THE UNITED STATI!S 

STATEMENT 

OF 

INTENT 

SECVRlTIF.S AND EXCHANGE COMMISSION 

COMMODITY FUIVRES TllAD1NC COMMISSION 

THE FINANCIAL SDl.VICES 

AGENCY OF JAPAN 

CONCERNING COOPERATION, CONSULTATION 

AND THE EXCHANGE OF INFORMATION 

May 17, ZOO.Z 
STATEMENT OF INTENT CONCERNING COOPERATION. CONSUlTATION AND 

THE EXCHANGE OF INFORMATiON 

The Securities and Exchange Commission of the United States and the 

Commodity Futures Trading Commission of the United States, on the one hand 

and the Rnancial Services Agency of Japan, on the other ha~ recognizing 

increased International actMty in securities and futures transactions and the 

corresponding need for mutual cooperation betv.leen relevant authorities, state 

hereby the intentions to cooperate~ consult and exchange information in 

connection with superv;sory and enforcem91lt matters as follows. 

DEFINJTIONS 

For the purposes of this Statement of Intent 

1. •• Authority" means: 

{a) the Securities and Exchange Commission of the United 

States; 

(b) the Commodity Futures Trading Commission of the United 

States; 

or 

(c) the Financial Services Agency of Japan. 

2. ~Requested Authority" means an Authority to whom a request is 

made under this Statement of Intent 

3. "Requesting Authorjty" means an Authority making a request under 

this Statement of fntent 

4. "Mart<er means an exchange or other market, including an overthe-counter market, that is recognized, supervised or subject to 

regulation by an Authority. 

5. •taws and Regulations" mean: 

(a) for securities, the provisions of the faws of the United States 

and Japant the regufations promulgated thereunder, and 

other regulatory requirements that faN within the jurisdiction 

of the Authorities, conceming securities;. and 

(b) for futures. the provisions of the laws of the United States 

and Japan, the regulations promulgated thereunder, and 

other regulatory requirements that fall within the jurisdiction 

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of the Authorities, concerning securities derivatives 

contracts. 

6. "P9Tson" means a natural personl unincorporated associationt 

partnership, trust, body corporate. or government - or a political 

subdivtsion, agency, instrumentality ·or equivarent authority of a 

govemment. 

7. Except as provided in paragraphs 1 through 5. for the purposes of a 

request for assistance made pursuant to this Statement of Intent. 

the Authorities wilt define terms in accordance with the relevant 

laws of the Requesting Authonty•s jurisdiction, unless such 

definition would require the Requested Authority to exceed its legal 

authority. or otherwise would be prohibited by the law of the 

Requested Authority'~ jurisdiction. In any case where such 

definition of a tenn would require the Requested Authority to 

exceed its regal authority or otherwise would be prohibited by the 

law of the Requested Authority's jurisdiction, the Authorities Wlll 

consult in accordance with paragraph 15. 

STATEMENT OF INTENT 

8. This Statement of Intent is a statement of intent of the Authorities to 

cooperate, consuft and exchange information in connection with 

supervisory and enforcement matters. all consistent with and 

permitted by the laws and Regulations of the Authorities. The 

Authorities also intend to consult periodicaUy about matters of 

mutual concern. Such consultation wlll be undettaken in the 

interest of improving cooperation to avoid the conflicts that may 

arise from the application of diffeting regulatory laws, regulations 

and practices. Consultation also wiH be undertaken to enhance: the 

protection of investors and customers; the effaciency and integrity of 

the Markets of the United States and Japan; appropriate Market 

oversight; and the effective performance by the Authorities of their 

respective functions regarding the Laws and Regulations of the 

United States and Japan. 

9. General Principles Regarding Cooperation, Consultation and 

the Exchange of Information 

(a) This Statement of Intent is not intended to create legaly 

binding obligations or supersede domestic laws. 

(b) This Statement of Intent does not authorize an Authority to 

take or prohibH it from .taking measures other than those 

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described herein to obtain information necessary to ensure 

enforcement of or compDance with the Laws and 

Regulations applicable in its jurisdiction. 

(c) This Statement of Intent does not confer upon any Person 

not defined as an Authority within this Statement of Intent, 

the ability directly or indirectly to obtain1 suppress or exclude 

any information or to chaDenge the execution of a request for 

assistance under this Statement of Intent. 

{d) The Authorities recognize the importance and desirability of 

cooperation, consultation and the exchange of information. 

However, a request for assistance may be denied by the 

Requested Authority: 

(i) where the request would require the Requested Authority 

to act in a manner that would violate its domestic law; 

(ii) where the request is not made in accordance with th;s 

Statement of Intent; or 

(iii) on grounds of public interest. 

Where a request for assistance is denied, or where 

assistance is not available under its domestic law, the 

Requested Authority win prov~ the reasons for not granting 

the assistance and consuh pursuant to paragraph 15. 

10. Scope of Aasistance 

(a) Pursuant to this Statement of Intent, the Authorities wil 

provide each other with the futlest assistance permissible 

under the laws of tha United States and Japan. SUch 

assistance wil be provided in. order to facilitate: the 

enforcement of and compliance with·the Laws and 

Regulations applicable to Markets and their participants; 

Market oversight ilcluding Market and fmancial surveilance: 

the granting of licenses, registrations, authorizations, 

waivers, or exemptions for the conduct of activity under the 

Laws and Regulations; the supervision and inspection of 

Persons that are regulated by an Authority; the investigation. 

or civil or administrative enforcement action by an Authonly, 

of activity that potentiaJiy violates the laws and Regulations 

appftcable in its respective jurisdiction; and any other matters 

that the Authorities deem appropriate. Such assistance will 

be provided without regard to whether the type of conduct 

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described in the request for assistance would constitute a 

violation of the Laws and Regulations of the Requested 

Authority. 

(b) The assistance available under this Statement of Intent 

includes, without limitation: 

{i} providing information held in the files of the Requested 

Authority; and 

(ii) obtaining information and documents from Persons. 

(c) The Authorities recognize that they may not in an 

cjrcumstances possess the legal authority to provide the 

assistance or information referred to in paragraph 10. In 

such circtmstancest the Authorities wRI use all reasonable 

efforts to obtain the aid of such other governmental agencfes 

that can provide the assistance or ilformation descnbed in 

paragraph 10. 

11. Requests For Assistance 

(a) Requests for assistance wiJI be made in writing and wiD be 

addressed to the Requested Authority's contact offacer listed 

in Appendix A. 

(b) Requests will include the following: 

(i) a genetal description of both the subject matter of the 

request and the purpose for which the assistance, 

documents, or information is sought; 

{ii) a general description of the assistance, documentslt or 

information sought by the Requesting Authority; 

(iiij any information or documents known to or In the 

possession of the Requesting Authority that might assist 

the Requested Authority in identifying either the Persons 

believed to possess the information or documents sought 

or the places where such information or documents may 

be obtained; 

(iv) the Laws and Regulations pertaining to the subject 

matter of the request;· and 

(v} the desired time perJod for the reply. 

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{a) Information held in the files of the Requested Authority wifl 

be provided to the Requesting Authority upon request. 

(b) Upon request. the Requested Authority wift require the 

production of documents or information from any Person 

who may possess the requested infOrmation or documents. 

Upon request. the Requested Authority wU1 obtain other 

information refevant to the request. · 

(c) unress otherwise agreed by the Authorities, information and 

documents requested under this Statement of Intent wiH be 

gathered in accordance with the procedures applcable in the 

jurisdiction of the Requested Authority and by Persons 

designated by the Requested Authority. 

(d) Notwithstanding any other parts of this Statement of Intent, 

any Person providing information or documents as a resuH of 

a request for assistance under this Statement of Intent wiD 

be entitled to an rights and priviJeges applicable in the 

jurisdiction of the Requested Authority. Assertions regarding 

rights and privileges arising exclusively under the laws 

applicable in the jurisdiction of the Requesting Authority will 

be preserved for consideration by the courts in that 

jurisdiction. 

13. PermissJble Usee of lnfonnation 

The Requesmg Authority may use and disclose non-publiC 

information fumished in response to a request for assistance under 

1his Statement of Intent solely for: 

(a) the purpose stated in the request for assistance wlh respect 

to ensuring compliance with or enforcement of the l:aws and 

Regulations applicable in the jurisdiction of the Requesting 

Authority. including the legal provisions specified h the 

request and related provisions; and 

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(b) a purpose related to that stated in the request for assistance, 

including conducting a civil or administrative enforcement 

investigation or proceeding, assisUng in a self-regulatory 

organisationta swveUiance or enforcement activities, and 

assisting in a criminal investigation in accordance with 1he 

Note Verbale issued on May 17, 2002 by the Governments. 

14. Confidentiality 

(a) Except for uses and disclosures in accordance with 

paragraph 13 and uses and disclosures that are absolutely 

necessary to cany out the request, each Authority, to the 

extent permitted by law, wil keep confidential: 

(i) any information furnished under this statement of Intent; 

(iQ requests made under this Statement of Intent, and any 

materials relating to the underlying information furnished 

under this Statement of Intent, ineludingf but not limited 

to. COITe$pOndence or other exchanges in which the 

Authorities share.fnvestigative analyses. progress, 

procedures or strategies: and 

(iii) discussions and consultations held under this Statement 

of Intent. including consultations under paragraphs 8 and 

15. 

(b) To the extent possible. the Requesting Authority will notify 

the Requested Authority of any legaDy enfotceable demand 

for Information referred to in paragraphs 14(a}(i), 00 and ~li) 

above prior to complying wHh such demand and will assert 

such appropriate legal exemptions or privileges as may be 

available. 

15. Consultation Regarding Mutual Assistance and the Exchange 

of lnfonnation 

(a) In any case of dispute tNer the mterpJBtation of this statement 

of Intent, the Authorities wll consul each other with a view to 

reaching a mutualy acceptabfe interpretation. · 

(b) The Authorities will consult with each other regarding this 

Statement of Intent with a view to improving ifs operation 

and resolving any matters that may arise. In parti~lar~ the 

Authorities wll consult in the event of: 

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(i) an Authority's denial of a request made by the other 

Authority pursuant to this Statement of Intent; 

(ii) a change in Market or business conditions or in the 

material legislation governing the maners set forth in 

paragraph 5; and 

(iii) any other circumstance that makes it neGeS$Bry or 

appropriate to amend or extend this Statement of l.ntent 

in order to achieve its purposes. 

(c) The Authorities may decide on such pracUcal measures as 

may be necessary to facUitate the implementation of this 

Statement of Intent 

(d) Any of the co~itions of this Statement of Intent may be 

amended or waived by mutual written consent 

16. Unsolicited Asalatance 

OTHERS 

To the extent pennitted by the laws and Regulations of its 

respective jurisdiction. each Authority wil make reasonable efforts 

to provide the other Authority with any information it discovers that 

gives rise to a suspicion of a breach or an anticipated breach of the 

Laws and Regulations applicable Jn the jurisdiction of the other 

Authority. 

17. Starling Date of Operation 

Cooperation. consultation and the exchange of information in 

accordance with this Statement of Intent wRI begin on the date of its 

signing by the Authorities. 

18. Termination 

CooperatiOn. consuHation and the exchange of information in 

accordance with this Statement of Intent continues until 3D days. 

after any Authority gives written notice to the other Authormea of its 

intention to discontinue cooperation and assistance hereunder. If 

either the CFTC or the SEC gives such notice, cooperation undet 

this Statement of Intent wil continue with respect to the other two 

Authorities. If any Authority gives the written notice mentioned in 

the above, cooperation and assistance In accordance with this 

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Statement of Intent win continue with respect to all requests for 

assistance that were made or information provided before the 

effective date of notification (as indicated in the notice but no eariier 

than the date the notice is sent) untiJ the Requesting Authority 

terminates the matter for which assistance was requested. 

SIGNED at Washington and Tokyo 

FOR THE SECURITIES 

AND EXCHANGE COMMISSION . 

OF THE UNITED STATES: 

~~~i7~ 

Z/"~IJO? FOR THE COMMODITY FUTURES 

TRADING COMMISSION 

OF THE UNITED S't TES: 

8 

FOR THE FINANCIAL 

SERVICES AGENCY 

OF JAPAN: 

DATE: li fhtag~ ZPIIZ 
APPENDIX A 

-CONTACT OFFICERS 

US Securities and Exchange Comm;sslon 

450 5th Street, N.W. 

Washington D.C 20549 

USA 

For al information: 

Director of International Affairs 

Tel: (202) 942-2770 

Fax: {202)942~24 

US Commodity Futurea Trading Commission 

Three Lafayette Centre 

1155 21st Street, NW 

Washington, DC 20581 

USA 

For all infomiation: 

Director. Division of Enforcement 

Chief Counsel, Division of Enforcement 

Tel: (202) 418-5320 

Fax: (202)418-5523 

Financial Services Agency 

3 .. 1 .. 1, Kasumigasekl, Chiyoda-ku 

Tokyo 100-8987 

JAPAN 

For all information:. 

Director for International Financial Markets 

International Affairs Division 

Tel: {81)-3-3506-6206 

Fax: (81 )-3-3508-6113 

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