(Translation)
This is an unofficial translation of the Statement of Operational Procedures for JapaneseBanks’ Payment Clearing Network. Only the original Japanese text has legal effect, andthis translation is to be used solely as a reference material to aid in the understandingof the Japanese text.
Statement of Operational Procedures for Japanese Banks’ Payment Clearing Network
Chapter 1 General Provisions
Article 1(Purpose)

Pursuant to the provisions of Article 71 of the “Payment Services Act” (Act No. 59 of
2009; hereinafter referred to as the “Act”), this Statement of Operational Proceduressets forth the basic matters on how Japanese Banks’ Payment Clearing Network(hereinafter referred to as the “Association”) shall engage in the Funds Clearing
Business (meaning the funds clearing business as defined in Article 2, Paragraph (5)of the Act; the same to apply hereinafter) and other business operations (hereinafterreferred to as the “Funds Clearing Business, etc.”) in operating a domestic funds
transfer system.
Article 2(Domestic Funds Transfer System)(1) The Association shall engage in fair and appropriate operation and management of asystem for domestic exchange transactions between the Member Banks stipulated in
Article 5 (hereinafter referred to as the “Funds Transfer Transactions”) and forclearing, etc. of the credits and debts associated with such transactions (Domestic
Funds Transfer System; hereinafter referred to as the “Funds Transfer System”).
(2) The Association shall engage in operation and management of the clearing, etc. of
costs (hereinafter referred to as “Domestic Funds Transfer System Operational Costs”)
paid by sender banks (entrusting bank in the case of collection) to receiving banks(entrusted bank in the case of collection) in Funds Transfer Transactions.
(3) The Domestic Funds Transfer System Operational Costs in the preceding paragraphshall appropriately reflect the expenses, etc. required for the handling of Funds
Transfer Transactions as a receiving bank (entrusted bank in the case of collection),be at a reasonable level under normal social conventions for users of Funds Transfer
Transactions, and be determined with the approval of the board of directors.
(4) The Association shall engage in operation and management of the Zengin Data

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Telecommunications System (hereinafter referred to as the “Zengin System”) and the
Zengin EDI system.
(5) The Zengin System referred to in the preceding Paragraph is composed of the system
handling the Funds Transfer Transactions during core time for which hours are
separately stipulated by the Association (hereinafter referred to as the “Core Time
System”), system handling the Funds Transfer Transactions during more time forwhich hours are separately stipulated by the Association (hereinafter referred to as
the “More Time System”), information system and other systems.
(6) The Association shall set forth the handling of Funds Transfer Transactions in theRules on Operation of Funds Transfer System, the handling of clearing of the credits
and debts associated with such transactions in this Statement of Operational
Procedures, the specific handling of the operation of the Zengin System in the Rules
on Use of Zengin System and the specific handling of the operation of the Zengin EDI
System in the Rules on Use of Zengin EDI System, as well as in the respective related
provisions.
Article 3(Transactions Subject to Clearing)

The transactions from which debts arise that are subject to the Association’s Funds
Clearing Business (hereinafter referred to as the “Transactions Subject to Clearing”)
shall be the Funds Transfer Transactions stipulated in the preceding Article that used
the Zengin System, excluding transactions that are separately stipulated as those thatare not accompanied by funds clearing; provided, however, that Funds Transfer
Transactions between the Financial Institutions Outsourcing Settlement Agency(meaning the financial institutions outsourcing settlement agency as defined in Article
5; the same to apply hereinafter) and the Financial Institutions Entrusted with
Settlement Agency (meaning the Clearing Participants (i.e. the clearing participants
as defined in Article 5) entrusted with settlement agency from said Financial
Institutions Outsourcing Settlement Agency; the same to apply hereinafter) andFunds Transfer Transactions between the Financial Institutions Outsourcing
Settlement Agency with the same the Financial Institutions Entrusted with
Settlement Agency shall not be Transactions Subject to Clearing.
Article 4(Holidays, etc.)(1) The holidays of the Association shall be the days listed as follows:(i) Holidays set forth in the Act on National Holidays (Act No. 178 of 1948);(ii) Days from December 31 to January 3 of the following year (except for the days-2-

listed in the preceding Item); and(iii) Saturdays and Sundays.
(2) Notwithstanding the provisions of the preceding Paragraph, the Association may also
execute the necessary operations on holidays.
Chapter 2 Member Banks
Section 1 General Rules
Article 5(Type of Member Banks)

Member Banks shall refer to financial institutions (including the funds transfer
service providers stipulated in Article 2, Paragraph (3) of the Act; the same to apply
hereinafter) that have acquired the qualification stipulated in Article 9 and that use
the Funds Transfer System, and shall comprise of the following two types.
(i)

Clearing Participants:
Financial institutions performing funds transfer settlement with the Association
via current accounts at the Bank of Japan(ii)

Financial Institutions Outsourcing Settlement Agency:
Financial institutions outsourcing funds transfer settlement to Clearing
Participants (Clearing Participants to which funds transfer settlement is
outsourced shall be limited to one per Financial Institution Outsourcing
Settlement Agency)

Article 6(Associate Members)(1) In addition to the Member Banks, the Association may, subject to approval of theboard of directors, approve the participation of associate members as those that do not
use the Funds Transfer System but use the Zengin System.
(2) The Bank of Japan shall participate as an associate member.
Section 2 Member Banks
Article 7(Requirements for Membership Qualification)

Parties eligible to acquire the qualification to become a Member Bank (hereinafterreferred to as the “Membership Qualification”) or succeed to such shall be limited toparties that fully correspond to each of the following items.
(i)

Deposit-taking financial institutions or funds transfer service providers engaging-3-

in domestic funds transfer operations as banking, etc. businesses(ii)

Financial institutions having a separately prescribed financial foundation andsystemArticle 8(Application for Acquisition of Membership Qualification)(1) A party seeking acquisition of the Membership Qualification must file an application
with the Association pursuant to the provisions stipulated by the Association.
(2) A party, not satisfying the requirements of the preceding Article at the time of
application but which is expected to satisfy those requirements by the membershipdate stipulated in Paragraph (2) of the following Article, may have another Clearing
Participant file an application to acquire the Membership Qualification on its behalf.
In this case, such Clearing Participant shall submit the document or electronic record
separately stipulated by the Association.
Article 9(Acquisition of Membership Qualification)(1) A party that has filed the application stipulated in the preceding Article shall acquire
Membership Qualification upon completion of the following procedures:(i)Approval of the board of directors;(ii)

Payment of the joining fee in accordance with the separately-stipulated criteria;and(iii) Submission of the separately-stipulated document or electronic record.
(2) The approval of Item (i) of the preceding Paragraph shall be made by designating adate on which to start Funds Transfer Transactions as a Member Bank (hereinafterreferred to as the “Membership Date”).
(3) The board of directors may attach conditions in providing the approval in Paragraph(1), Item (i).
Article 10(Notice of New Member Bank)

In the event of acquisition of the Membership Qualification provided in the preceding
Article, the Association shall notify all Member Banks and the Bank of Japan of such
new Member Bank’s name, representative, location and Membership Date.
Article 11(Succession of Membership Qualification)(1) If a Member Bank falls under any of the following Items, the financial institution
stipulated in each concerned Item may succeed to such Member Bank’s Membership
Qualification; provided, however, that a Member Bank may not succeed its-4-Membership Qualification to more than one financial institution.
(i)

In the case of merger with another Member Bank resulting in the establishmentof a new financial institution, the financial institution established as a result of
the merger;(ii)

In the case of merger with a financial institution that is not a Member Bank
(hereinafter referred to as the “Non-Member Bank”) resulting in theestablishment of a new financial institution, the financial institution established
as a result of the merger;(iii) In the case of merger with a Non-Member Bank resulting in the Non-Member
Bank surviving the merger, the financial institution surviving the merger;(iv) In the case of a split or transfer of operations or business resulting in succession
or assignment of operations or business in whole to one other Non-Member Bank
(provided, however, that a newly-established financial institution in this Item or
the following Item shall be included), the financial institution succeeding to or
receiving the operations or business in whole;(v)

In the case of a split or assignment of operations resulting in the succession orassignment of operations in part to a Non-Member Bank that is the subsidiary, a
Non-Member Bank that is the parent company or a Non-Member Bank that isthe parent company’s subsidiary of the concerned Member Bank, the financial
institution succeeding or receiving the operations in part;(vi) In the case of an assignment of operations, etc., stipulated in the Deposit
Insurance Act resulting in the succession of domestic funds transfer business
operations to another financial institution, the financial institution succeeding to
the domestic funds transfer business operations pursuant to the provisions of the
Deposit Insurance Act; or(vii) In other cases approved by the board of directors, a financial institution approvedby the board of directors.
(2) In the event of succession of the Membership Qualification stipulated in the preceding
Paragraph, the Association shall notify all Member Banks and the Bank of Japan ofsuch succeeding Member Bank’s name, representative, location and Membership Date.
Article 12(Joining Fee)

A new member of the Funds Transfer System must pay the joining fee in accordancewith the separately-stipulated criteria.
Article 13(Contribution to Expenses)-5-Member Banks must share the expenses required for operating the Association inaccordance with the separately-stipulated criteria.
Article 14(Return of Joining Fee, etc.)

The joining fee and contribution to expenses paid in as stipulated in the preceding two
Articles shall not be returned.
Article 15(Reporting)(1) In addition to the case of a Member Bank falling under any of Items (i) through (iv)of Article 16, Paragraph (2), if a Member Bank is to fall under other cases stipulatedby the Association, such Member Bank must report to the Association such content inadvance pursuant to the provisions stipulated by the Association; provided, however,
that, if the Member Bank is not able to report in advance due to unavoidable
circumstances, the Member Bank shall report subsequently without delay.
(2) In addition to the preceding paragraph, for the purpose of confirming the status of a
Member Bank’s compliance with this Statement of Operational Procedures or
confirming that the case does not fall under or has no risk of falling under thecircumstances prescribed in each of the items in Article 16, Paragraph (2) or each of
the items in Article 19, or for the sake of stable operation of the Funds Transfer System,
the Association may periodically request the Member Bank to report and submit
materials to the extent necessary.
Article 15-2

(Notification, etc.)

As for funds transfer service providers who are members as Financial Institutions
Outsourcing Settlement Agency, the provisions of Article 31, Paragraphs (1) through(7) and Article 32 shall apply mutatis mutandis. In this case, “Clearing Participants”
shall be deemed to be replaced with “funds transfer service providers who are members
as Financial Institutions Outsourcing Settlement Agency.”
Article 16(Loss of Membership Qualification)(1) Member Banks may lose Membership Qualification by obtaining approval of theboard of directors.
(2) In addition to the preceding Paragraph, if a Member Bank falls under any of thefollowing Items, such Member Bank shall lose its Membership Qualification:(i)Commencement of bankruptcy proceedings (including equivalent proceedings
filed overseas; the same to apply hereinafter);

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(ii)

Dissolution;(iii) No longer satisfying the requirements stated in Article 7, Item (i);(iv) Succession of Membership Qualification by another financial institution inaccordance with Article 11; or(v)

Expulsion as stipulated in Article 19.

Article 17(Application for Loss of Membership Qualification)

A Member Bank seeking loss of Membership Qualification in accordance with theprovisions of Paragraph (1) of the preceding Article must file an application for loss ofMembership Qualification pursuant to the provisions stipulated by the Association.
Article 18(Approval of Loss of Membership Qualification)

Approval of loss of Membership Qualification shall take place by the Association
designating a certain future date and the Membership Qualification concerned shallbe lost as of that date.
Article 19(Resolution on Expulsion)

If a Member Bank falls under any of the following Items, such Member Bank may be
expelled from the Funds Transfer System by resolution of the board of directors. In
this case, the Member Bank must be provided with an opportunity for providing an
explanation prior to the resolution.
(i)

If a Member Bank fails to pay contribution to expenses;(ii)

If a Member Bank engages in an act that undermines the credibility of the
Association or other Member Banks;(iii) If there is a fact whereby a Member Bank’s operations are found to be in a criticalcondition; or(iv) If a substantial period of time has passed since measures to temporarily suspend
use of the Funds Transfer System stipulated in Article 21 were imposed on a
Member Bank.
Article 20(Notice of Loss of Membership Qualification)

If Membership Qualification is lost in accordance with Article 16, Paragraph (2) or if
loss of Membership Qualification is approved in accordance with Article 18, theAssociation shall immediately notify the party that has lost Membership Qualification,
all Member Banks and the Bank of Japan to that effect.

-7-Article 21(Temporary Suspension of Use of the Funds Transfer System)(1) If a Member Bank temporarily suspends use of the Funds Transfer System due totemporary closure, etc., such Member Bank shall immediately submit a notification tothat effect to the Association pursuant to the provisions stipulated by the Association.
In this case, if such Member Bank is unable to submit such notification, the Association
may treat such notification as having been submitted by way of verifying thenotification/order, etc., pertaining to the temporary closure, etc.
(2) In addition to Article 38 and Article 56, Paragraph (6), if a Member Bank falls under
any of the grounds separately stipulated by the Association, the Association may
impose measures on such Member Bank to temporarily suspend use of the Funds
Transfer System.
(3) With regard to Member Banks that have submitted a notification on temporary
suspension of the Funds Transfer System in accordance with Paragraph (1) (including
Member Banks treated as having submitted such notification) or Member Banks onwhich the Association has imposed measures on temporary suspension in accordancewith the preceding Paragraph, the Association shall temporarily suspend any Funds
Transfer Transactions that such Member Banks have with other Member Banks andimmediately notify all Member Banks and the Bank of Japan to that effect.
Article 22(Approval of Resumption of Use from Temporarily Suspended Use of
the Funds Transfer System)(1) If a Member Bank that has temporarily suspended use of the Funds Transfer System
resumes use of the Funds Transfer System, such Member Bank shall submit a
notification to that effect to the Association and obtain its approval.
(2) If such Member Bank has been approved to resume the use of the Funds Transfer
System, the Association shall immediately notify all Member Banks and the Bank ofJapan to that effect.
Section 3 Clearing Participants
Article 23(Application for Acquisition of Clearing Qualification)

A party seeking acquisition of the qualification to participate in the Funds Transfer
System as a Clearing Participant (hereinafter referred to as the “Clearing
Qualification”), including the Financial Institution Outsourcing Settlement Agency
seeking acquisition of the Clearing Qualification, must file an application with the
Association pursuant to the provisions stipulated by the Association.

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Article 24(Acquisition of Clearing Qualification)(1) A party that has filed the application provided in the preceding Article shall acquire
Clearing Qualification upon completion of the following procedures; provided, however,
that, in this case, the foregoing shall be subject to the condition that Membership
Qualification has already been acquired or Membership Qualification is acquired
simultaneously with the Clearing Qualification.
(i)

Approval of the board of directors
Provided, however, that this shall be subject to approval of current accounttransactions with the Bank of Japan at the branch performing funds transfer
settlement;(ii)

Payment of the joining fee in accordance with the separately-stipulated criteria;and(iii) Submission of a written pledge to comply with the statement of operational
procedures as a Clearing Participant.
(2) The approval referred to in the preceding Paragraph shall be made by designating adate on which to start transactions under the Funds Transfer System as a Clearing
Participant (hereinafter referred to as the “Clearing Transaction Start Date”).
(3) In the event of approval of the acquisition of the Clearing Qualification pursuant to
the provisions of Paragraph (1), the Association shall notify all Member Banks and the
Bank of Japan of the relevant party’s name, representative, location and Clearing
Transaction Start Date.
(4) The notice to the Bank of Japan referred to in the preceding Paragraph shall be madeby the time separately stipulated by the Association and the Bank of Japan.
(5) When providing the approval in Paragraph 1, Item (i), the board of directors may
attach conditions, in addition to the conditions prescribed in the proviso to the said
paragraph and the proviso to the said item.
Article 25(Succession of Clearing Qualification)(1) The provisions of Article 11 shall apply mutatis mutandis with respect to successionof a Clearing Participant’s Clearing Qualification.
(2) The Association shall notify the Bank of Japan of the Clearing Transaction Start Datefor the party succeeding to the Clearing Qualification by the time separately stipulatedby the Association and the Bank of Japan.
Article 26(Clearing Participant Representative)-9-

(1) A Clearing Participant shall appoint one person appropriate to represent it at the
Association, which it shall appoint from among its officers with authority ofrepresentation (where the Clearing Participant is an entity established under the laws
and regulations of a foreign state, the person serving as representative in Japan, anda position that is equal to or higher than an officer), as Clearing Participant
representative and must notify the Association in advance pursuant to the provisions
stipulated by the Association.
(2) For relationships with Clearing Participants and with the Association, only the
Clearing Participant representative shall represent such Clearing Participant.

Article 27(Person in Charge of Funds Clearing Business Operations)

A Clearing Participant shall appoint one person in charge of Funds Clearing Business
Operations, which it shall appoint from among its officers or employees, to oversee
business operations pertaining to the Funds Clearing Business, etc., with the
Association pursuant to this Statement of Operational Procedures and must notify the
Association thereof pursuant to the provisions stipulated by the Association.
Article 28(Cooperative Relationship or Controlling Relationship with Officers or
Others)(1) If the Association recognizes the cooperative relationship or controlling relationshipwith officers of a Clearing Participant or others as being inappropriate in light of theoperation of the Funds Clearing Business, etc., of the Association, the Association shallhave the capacity to demand, with the reasons thereof presented, that change be madeafter providing such Clearing Participant with an opportunity for providing
explanations; provided, however, that if the Clearing Participant has submitted awritten statement, the opportunity for providing explanations may be substituted bysuch submission.
(2) If a Clearing Participant refuses the opportunity for providing explanations referred
to in the preceding Paragraph without a justifiable reason, the Association shall havethe capacity to demand change as stipulated in the preceding Paragraph without theopportunity for providing explanations.
(3) If a Clearing Participant considers the demand for change referred to in Paragraph(1) to be unreasonable, the Clearing Participant may claim an objection in writing orin an electronic record, with the reasons thereof presented therein, against the
Association within ten days of the date on which notice of the demand for change was- 10 -

received.
(4) If the Association receives the objection claim under the preceding Paragraph, theAssociation shall hold a meeting of the board of directors without delay.
(5) If the meeting of the board of directors referred to in the preceding Paragraphrecognizes change or cancellation of the demand for change referred to in Paragraph(1) as being appropriate, the Association shall immediately change or cancel thedemand for change stipulated in said Paragraph.
Article 29(Prohibition on Assignment of Rights, etc.)

A Clearing Participant may not assign to any party, make arrangements for
assignment, or pledge as collateral the rights or claims against the Association under
this Statement of Operational Procedures.
Article 30(Indemnification)

Even if a Clearing Participant incurs any damage concerning the Funds Clearing
Business, etc., with the Association, the Association shall not be liable to provide
compensation for such damage unless it is found to have been willful or grossnegligence on the part of the Association.
Article 31(Matters to be Notified)(1) If a Clearing Participant intends to carry out any of the following acts, the Clearing
Participant must notify the Association in advance pursuant to the provisions
stipulated by the Association.
(i)

Abolishment of business (limited to those pertaining to Funds Transfer
Transactions; the same to apply hereinafter);(ii)

Assignment of business;(iii) Merger in the event of merger with another party, resulting in it surviving themerger;(iv) Succession of business from another entity due to split;(v)

Acquisition of business;(vi) Change of trade name or name (including the trade name or name in English; thesame to apply hereinafter);(vii) Change of location of the head office or principal office; or(viii) Change of Clearing Participant representative or person in charge of Funds
Clearing Business Operations.
(2) In the event of attachment or provisional attachment of credits that a Clearing- 11 -

Participant has of another Clearing Participant or credits that a Clearing Participantacquires from the Association through the assumption of debts stipulated in Article 49,
Paragraph (1) or in the event of suspension of payments or petition for commencementof bankruptcy proceedings, rehabilitation proceedings or reorganization proceedings(each including equivalent proceedings filed overseas) filed with respect to a Clearing
Participant, the Clearing Participant must immediately notify the Association of thedetails thereof pursuant to the provisions stipulated by the Association.
Article 32(Submission of Materials)

If the Association considers it necessary for an investigation of a Clearing Participant’s
status of compliance with this Statement of Operational Procedures or in other cases
in which the Association considers it necessary in light of operation of the Funds
Clearing Business, etc., of the Association, the Association may demand, with thereasons thereof presented, that the Clearing Participant submit reports or materialsof the Clearing Participant that would serve as reference concerning the business orassets pertaining to the Funds Clearing Business, etc., of the Association.
Article 33(Loss of Clearing Qualification)(1) Clearing Participants may lose Clearing Qualification by obtaining approval of the
Association.
(2) In addition to the preceding Paragraph, if a Clearing Participant falls under any of
the following Items, such Clearing Participant shall lose Clearing Qualification.
Furthermore, in the case of Item (i), Membership Qualification is also simultaneously
lost.
(i) Non-payment of the amount of funds transfer settlement (meaning the funds
transfer settlement amount stipulated in Article 45; the same to apply
hereinafter)
Provided, however, that, if the Association considers that there are special
circumstances, the Association may keep the Clearing Qualification andMembership Qualification from being lost.
(ii)

Cancellation of current account transactions with the Bank of Japan at thebranch performing funds transfer settlement(iii) Loss of Membership Qualification stipulated in Article 16(3) The “special circumstances” referred to in Item (i) of the preceding Paragraph include
the following cases:(i)

In the case that the Association has verified, based on a request from a Clearing- 12 -

Participant, that a Clearing Participant’s non-payment of the funds transfer
settlement amount is temporary, due to system failure or disaster or otheraccidental event; and(ii)

In the case that a Clearing Participant has received an “order for management ofbusiness and assets by a financial administrator” stipulated in Article 74 of the
Deposit Insurance Act and a petition for commencement of civil rehabilitation
proceedings has been filed, and such Clearing Participant has filed theseparately-stipulated continuous participation application with the Association.

(4) If a Clearing Participant, which did not lose Clearing Qualification because it fell
under the Items of the preceding Paragraph, still does not pay the funds transfer
settlement amount even after it no longer falls under the Items of the preceding
Paragraph, such Clearing Participant shall lose Clearing Qualification andMembership Qualification in accordance with the main clause of Paragraph (2), Item(i).
Article 34(Application for Loss of Clearing Qualification)

A Clearing Participant seeking loss of Clearing Qualification in accordance with theprovisions of Paragraph (1) of the preceding Article (including when it seeks to becomea Financial Institution Outsourcing Settlement Agency) must file an application forloss of Clearing Qualification pursuant to the provisions stipulated by the Association.
Article 35(Approval of Loss of Clearing Qualification)

Approval of loss of Clearing Qualification shall take place by the Association
designating a certain future date, and the concerned Clearing Qualification shall belost on that date.
Article 36(Notice of Loss of Clearing Qualification)

If Clearing Qualification is lost in accordance with Article 33, Paragraph (2) or if lossof Clearing Qualification is approved in accordance with the preceding Article, theAssociation shall immediately notify the concerned party that has lost Clearing
Qualification, all Member Banks and the Bank of Japan to that effect.
Article 37(Handling of Unperformed Debts of Parties that have Lost Clearing
Qualification)

If Clearing Qualification is lost in accordance with the provision of Article 33,
Paragraph (2), the Association shall still deem such party a Clearing Participant for- 13 -

settlement or restructuring of said party’s unperformed debts or otherwise to theextent that the Association considers it necessary.
Section 4 Measures, etc., on Member Banks
Article 38(Measures Pertaining to Violation of Statement of Operational
Procedures, etc., by Member Banks)(1) If a Member Bank falls under any of the following Items, the Association may, withthe reasons thereof presented, temporarily suspend use of the Funds Transfer Systemstipulated in Article 21 or impose measures that the Association otherwise considers
necessary and appropriate after providing such Member Bank with an opportunity forproviding explanations.
(i)

In the event of violation of this Statement of Operational Procedures (including
the conditions attached based on Article 9, Paragraph (3), the proviso to Article
24, Paragraph (1), the proviso to the said paragraph, Item (i), or Article 24,
Paragraph (5));(ii)

In the event of failure to report pursuant to the provisions of Article 15 or to notify
pursuant to the provisions of Article 31 in the case of a Clearing Participant, orin the event of a false report or notification;(iii) In the event of failure to respond to the demand for change of the cooperative
relationship or controlling relationship with officers or others pursuant to theprovisions of Article 28;(iv) In the event of the majority of voting rights of all shareholders (excluding voting
rights with respect to shares where the voting rights cannot be exercised for all
matters that are to be voted on at a general meeting of shareholders; including
voting rights with respect to shares deemed to have voting rights pursuant to theprovisions of Article 879, Paragraph (3) of the Companies Act (Act No. 86 of 2005)),
or voting rights pertaining to contributions becoming held by parties that the
Association recognizes as being inappropriate in light of the operation of theFunds Clearing Business of the Association; or(v) In the event that any person, regardless of whether they are consultants, advisors
or any other person with any title, who has control over a Member Bank that isequal to or higher than that of the officers, is found to be inappropriate in lightof the operation of the Funds Clearing Business, etc., of the Association.
(2) If a Member Bank becomes, or is likely to become, unable to pay, the Association may
temporarily suspend use of the Funds Transfer System stipulated in Article 21 until- 14 -

the reasons therefor no longer exist after providing such Member Bank with anopportunity for providing explanations(3) If a Member Bank that is a Clearing Participant intends to carry out any of the actsof Items (i) through (vi) of Article 31 (limited to succession of business in whole in thecase of Item (v) and assignment of business in whole in the case of Item (vi) of Article31) and does not file an application for loss of Clearing Qualification, the Association
may temporarily suspend use of the Funds Transfer System stipulated in Article 21
after providing such Clearing Participant with an opportunity for providing
explanations.
Article 39(Lifting of Measures on Suspension of Funds Transfer Transactions,etc.)(1) If the Association has temporarily suspended use of the Funds Transfer Systemstipulated in Article 21 without setting a period pursuant to the provisions of thepreceding Article, the Member Bank subject to transaction suspension may file anapplication for the suspension to be lifted with a statement attached to it when thereasons for the suspension no longer exist.
(2) If the Association recognizes the lifting of the suspension based on the application of
the preceding Paragraph as being appropriate, the Association shall approve theapplication by designating a certain future date. In this case, the lifting of thesuspension shall take effect on that date.
(3) If the Member Bank referred to in Paragraph (1) does not obtain the approval of thepreceding Paragraph within one year of the date of the suspension referred to in
Paragraph (1), the Association may terminate the Member Bank’s Membership
Qualification (Clearing Qualification and Membership Qualification in the case of aClearing Participant; the same to apply hereinafter) by resolution of the board of
directors.
Article 40(Claim of Objection Against Measures, etc.)

The proviso of Paragraph (1) and provisions of Paragraph (2) of Article 28 shall apply
mutatis mutandis to the opportunity for providing explanations referred to in Article
38, and the provisions from Paragraphs (3) through (5) of Article 28 shall apply mutatis
mutandis to the measures referred to in Article 38.
Article 41(Notice of Measures)

If measures have been imposed on Member Banks in accordance with Article 38 and- 15 -

Article 39, Paragraph (3), the Association shall immediately notify all Member Banksand the Bank of Japan to that effect.
Article 42(Recommendations to Member Banks)(1) If the Association considers the status of business operations and assets of a Member
Bank to be inappropriate in light of the operation of the Funds Clearing Business, etc.,of the Association, the Association may recommend such Member Bank to takeadequate measures.
(2) If the Association considers it necessary in the event of the recommendation of thepreceding Paragraph, the Association may request a report of the responses taken
thereto from the Member Bank.
Chapter 3 Funds Transfer Settlement
Section 1 Procedures of Funds Transfer Settlement
Article 43(Settlement Account and Flagship Branch Account)(1) Funds transfer settlement is performed between the current account under the nameof the Association at the Bank of Japan Head Office (hereinafter referred to as the“Settlement Account”) and the current account of the branch of the Clearing
Participant that has been approved by the Bank of Japan (hereinafter referred to as
the “Flagship Branch”) at the Bank of Japan Head Office or Branch designated by the
Bank of Japan (hereinafter referred to as the “Settlement Branch”) (hereinafterreferred to as the “Flagship Branch Account”).
(2) Settlement Branches and Flagship Branches shall be limited to one branch each per
Clearing Participant.
Article 44(FundsTransfer

Lending/BorrowingofFinancial

Institution

Outsourcing Settlement Agency)
Funds transfer lending/borrowing of a Financial Institution Outsourcing Settlement
Agency shall be settled as funds transfer lending/borrowing of such financial
institution’s Financial Institution Entrusted with Settlement Agency.
Article 45(Calculation of Funds Transfer Settlement Amount)(1) Calculation of the funds transfer settlement amount for each Clearing Participant
shall be, in principle, performed by the Association using the Zengin System.
(2) The funds transfer settlement amount on one business day when the funds transfer- 16 -

settlement of the preceding Paragraph is performed (hereinafter referred to as“Settlement Date”) shall be the amount of difference between the total amount of
all credits in the following Items acquired against one Clearing Participant by the
Association and the total amount of all debts in the following Items to such
Clearing Participant assumed by the Association.
(i)

Credits acquired and debts assumed on the Settlement Date by the
Association in accordance with provisions of Article 49, Paragraphs (1) and
(2)

(ii)

Credits acquired and debts assumed by the Association in accordance with
provisions of Article 49, Paragraphs (1) and (3) from the point in time when
the communication on the More Time System starts on the business day prior
to the Settlement Date to the end of such communication on More Time
System on the Settlement Date

Article 46(Notice to Clearing Participants)

After calculation of the funds transfer settlement amount, the Association shall in
principle promptly notify the funds transfer settlement amount for each Clearing
Participant to the Clearing Participant using the Zengin System.
Article 47(Notice to the Bank of Japan)(1) After the notice stipulated in the preceding Article is made, the Association shallpromptly notify the Bank of Japan of the funds transfer settlement amount for each
Clearing Participant and for each Clearing Branch.
(2) The notice referred to in the preceding Paragraph shall be made via a separatelystipulated form of communication using the Zengin System in principle; provided,
however, that the notice shall be made via a method separately stipulated by the
Association and the Bank of Japan if the notice cannot be made using the Zengin
System or if both the Bank of Japan and the Association find it appropriate.
Article 48(Funds Transfer Settlement)(1) Funds transfer settlement shall be performed in the following manner: Starting at
4:15 p.m. on the Settlement Date based on the notice made in accordance with thepreceding Article (if the Bank of Japan has designated a different time, then it shallbe that time; hereinafter referred to as the “Settlement Start Time”), the amountequivalent to the funds transfer settlement amount is sequentially withdrawn fromthe Flagship Branch Account of the Clearing Participant that is to pay the funds- 17 -

transfer settlement amount and this is deposited into the Settlement Account and,after all deposits to the Settlement Account are completed, the amount equivalent to
the funds transfer settlement amount of the Clearing Participant that is to receive thefunds transfer settlement amount is withdrawn from the Settlement Account and thisis sequentially deposited into the Flagship Branch Account of the Clearing Participantthat is to receive the funds transfer settlement amount; provided, however, that, if
there are circumstances that make deposit or withdrawal difficult, the funds transfer
settlement shall be performed without delay once such circumstances end. In thiscase, the Association shall not pay or charge interest.
(2) The Clearing Participant that is to pay the funds transfer settlement amount to the
Association shall designate the amount of withdrawal funds in the Flagship Branch
Account at the Settlement Start Time on the Settlement Date so that the payment ofsuch funds transfer settlement amount is facilitated.
(3) The method of handling cases of delay in settlement due to Zengin System failure,
the arising of settlement default banks, etc., shall be decided by the Association upon
consultation with the Bank of Japan and Clearing Participants shall abide by thatdecision.
(4) If any funds transfer settlement amount discrepancies, etc., arise, the Clearing
Participant shall promptly inquire with the related financial institution to that effectand mutually resolve the same.
Section 2 Assumption of Debts and Acquisition of Credits
Article 49(Assumption of Debts and Acquisition of Credits)(1) With regard to Transactions Subject to Clearing, the Association shall assume thedebts that a Clearing Participant owes to another Clearing Participant whereby the
Clearing Participant is discharged from such debts and simultaneously acquire thecredits corresponding to such debts from the Clearing Participant that is discharged
from such debts.
(2) The point in time of the arising of debts, point in time of assumption of debts by the
Association and point in time of acquisition of credits by the Association stipulated in
the preceding Paragraph shall be the point in time stipulated in the following Items
depending on the Settlement Date of Transactions Subject to Clearing.
(i)

On that day: At the point in time when the notice telegram concerning thetransaction is effectively received by the Zengin System(ii)

On the next business day or later: At the point in time when the communication- 18 -

on the Core Time System starts on the Settlement Date
(3) Notwithstanding the provisions of the preceding Paragraph, the point in time of thearising of debts, the assumption of debts and the acquisition of credits by the
Association stipulated in Paragraph 1 shall be the point in time when the noticetelegram concerning the transaction is effectively received by the More Time System
in regard to the Funds Transfer Transactions using the More Time System.
(4) In the event of attachment or provisional attachment of credits that a Clearing
Participant has of another Clearing Participant or credits that a Clearing Participantacquires from the Association through assumption of debts stipulated in Paragraph(1) concerning Funds Transfer Transactions using the Zengin System, or in the eventof suspension of payments or petition for commencement of bankruptcy proceedings,
rehabilitation proceedings or reorganization proceedings (each including equivalent
proceedings filed overseas) filed against a Clearing Participant, or in the event thatthe effect stipulated in Paragraph (1) of the following Article does not take effect or the
Association considers such to be likely, the Association may subsequently elect not to
perform the assumption of debts in accordance with the preceding three Paragraphs
for Funds Transfer Transactions that involve such Clearing Participant.
(5) If the Association incurs damage related to the assumption of debts in accordancewith Paragraph (1) or the deposit or withdrawal in accordance with the preceding
Article, the Clearing Participant that acquired credits from the Association in relation
to the assumption of debts pertaining to the damage shall be liable for such damage.
Article 50(Offsetting)(1) All credits to one Clearing Participant acquired by the Association in accordancewith the preceding Article and all debts to such Clearing Participant assumed by
the Association shall be deemed as being offset in corresponding amounts at the
Settlement Start Time.
(2) All credits and all debts of the preceding Paragraph shall be stipulated in thefollowing Items:(i)Credits acquired and debts assumed on the Settlement Date by the
Association in accordance with provisions of Paragraphs (1) and (2) of thepreceding Article(ii)

Credits acquired and debts assumed by the Association in accordance with
provisions of Paragraphs (1) and (3) of the preceding Article from the point
in time when the communication on the More Time System starts on thebusiness day prior to the Settlement Date to the end of such communication- 19 -

on the More Time System on the Settlement Date
Section 3 Sender Net Debit Cap, Collateral
Article 51(Sender Net Debit Cap)

(1) Clearing Participants shall set and declare to the Association its Sender Net Debit
Amount (meaning the amount that is the cumulative amount at one point in time of
the amounts payable to all other Clearing Participants based on Funds Transfer
Transactions using the Zengin System on each Settlement Date, less the cumulative
amount at that point in time of the amounts receivable from all other Clearing
Participants; the same to apply hereinafter) limit (hereinafter referred to as the“Sender Net Debit Cap”). The same shall apply when the Sender Net Debit Cap ischanged. Furthermore, upon declaration of a Sender Net Debit Cap, the maximum
Sender Net Debit Cap stipulated by the Association must not be exceeded.
(2) The Association shall set in the Zengin System the Sender Net Debit Cap declared by
Clearing Participants in accordance with the preceding Paragraph and keep the
Sender Net Debit Amount on each Settlement Date for each Clearing Participant
under control so as not to exceed such Sender Net Debit Cap.
(3) If the amount of collateral that shall be pledged by a Clearing Participant inaccordance with Article 52 falls short of the amount of collateral pledged by such
Clearing Participant, the Association may lower such Clearing Participant’s Sender
Net Debit Cap. In addition, if a Clearing Participant becomes the Bank underMoratorium stipulated in Article 56, the Association may lower such Clearing
Participant’s Sender Net Debit Cap in accordance with Article 56, Paragraph (3). If
the Sender Net Debit Cap is lowered, the Association shall immediately notify such
Clearing Participant to that effect.
Article 52(Collateral)(1) Clearing Participants must pledge collateral acknowledged by the Association in theamount equivalent to the Sender Net Debit Cap declared to the Association.
(2) The Association may separately demand collateral as needed in cases other thanthose stipulated in the preceding Paragraph when the Association considers it
necessary.
(3) The collateral pledged by Clearing Participants (hereinafter referred to as the“Pledged Collateral”) shall be deemed to have been pledged as common collateral forthe debts pertaining to payment of the funds transfer settlement amount stipulated in- 20 -

Article 48 (hereinafter referred to as the “Funds Transfer Settlement Amount Payment
Debts”), for payment of a contribution to expenses and for all other debts as may bepayable to the Association as a Member Bank, regardless of when, why, etc., suchcollateral was pledged.
Article 53(Disposal of Collateral)(1) If a Clearing Participant fails to perform the debts to the Association, the Association
may dispose of the collateral pledged by the Clearing Participant, without prior noticeor demand, in a generally-accepted manner, timing, pricing, etc., and apply the amountremaining after various expenses are deducted from the acquired amount to pay off
those debts regardless of the order designated by the law.
(2) In addition to the provisions of the preceding Paragraph, with notice to the Clearing
Participant, the Association may acquire the collateral pledged by such Clearing
Participant in lieu of paying off such Clearing Participant’s debts to the Association inwhole or in part. In this case, where there is an amount remaining after the amountof debts that the Clearing Participant had failed to pay off to the Association,delinquency charges stipulated in Article 83 and various expenses are deducted fromthe amount of disposal of collateral acquired, the Association shall return theremaining amount to such Clearing Participant.
(3) Clearing Participants shall not claim objections to the disposal of collateral, etc., that
the Association implements in accordance with this Article and other related
provisions.
Article 54

DeletedSection 4 Handling When Default Banks Arise
Article 55(Default Banks)(1) If the Association is notified by the Bank of Japan to the effect that there is a Clearing
Participant for which the withdrawal stipulated in Article 48 could not be made, theAssociation may treat such Clearing Participant as a default bank for non-payment of
the funds transfer settlement amount in accordance with Article 48.
(2) The Association may decide not to recognize payment of the funds transfer settlement
amount of the preceding Paragraph that was not paid by the default bank of thepreceding Paragraph. As a result of this decision, the default bank’s nonperformance- 21 -

of the Funds Transfer Settlement Amount Payment Debts owed to the Association
shall become final and binding.
(3) Notwithstanding the provisions of the preceding Paragraph, where the default bankof Paragraph (1) exhibits nonperformance of the funds transfer settlement amount of
Paragraph (1) falling under Article 33, Paragraph (3), Item (i), the Association may
decide to treat such default bank as a Bank under Moratorium as stipulated in Article
56.
(4) In cases of treatment of Paragraph (1) concerning default banks, or decisions of thepreceding two Paragraphs, the Association shall notify the default bank, all Member
Banks and the Bank of Japan to that effect in each case.
Article 56(Handling of Banks under Moratorium)(1) The default bank that the Association has decided to treat as stipulated in Paragraph(3) of the preceding Article (hereinafter referred to as the “Bank under Moratorium”)
shall, subject to the condition that such Bank under Moratorium pays the separatelystipulated amount (hereinafter referred to as the “Amount Payable”) to the Associationby the payment deadline (3 p.m. on the next business day after the date such decision
is made to treat the same as a default bank), have a moratorium temporarily placedon payment of the Amount Payable.
(2) A Bank under Moratorium shall pay the Amount Payable in a lump sum to the
Association by the payment deadline. In this case, the Bank under Moratorium shallalso pay separately-stipulated interest (hereinafter referred to as the “Interest
Payable”) to the Association. If a Bank under Moratorium has paid the Association theAmount Payable and Interest Payable by the payment deadline, the Association shallno longer treat the Bank under Moratorium as a default bank and Bank underMoratorium and shall immediately notify all Member Banks and the Bank of Japanto that effect.
(3) A Bank under Moratorium may engage in Funds Transfer Transactions as long as it
does not fall under temporary suspension of use of the Funds Transfer Systemstipulated in Article 21; however, the Sender Net Debit Cap of such Bank underMoratorium in this case shall be the amount that is the Sender Net Debit Cap on theCore Time System upon completion of the funds transfer settlement on the day that it
begins to be treated as a default bank in accordance with Paragraph (1) of thepreceding Article less the Amount Payable.
(4) If a Bank under Moratorium is expected to be unable to pay the Amount Payable andInterest Payable by the payment deadline, the Association may extend the payment- 22 -

deadline, once only, to 3 p.m. on the next business day, in accordance with an advanceapplication from the Bank under Moratorium. In this case, the Association shall notify
the Bank under Moratorium, all Member Banks and the Bank of Japan to that effect.
(5) During the period that a Bank under Moratorium is placed under a moratorium on
payments, where additional non-payment of the funds transfer settlement amountarises at the Bank under Moratorium, the Association shall treat such Bank underMoratorium pursuant to the preceding Article. In such case, if the non-payment falls
under Article 55, Paragraph (3), the Amount Payable of the Bank under Moratorium
shall be the amount that is the Amount Payable upon completion of the funds transfer
settlement on the previous business day plus the funds transfer settlement amountthat has newly become a non-payment.
(6) If a Bank under Moratorium fails to pay the Amount Payable and Interest Payable
by the payment deadline, the Association shall temporarily suspend the Bank underMoratorium’s use of the Funds Transfer System stipulated in Article 21. In this case,
the Association shall notify the Bank under Moratorium, all Member Banks and the
Bank of Japan to that effect. In addition, where the Bank under Moratorium which is
subject to temporary suspension as a result pays the Amount Payable and Interest
Payable by noon on the next business day after the day on which the temporary
suspension commenced and an application to resume use of the Funds Transfer
System has been filed, the Association shall lift the Bank under Moratorium’s
temporary suspension and no longer treat it as a Bank under Moratorium and default
bank and shall notify the Bank under Moratorium, all Member Banks and the Bankof Japan to that effect.
(7) If a Bank under Moratorium with temporary suspension in accordance with thepreceding Paragraph fails to pay the Amount Payable and Interest Payable by thedeadline stipulated in the preceding Paragraph, the nonperformance of the Funds
Transfer Settlement Amount Payment Debts stipulated in Article 55, Paragraph (2)shall become final and binding and, where the Bank under Moratorium falls under themain clause of Article 33, Paragraph (2), Item (i), Membership Qualification, etc., shallbe lost.
Article 57(Liquidity-Providing Banks)(1) If a default bank arises (including when additional non-payment of the funds transfer
settlement amount arises at a Bank under Moratorium; the same to apply hereinafter),the Association shall appoint a financial institution to supply funds at the Association’srequest (hereinafter referred to as the “Liquidity-Providing Bank”) from among- 23 -

Clearing Participants in accordance with separately-stipulated criteria and sign anagreement on the supply of funds with such Liquidity-Providing Bank subject toapproval of the board of directors.
(2) The agreement of the preceding Paragraph shall stipulate the limit and other mattersnecessary for such Liquidity-Providing Bank to supply funds to the Association.
(3) In addition to the cases stipulated in Article 58, where funds are required associatedwith the exercising of rights held in a default bank, the Association may request a
Liquidity-Providing Bank for supply of funds.
Article 58(Settlement Processing When Default Banks Arise)(1) Where a default bank arises, the Association shall request a Liquidity-Providing
Bank in accordance with separately-stipulated criteria for supply of the funds required
to complete the day’s settlements.
(2) A Liquidity-Providing Bank that has received a request referred to in the preceding
Paragraph shall pay the amount requested by the Association into the Settlement
Account by the deadline designated by the Association.
(3) If the Association deems that the amount of funds supplied by a Liquidity-Providing
Bank falls short of the amount of funds required to complete the day’s settlements, theAssociation may request supply of the shortfall in funds from all Clearing Participants.
(4) Clearing Participants that receive a request under the preceding Paragraph shall pay
the amount requested by the Association into the Settlement Account by the deadline
designated by the Association.
(5) If the Association has decided on the payment deadline stipulated in Paragraph (2)and the preceding Paragraph, the Association shall immediately notify the Bank ofJapan to that effect.
(6) If the Association has verified that the payments stipulated in Paragraph (2) orParagraph (4) are complete and that it can complete settlements, the Association shallimmediately notify the Bank of Japan to that effect and request payment to theClearing Participants that are to receive the funds transfer settlement amount.
Article 59

Deleted

Article 60(Debt Collection from Default Banks, etc.)(1) The Association shall carry out the procedures necessary for disposal of collateral
stipulated in Article 53 and other debt collection concerning the nonperformance of
any Funds Transfer Settlement Amount Payment Debts of default banks and any- 24 -

credits of the Association concerning the delinquency charges stipulated in Article 83.
(2) The various expenses required in the debt collection of the preceding Paragraph shallbe borne by the default banks.
(3) Even if the amount collected in accordance with Paragraph 1 (hereinafter referred toas the “Collected Amount”) falls short of the funds transfer settlement amount payable
by default banks and amount of delinquency charges stipulated in Article 83, theAssociation may choose not to subsequently conduct the debt collection stipulated in
Paragraph (1) subject to approval of the board of directors.
(4) If the Association decides not to collect in accordance with the preceding Paragraph,when the Association incurs damages, the Association may collect funds in the amountequivalent to such amount of damages from all Clearing Participants subject to theapproval of the board of directors.
Article 61(Repayment to Liquidity-Providing Banks, etc.)(1) The Association shall repay the Liquidity-Providing Bank that supplied funds inaccordance with Article 58, Paragraph (2) and Article 57, Paragraph (3) by using theCollected Amount and payments from the Bank under Moratorium in accordance with
Article 56, Paragraph (2) or Paragraph (6).
(2) Repayment to the Clearing Participants that supplied funds in accordance with
Article 58, Paragraph (4) shall be treated in the same manner as set forth in thepreceding Paragraph.
(3) If the Association deems that the debt collection stipulated in Article 60, Paragraph(1) will take an extended period of time and that repayment will not be completed by
the separately-stipulated repayment deadline to the Liquidity-Providing Banks, theAssociation may collect the funds required for such repayment from all the Clearing
Participants.
(4) If a Collected Amount arises after the Association’s decision to collect funds inaccordance with the preceding Paragraph, the Association shall distribute it to theClearing Participants that contributed funds in proportion to the funds contributed.
Article 62

Deleted

Article 63(Proportion of Joint Burden)

The proportion of burden upon the supply or collection of funds in accordance with
Article 58, Paragraph (3), Article 60, Paragraph (4) or Article 61, Paragraph (3) shall- 25 -

be in proportion to ordinary expenses separately stipulated by the Association for themonth prior to the month in which supply or collection is demanded; provided, however,that the proportion of burden when there are grounds for acquisition, loss, etc., ofClearing Qualification after the default bank arises may be treated separately.
Article 64(Other Necessary Matters)

The necessary matters concerning funds transfer settlement other than those
stipulated in this Chapter shall be stipulated in the handling guidelines.
Chapter 4 Business Continuity
Article 65(Basic Policy on Business Continuity)

In view of ensuring it fulfills its role as a funds clearing agency that serves as part ofthe social infrastructure of Japan, the Association shall formulate the basic policy
presented in the following Articles of this Chapter with respect to the Association’s
business continuity that assumes the emergence of disasters, system failures,
terrorism, etc. (hereinafter referred to as “Disasters, etc.”) and various risks.
Article 66(Basic Thinking)In view of minimizing the impact on Member Banks and associate members in theevent of Disasters, etc., the Association shall set forth the business operation areas inwhich business continuity ought to be achieved and the level of restoration and time
limit for restoration by taking into account the level of importance of the applicablebusiness operations, the criteria established by related organizations and other factors,
and implement the foregoing.
Article 67(Assumed Risks)

As risks as a consequence of various Disasters, etc., such as earthquakes, wind or flood
damage, armed attacks (including threatened terrorist attacks, cyberterrorism, etc.),
spread of infection, system failures, and suspensions in social infrastructure such as
electricity, telecommunications and transportation, the Association assumes buildings
becoming unavailable for use, systems becoming unavailable for use, personnel
shortages, suspension of related organizations, etc., and adopts the policy of taking
countermeasures by classifying such risks into widespread disaster, local damage andsystem failure.

- 26 -

Article 68(Business Operations Subject to Continuity)

The Association shall set the Funds Clearing Business and related business operations
at the top of the list of business operations subject to continuity.
Article 69(Action Policy)

The Association shall strive to continue the Association’s business operations to thegreatest extent possible or strive for its prompt restoration by taking the actions thatare separately stipulated for each category of Disasters, etc., listed in the following
Items.
(i)

Widespread disaster (where damage from a large earthquake, wind or flood
damage, etc., have affected both the Association and related organizations)(ii)

Local damage (local damage is where only the Association is affected, etc., while
Clearing Participants and related organizations are operating as usual)(iii) System

failure(wheresystemhardwarefailure,application

failure,telecommunication line failure, etc., have affected the Association or the externalorganizations that are involved in the Association for execution of the clearing
business)
Article 70(Establishment of Business Continuity Task Force)In the event of widespread disaster, local damage or system failure, the Association
shall establish a business continuity task force as needed, which shall grasp the statusof damage, secure contact with Clearing Participants and related organizations andconduct decision-making required for the Association’s business continuity.
Article 71(Securing of Personnel, Communication Means, etc.)

The Association shall assume cases of emergence of risks, etc., and set forth in advancethe personnel that shall take initial response, means of communicating both internallyand externally in time of emergency, alternative offices, etc., and take the measuresnecessary to enable prompt response in the event of Disasters, etc.
Article 72(Zengin-Computer Center System)

In order to ensure system security and reliability, the Association shall take necessary
measures such as the reduplication of data exchange paths between the Zengincomputer center system and Member Banks.
Article 73(Holding of Drills and Educational Training)

The Association shall regularly hold drills for times of Disaster, etc., and regularly hold- 27 -

educational training for employees.
Chapter 5 Data Exchange Business Operations
Article 74(Data Exchange Business Operations)(1) The Association shall implement data exchange business operations as operations
related to the Funds Clearing Business, with Member Banks and associate members,
as well as with Member Banks and companies, etc. approved by the Member Banks.
(2) Data exchange business operations are business operations involving the sending andreceiving of Transactions Subject to Clearing and other notices, as well as
accompanying communications, via the Zengin System or Zengin EDI System.
Article 75(Establishment of Centers)

The Association shall establish Zengin-computer centers in the following locations to
conduct data exchange business operations:(i)Tokyo; and

(ii)

Osaka

Article 76(Indemnification)

Even if a Member Bank and a company, etc. approved by the Member Banks incurdamage concerning data exchange business operations with the Association, theAssociation shall not be liable to provide indemnification for such damage unless there
is recognized to have been willful or gross negligence on the part of the Association.
Chapter 6 Ruling of Incidents
Article 77(Filing and Ruling)(1) If an incident involving Funds Transfer Transactions results in a loss that is difficult
to resolve amongst the relevant banks and where an incident involving the joint
liability of Member Banks concerning Funds Transfer Transactions results in a loss,
Member Banks may file for a ruling from the Association in writing or in an electronic
record.
(2) Upon receiving such filing, the Association shall establish a committee for the ruling,which shall promptly investigate the facts and clarify where the liability belongs, andrule on the scope and amount of damage that shall be the subject of the liability.

- 28 -

Chapter 7 Outsourcing of Business Operations
Article 78(Establishment of Structure for Outsourcing of Business Operations)

Upon outsourcing the Funds Clearing Business in part to a third party (hereinafterreferred to as the “Outsourcing of Business Operations”), the Association shall ensure
the business operations pertaining to such outsourcing are executed appropriately andreliably through the provisions set forth in this Statement of Operational Procedures
and taking the measures otherwise necessary.
Article 79(Development of Plan for Outsourcing of Business Operations)

If the Association is to outsource business operations, the Association shall develop an
outsourcing plan that provides an outline of the purpose of outsourcing, the risk
management method of the business operator to which to outsource, etc.
Article 80(Criteria for Selecting Business Operator to Which to Outsource)

In selecting the business operator to which to outsource business operations, theAssociation

shallassessthebusiness

operator’ssecurity

and

other

separately-stipulated matters.
Article 81(Business Operations Outsourcing Contract)

The agreement pertaining to the Outsourcing of Business Operations shall include
separately-stipulated matters.
Article 82(Management of Outsourcing of Business Operations)

If the Association considers it necessary for investigation of the status of compliancewith laws and regulations and other rules by the business operator to which business
operations are to be outsourced, the Association may demand, with the reasons
therefor presented, the business operator to submit reports or materials that would
serve as a reference or have the Association’s employees inspect the business
operator’s place of business or conduct another type of inspection.
Chapter 8 Miscellaneous Provisions
Article 83(Delinquency Charges)(1) If a Clearing Participant fails to perform debts owed to the Association pursuant tothis Statement of Operational Procedures or other related rules, etc., by the deadline,- 29 -

the Clearing Participant shall pay delinquency charges calculated by multiplying theamount of such debts by an annual rate of 14%, for the period from said deadline until
the date of performance.
(2) The method of calculation when calculating delinquency charges shall be to calculate
with the start and end dates inclusive and based on a 365-day year.
Article 84(Decisions on Matters Necessary for Funds Clearing Business, etc.)

The Association may set forth the handling required in addition to the matters set
forth in this Statement of Operational Procedures when necessary for the Funds
Clearing Business, etc.
Article 85(Contact and Notice on Handling Guidelines)

If a handling guideline required for operation of this Statement of Operational
Procedures is to be set forth, or such handling guideline is to be amended, theAssociation shall contact the Bank of Japan in advance.
Article 86(Amendment Authority)(1) This Statement of Operational Procedures may be amended by resolution of the boardof directors; provided, however, this shall not apply if the content of the change is minor.
The Association shall consult with the Bank of Japan upon amendment of any of
Articles 9, 10, 11, 16, 20, 24, 25, 33, 34, 35, 36, each Article of Chapter 3, Articles 83,
85 and this Article.
(2) In the event of amendment of the preceding Paragraph, the Association shallimmediately notify all Member Banks and the Bank of Japan to that effect.
Article 87(Governing Laws and Agreed Jurisdiction)(1) This Statement of Operational Procedures shall be governed by the laws of Japan.
(2) The Tokyo District Court shall have exclusive jurisdiction over any legal action in theevent of any dispute arising between the Association and Member Banks concerning
the rights and obligations under this Statement of Operational Procedures; provided,
however, that the Association is not prevented from filing a lawsuit against Member
Banks in any court of competent jurisdiction in a foreign state.
Supplementary Provisions
1 This Statement of Operational Procedures shall come into effect on October 1, 2010.
End- 30 -