any transfer ofaccounting book records,

securities.

including master data and(ii) Measures are taken to ensure that any revision to the books andsettlement data for money

records is being made by authorized departments and employees

and securities.

to enable proper check and balance function.
(iii) Steps have been taken to ensure that any amendments to thebooks and records have been approved.
(iv) Measures are taken to ensure that only authorized personnel
have access to the Master Data. Measures are also taken to prevent
any unauthorized access to the Master Data.

－ 16 －