(Translation)
Contingency Plan for System Failure and Other Emergencies
November 22, 2010
Tokyo Financial Exchange Inc.
Tokyo Financial Exchange Inc. (the “Exchange”) operates its business in accordance with this contingency plan under suchcircumstances as that the Exchange finds an actual or threatened abnormal condition in any market derivatives transactions, or that
the Exchange otherwise deems it inappropriate to allow the market derivatives transactions to continue in light of management of theExchange Market, due to, including but not limited to, failure of the Exchange System or any other third-party systems in relation tothe transaction settlement..
Furthermore, if the Exchange determines that execution or clearing of transactions has become impossible or extremely difficult due toan act of God, failure of electricity, telecommunications or other social infrastructures or under other unavoidable circumstances, theExchange will apply this contingency plan.
1.
1Case and action
CaseAction by the Exchange
PolicyPertinent Regulations
Failure or other emergency z If it becomes difficult for z “Trading System” includes the z Articles 7, 14 and20-9 of Trading
FX/Equity Index Trading andcertain issues to be tradedhasoccurred
totheRegulations
Clearing Systems.
due to suspension, error or
Exchange’s Trading Systemother failure of the Trading
System or other emergency, z If the Trading System becomes z Articles 4 and 6-5 of
the Exchange will suspend
Enforcement
inoperative due to system failure orthat trading.
Regulations
forother emergency, the Exchange will1

suspend trading.
z If it becomes impossible forcertain particular Trading z For those issues which are notaffected, trading will be continued.
Members to execute theirtransactions in ordinarycourse due to partial failure, z the Exchange will continue trading
lineoutageor
otherand provide Trading Members, etc.
emergency in respect of thewith trading opportunities as far as
Trading System and wherepossible. However, if the Exchange
the Exchange determines
determines that it cannot secure fairthat the Exchange cannot
market making, the Exchange willsecure fair market-making
suspend trading.
for their transactions inoverall
viewofthe z the Exchange will not adopt
circumstances
including
postponement of the last trading
past trading share records orday, as the postponement wouldthenumberofsuch
materiallyaffecttheissue’s
aggrieved Trading Members,
marketability, etc.
the Exchange will suspend
tradingofthosetransactions.
z Provided, however, withrespect to any futurestransactions, even if trading
is suspended on the last
trading day of the contract
month due to system failureor any other emergency andthe Market Trading Period

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Trading Regulations

has ended, the Exchange
will not postpone the last
trading day or take any
otherspecific
remedialactions.
z Even if the Exchangesuspends trading during theMarketTrading
Period,transactions that have been
already executed prior to thesuspension shall be deemedvalidandprocessedaccordingly.
z Provided, however, if, during
failure of the Trading
System, any transaction is z In the event of failure of a Member’s
System, power outage or failure ofconcluded in contravention
other social infrastructures or otherwith
anyrulesandemergency, transactions will not beregulations of the Exchange
canceled, unless such failure causesor
any determination by
the situations described on the z Articles 14-2 andthe Exchange in connection
immediately left column.
with maintenance of orderly
14-3 of Trading
operation of the market, theRegulations
Exchange may cancel thetransaction,andtakez Article
4-2ofwhatever actions which areEnforcement
required in connection withRegulations
forthe cancellation.
Trading Regulations

3

2

Failure or other emergency z Even if it becomes difficult z So long as the Trading System isoperating normally, the Exchange
for any such system tohas occurred to a system
will continue trading as a matter ofprovide
theExchange’s
whichprovides
thepriority.
market quotations due to
Exchange’smarket
failure or other emergency,
quotations
trading will be continued, so z Trading Members may obtainlong as the Trading System
market quotations from theiris operating normally.
terminal device and Customers mayobtain the same from the TradingMembers.

3Failure or other emergency z If it becomes impossible to z “Clearing System” includes the z Articles 99, 100 and
103 of Clearing
FX/Equity Index Trading andgenerate
settlementhas
occurredtotheRegulations
Clearing System.
information to be provided to
Exchange’s Clearing SystemTradingMembersor
informationconcerning The policy is to prevent the increase ofrequests for fund transfer (or settlement risk due to accumulation ofsettlement) to the Bank of unsettled transactions.
Japan / settlement banks，due to general suspension of
the Clearing System or otheremergency, the Exchange
may choose to postpone thesettlement time and thesettlement date for all
contracts concerned.
Insuch case, the postponed
settlement
time,
thepostponed settlement date4

andtheterms
andconditions and other detailsof the settlement after thepostponement
will
bedetermined in view ofprogress of the system
recovery and other factors
concerned.
z In the event that advising ofsettlement information toTrading
Membersandsettlement banks throughthe Clearing System has
become impossible due topartial suspension of theClearing System or otheremergency, the Exchange
will use other available
means for advise, including
facsimile transmission.
z If recovery of the Clearing
System is prolonged, theExchangemaysuspendtrading.
4Failure or other emergency z Even if failure or other z So long as the Trading System isoperating normally, the Exchange
emergency occurs to thehas occurred to the Bank ofwill continue trading as a matter ofBank of Japan Financial
Japan Financial Network5z Articles 7, 14 and20-9 of Trading
Regulationsz Articles 4 and 6-5 ofEnforcement
RegulationsforTrading Regulations

SystemNetwork System (including
any device to be used for
utilizing
thesame,hereinafter referred to as“BOJ-NET”), trading will be
continued so long as theExchange
Systemisoperating normally.
z In the event that failure orotheremergency
hasoccurred to the BOJ-NET
and settlement banks areprevented
frommakingtransfer requests at theirdesignated office for fundtransfer via the BOJ-NET,
settlement of funds forJapanese Yen Settlement
Banks, other than those inconnection with Exchange
FX Margin contracts andExchange
EquityIndex
Margin contracts, will be
continued in normal courses
by alternative means.

6priority.

Each settlement bankshoulddevelopandmaintain a process inwhich
thefollowing
alternative means areused, to secure continued
settlement of transactionsin an expeditious manner:(i)
Useofwritten
instruments forfund
transfer transactions at
the designated office forfund transfer or any otheroffices; or(ii) Use of the BOJ-NET
at any office other thantheir designated office forfund transfer* Use of these alternativemeans shall be subject totheExchange’sagreement.

z In the event that failure orotheremergency
hasoccurred to the BOJ-NET
andtheExchange
ispreventedfrommaking
7z Articles 99, 100 and
103 of Clearing
Regulations

fund transfer requests via
the BOJ-NET, the Exchange
will promptly advise of suchfact to the settlement banks
and, after it confirms thatthe amounts to be depositedin the checking account ofthe Exchange at the Bank ofJapan have been fully
deposited, the Exchange will
request the Bank of Japan totransfer the funds to thechecking account of thesettlement bank at the Bankof Japan, by means ofexecuting written requests.
z Wheresettlement
iscontinued by means ofexecution of written requests
or other alternative means,
the Exchange may postpone
the settlement time and thesettlement date for all or anyof
thetransactions
concerned. if the Exchange
determinesit
truly
unavoidable to do so in lightof the performance ofclerical work for settlement

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by the settlement
concerned,banks

z If recovery of the BOJ-NET
isprolonged
andtheExchange determines that
securing
continuedanduninterrupted
fund
settlement for Japanese Yen
Settlement Banks throughany of the alternative means
would be extremely difficult,the Exchange may suspend
trading.
5z Articles 7, 14 and20-9 of Trading
Regulationsz Articles 4 and 6-5 of
Enforcement
Regulations
forTrading Regulations

28
Failure or other emergency z Even if failure or other z So long as the Trading System is z Article
Japanese
operating normally, the Exchange
emergency occurs to a
has occurred to a system ofSettlement
will continue trading as a matter ofsystem of settlement bank,settlement bank
Regulations
priority.
trading and settlement will
be continued, so long as theExchange
Systemisoperating normally.
z In the event that, due toemergency to the settlementbank,fund shortage has
occurred to the Japanese yen
settlement account opened
and maintained by theExchange
with
that

9ofYensettlement bank or with theBankofJapan,
theExchange will cover theshortfall of the fund.
z Notwithstanding
theforegoing, if the Exchange
determinesit
truly
unavoidable to do so in lightof the condition of the failure
or emergency, the Exchange
may postpone the settlement
time and the settlement date
for all or any of thetransactions concerned.
6Failure or other emergency z In the event that failure or z Overall security of trading at theExchange is to be secured.
otheremergency
has
has occurred to a Trading
occurred to a Trading
Member’s own system
Member’s own system, and if
as a consequence some of theTrading
Membersareprevented from executing
theirtransactions
inordinary
course,theprovisions in Case 1 “Failureor other emergency has
occurred to the Exchange’s
Trading
System”
above
applicable to the failure of a

10z Articles 99, 100 and
103 of Clearing
Regulations

certain Trading Member will
be applied mutatis mutandis
to this case.

7z In the event that failure orotheremergency
hasoccurred to a Trading
Member’s own system and if
suchTrading
Member’s
settlementbusinessisthereby
frustrated,theExchange may suspend thetransactions with respect tosuch Trading Member until
the system recovery isconfirmed.

z Articles 14 and 20-9of
Trading
Regulations

System failure or other z In the event that system
failure or other emergency
emergency has occurred tohas occurred to any suchaninstitution
orinstitution or organization
organization (including buton the last trading day of
not limited to the Japanese
any contract, and therebyBankers Association) whichsuch
institution
orannounces the base rate,organization becomes unable
etc., to be used to determine
to announce the base rate,
the final settlement figure
etc., for the final settlement
for any contract on its last
figure with respect to suchtrading day
contract, the Exchange will
determine
thefinalz Article 55.4, et. al. ofClearing
Regulations

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settlement figure for therelevant contract in overall
view of the circumstances,including the trading statusof the contract on that day
and the settlement price ofthat contract on the previousday.
Provided, however,that the foregoing does not
apply to Exchange FX
Margincontracts
andExchange
EquityIndex
Margin contracts.
82.

Failure or other emergency z In the event that power orother energy supply is
has occurred to electricity or
stopped and thereby failure
other social infrastructuresor other emergency has
occurred to the Trading
System, the provisions inCase 1 “Failure or otheremergency has occurred totheExchange’s
Trading
System” above shall beapplied mutatis mutandis tothis case.
Notification and contacts to Trading Members upon occurrence of system failure or other emergency

12Upon occurrence of system failure or other emergency, the Exchange will announce the status (including the situation, cause, status ofsuspension of trading, recovery estimate) and future actions (including direction related to reactivation of trading) to the Trading
Members and information vendors via emergency fax number, terminal messaging system, website or e-mail whichever is then available,and also.

Furthermore, the Exchange will forward the failure information to the institutions and organizations concerned, in addition

to the above-mentioned parties.
If the Exchange decides to postpone the settlement time and the settlement date as set forth in 1. above, it will promptly advise of suchfact to all Trading Members, settlement banks and the Bank of Japan.

＊This English version is not an official translation of the original Japanese document. In cases where any differences occur between theEnglish version and the original Japanese version, the Japanese version will prevail. Tokyo Financial Exchange, Inc. (TFX) shall not
accept any responsibility or liability for damage or loss caused by any error, inaccuracy, misunderstanding or misspelling with regard tothis translation. This translation may be used only for reference purposes. TFX maintains the right to claim compensation fromviolators for any damage or loss it may suffer from the violation of these conditions.

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