ASSOCIATION GUIDE

Chairman’s Message
T 2 FIFA
Type II Financial Instruments Firms Association

The Type II Financial Instruments Firms Association (T2FIFA) is a generalincorporated association functioning as a self-regulatory organization for firms
operating financial instruments such as trust beneficiary rights and funds (socalled “Deemed Securities”). Its legal status is a Financial Instruments Firms
Association certified by the Prime Minister, pursuant to Article 78 of theFinancial Instruments and Exchange Act (FIEA). As of February 2024, T2FIFA
has over 630 members consisting of securities firms, banks, real estatecompanies and other institutions.
Japan has over 2000 trillion yen in personal financial assets, half of which areheld as cash or bank deposits. With the advent of a longevity society,promoting asset building through using capital markets is needed.
Contributing to people‘s asset formation and financial facilitation are ourchallenges. We are working hard to supply appropriate financial instruments
while protecting investors.

MORITA Toshio
Chairman and CEO

Overseas financial institutions are very welcome to join our association. We
can assist you, smoothing your path in Japan. Please feel free to contact us.

Organization
General Meeting ofMembers

Board of Directors• Regular Member Directors• Public Interest Directors• Regular Directors• Regular Member Auditors• Public Interest Auditors

Policy Committee

To resolve the matters prescribed in
the Articles of Incorporation set forthbelow.
• Matters concerning theAssociation’s budget, settlement ofaccounts and membership fees

• Considering budget, settlement of accounts andmembership fees
• Considering Self-regulatory Rules• Planning and operation of educational programs• Considering dissemination of knowledge andawareness of transactions• Matters related to the enactment,
amendment and abolition of
Self-regulatory Rules• Expressing opinions, requests• Matters concerning admission andwithdrawal

Disciplinary Committeechairman• Matters concerning disciplinary
action and admonition of members

Secretariat

General Administration Dept.
Member Relations Dept.
Self-regulatory Business Dept.

1• Discussion concerning disciplinary action
and admonition of the members

Purpose
The purpose of the Association is to make the Type II Financial Instruments Business, etc.
conducted by Regular Members and Electronic Public Offering Members to be fair and smooth,and also to contribute to the sound development of Type II Financial Instruments Business, etc.
and protection of investors.

History
2007

The Financial Instruments and Exchange Act (FIEA), a comprehensive overhaul of the former
Securities and Exchange Act, was enforced.

2010

T2FIFA was established.

2011

The Prime Minister certified T2FIFA as a Financial Instruments Firms Association.

2012

T2FIFA started member education.

2015

Amended FIEA provided measures for increasing T2FIFA members business.

2018

SDGs Promotion Working Group established.

2019

SDGs Promotion Working Group Report was published.

2020

T2FIFA starts remote education for members.

2022

T2FIFA notification net system started operation.

Membership Application
New members are very welcome. We can provide you with helpful support for your businessdevelopment in Japan. The application procedure is shown at our website.

“Type II Financial Instruments Business”
The Type II Financial Instruments Business is provided for in Article 28, Paragraph 2 of the FIEA. The
term “Type II Financial Instruments Business” means self-offering related to collective investment
scheme interests etc. and conducting any of the following acts related to “Deemed Securities”.
(i)sale and purchase of Securities(ii)

intermediary, brokerage(iii)

dealing in Public Offering or Secondary Distribution of Securities or dealing in Private
Placement of Securities;

Type II Financial Instruments Business shall be conducted only by persons and companies registeredby the Prime Minister.

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“Deemed Securities”
Article 2, Paragraph 2 of FIEA defines the following rights as Deemed Securities. Even if they are
not rights which must be indicated on instruments or certificates, they are deemed as Securities.
The rights prescribed in (v) are so called collective investment scheme interests (shudan-toshi
scheme mochibun).

(i)beneficial interest of a trust (shintaku juekiken);(ii)

rights that are claimable against a foreign person and which have the nature of the rights
specified in the preceding item;(iii)

the membership rights of a general partnership company or limited partnership company(limited to rights specified by Cabinet Order), membership rights of a limited liabilitycompany;(iv)

the membership rights of a foreign corporation which have the nature of the rights
specified in the preceding item;(v)

among the rights based on a partnership contract provided for in Article 667, paragraph
1 of the Civil Code, a silent partnership agreement provided for in Article 535 of theCommercial Code, a limited partnership agreement for investment provided for in Article3, paragraph 1 of the Limited Partnership Act for Investment, or a limited liability
partnership agreement provided for in Article 3, paragraph 1 of the Limited Liability
Partnership Act, membership rights in an incorporated association or other rights(excluding rights based on foreign laws and regulations) the holder of which can receive
dividends from profits arising from business that is conducted using the money (including
anything specified by Cabinet Order as being similar to money) invested or contributed by
the equity holder or a distribution of the assets of the invested business. (Item (v) from (a)to (c) of said paragraph are exceptions.)(vi)

rights based on laws and regulations of a Foreign State which are similar to thosespecified in the preceding item;(vii)

securities specified by Cabinet Order

Article 2, Paragraph 3 of the FIEA defines Paragraph 2 Securities. They are the above-mentioned“Deemed Securities” excluding electronically recorded transferable rights with high liquidity.

3Activities
T2FIFA has established the following self-regulatory rules in order to contribute to theappropriateness of solicitation of transactions related to self-offerings and other transactions,conducted by regular members. Regular members are required to comply with these rules. Pleaserefer to our website for further information.
e.g.

Rules Concerning Representation of Advertisement, etc. and Offers of Premiums
Rules Concerning Solicitation of Investment and Management of Customers, etc.
Rules Concerning Handling of Private Placements, etc. of Business-Type Funds

T2FIFA currently provides the following services to its regular members.
1.

Education.

2.

Prepared “Type II Financial Instruments Business Practice Manual” and Q&As

3.

Creation of association model forms and provision of form creation website

4.

Establishment of Compliance Counseling Office and Tax Counseling Office5.

Use of FINMAC (Financial Instruments Mediation Assistance Center)
Note: FINMAC is the Alternative Dispute Resolution (ADR) Institution designated by
the Financial Service Agency

6.

Support for elimination of antisocial forces

7.

Dissemination of information

8.

Compilation of requests to administrative authorities

Working to Promote SDGs
T2FIFA supports its members’ commitment to SDGs.
The SDGs Promotion Working Group established under the Board ofDirectors published its report. The report is available both in Japanese andEnglish on our website.

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2–11–2, Nihombashi, Chuo–ku, Tokyo
103–0027 JAPAN

Logo concept:
The two diagonal lines mean II; their thickness getting thicker as they go to the upper right means
growth and progress; the circle means the rising sun.
Concept of the illustration on the cover:
The illustration on the cover expresses that seeds called trust beneficiary rights or funds planted by Type II Financial Instruments
Business operators bear fruit in fields such as finance, real estate, energy, infrastructure, logistics, medical care and agriculture.

2024.2

Association Overview
Name: Type II Financial Instruments Firms Association(lppan-Shadan-Houjin Dainishu-Kinyu-Shouhin-Torihikigyou-Kyoukai)

Office: 2-11-2, Nihombashi, Chuo-ku, Tokyo 103-0027 JAPANWebsite: https://www.t2fifa.or.jp/en/
Number of executives and staff: 21 (as of July 1, 2023)

Board Members (as of June 27, 2023)* Note the names of the member list are written as “SURNAME First name”.
Public Interest Director,Chairman and CEO

MORITA Toshio

Japan Securities Dealers AssociationRegular Member Director

ARAKI Saburo

Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

ISHIDA Tateaki

Tokai Tokyo Securities Co., Ltd.

ENDO Yasushi

Mitsui Fudosan Realty Co., Ltd.

KOMATSU Masami

Music Securities, Inc.

SHIRAKAWA Itaru

Mizuho Securities Co., Ltd.

NAGAI Koji

Nomura Securities Co., Ltd.

HIBINO Takashi

Daiwa Securities Co. Ltd.

HIRANO Kiyohisa

Daiwa Corporate Investment Co., Ltd.

MORISHIMA Atsuhiro

Mizuho Bank, Ltd.

YUASA Tetsuo

Mitsubishi Real Estate Services Co., Ltd.

YOSHIOKA Shuji

SMBC Nikko Securities Inc.

Public Interest Directors

IWAHARA Shinsaku

Emeritus Professor of Law, The University of Tokyo

Regular Director

AOKI Ichiro

Regular Director(Managing Director)

INUBUSHI Toshiyuki

Public Interest Auditor

TANAKA Sanae(Senior Managing Director)

Attorney

Number of Members (as of August 1, 2023)● Regular Members: 630

Board of directors● Electronic Public Offering Members: 0

Real estate discussion forum● Supporting Members: 8Social gathering for representatives
Published August 2023

Business report for fiscal year ended March 31, 2023
I. General meetings, board of director meetings, committee meetings, etc.
General meetings were held 3 times (1 ordinary, 2 extraordinary), board of director meetings were held 13 times (4 inperson, 9 in writing), policy committee meetings were held 4 times (3 in person, 1 in writing) and disciplinary committee
meetings were held 2 times.

II. General overview of business activities▯ Enhancement of communication with regular members, support for business operations● Held in-person seminar, for representatives of regular members, for the first time in three years (available online for alimited time thereafter), as well as a follow-up social gathering to promoteinteraction between representatives.
● Created and released print and electronic versions of our Type II Financial
Instruments Business Practice Manual (8th ed.) and Real Estate Trust Beneficiary
Rights Transactions Manual (3rd ed.).
● Established a Compliance Counseling Office (entrusted to 4 law firms), which wasutilized by 18 companies for 23 cases. Also established a Tax Counseling Office,which was utilized by 5 companies for 5 cases.

▯ Training, etc.

Seminar for representatives● So as to improve convenience for regular members and better prevent the spread of COVID-19, continued to offer 21
e-learning courses, as per previous fiscal year. Courses have been utilized by 8,340 persons (total) as of March 31, 2023.
● Released 2 videos on e-learning site as part of efforts to promote SDGs.

▯ Self-regulatory activities● Revised the “Rules Concerning Solicitation of Investment and Management of Customers, etc.,” which prohibits
unsolicited solicitation in regard to collective investment schemes including crypto-assets in investment targets.
● Revised “Q&A on Practical Measures in Regard to ‘Guidelines for Anti-Money Laundering and Combating the Financingof Terrorism’” (September 2022 ed.) and “Q&A on Practical Measures in Regard to the Act on Prevention of Transfer of
Criminal Proceeds” (revised 2nd ed.).

▯ Inspections, monitoring, disciplinary actions, etc. for regular members● Carried out inspections for 12 regular members according to basic inspection plans. Additionally, released videos via
e-learning site and gave notifications to regular members, regarding inspection results for the fiscal year ended March31, 2022.
● Carried out dispositions (reprimand), recommendations, etc., as stipulated for in articles of incorporation, for 1 regularmember found to have been violated of laws and regulations.
● Released aggregated results (summary) for status of handling of lending funds (semiannual) and status of handling ofelectronic-based application type electronic public offering services related to deemed securities (quarterly).

▯ Initiatives to preserve trust and security among investors and ensure sufficient financial
intermediary functionality● Participated as an observer in FSA “Financial System Council Working Group” on capital market regulations andsubmitted written opinion to secretariat. Also participated as an observer in “Customer-Oriented Business Conduct
Task Force” under the working group and expressed opinion.

▯ Electronization of member notifications and reports● In light of government pursuit of digitalization of services and the Financial Service Agency’s exploration of andpreparation for moving applications and notifications to an online system, we strove to reduce operating burdens andimprove convenience through electronization of member notifications and reports. The system went into operationaccording to schedule on April 1, 2022.

▯ English language support for membership application documents, etc.
● As of October 31, 2022, carrying out registration procedures in English is permitted for Type II Financial Instruments
Business conducted by overseas financial institutions entering the Japanese market that meet certain conditions.
“Accordingly, we implemented English language support for application documents. Additionally, we revised the English
translations of self-regulatory rules.

▯ Public relation activities● Created new pamphlets, with the aim to promote understanding among general investors in regard to items such as
Type II Financial Instruments Business/funds and real estate trust beneficiary right instruments/transactions, etc.; aswell as to spread awareness of our activities. Pamphlets were distributed to the Financial Service Agency, local financebureaux and other associated organizations, and were used to aid in explaining our services. English language versionsof pamphlets and websites were also created to promote participation in our association among overseas financial
companies newly entering Japan, with a particular focus on providing information related to joining.