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# This English translation of the Commodity Exchange Act has been prepared (up to the revisions of Act No. 50 of 2006 (Yet to enter into force)) in compliance with the Standard Bilingual Dictionary (March 2006 edition). This is an unofficial translation. Only the original Japanese texts of laws and regulations have legal effect, and the translations are to be used solely as reference material to aid in the understanding of Japanese laws and regulations. The Government of Japan shall not be responsible for the accuracy, reliability or currency of the legislative material provided in this Web site, or for any consequence resulting from use of the information in this Website. For all purposes of interpreting and applying law to any legal issue or dispute, users should consult the original Japanese texts published in the Official Gazette.
Commodity Exchange Act (Act No. 239 of August 5, 1950)
Chapter 1 General Provisions
Article 1 (Purpose)
The purpose of this Act is to ensure fairness in the price formation, buying and selling and other transactions in connection with commodities and in the acceptance of consignment of Transactions on Commodity Markets, etc. and to facilitate the production and distribution of Commodities by ensuring the sound management of Commodity Exchanges, ensuring the proper management of the business of persons who accept consignment of Transactions on Commodity Markets, etc. and by achieving other conditions through making stipulations about the organization of Commodity Exchanges, management of Transactions on Commodity Markets and other matters, thereby contributing to the appropriate management of the national economy and to the protection of customers of Transactions on Commodity Markets, etc.
Article 2 (Definitions)
(1) The term "Commodity Exchange" as used in this Act shall mean a Member Commodity Exchange and an Incorporated Commodity Exchange.
(2) The term "Member Commodity Exchange" as used in this Act shall mean an association with a membership system that has been established based on this Act with the main purpose of opening necessary markets for carrying out Futures Transactions of Commodities or Commodity Indices.
(3) The term "Incorporated Commodity Exchange" as used in this Act shall mean a business corporation that opens the necessary markets for carrying out Futures Transactions of Commodities or Commodity Indices by obtaining the license set forth in Article 78.
(4) The term "Commodity" as used in this Act shall mean the following goods:
(i) Agricultural products, forest products, livestock products, fishery products and goods manufactured or processed by using these products as ingredients or materials which are edible or potable, and other goods specified by a Cabinet Order
(ii) Minerals prescribed in Article 3, paragraph 1 of the Mining Act (Act No. 289 of 1950) and other minerals specified by a Cabinet Order, and goods obtained by smelting or refining these minerals
(iii) In addition to what is listed in the preceding two items, ingredients or materials important for the national economy which are specified by a Cabinet Order as goods that are highly likely to be made subject to transactions similar to Futures Transactions as a result of the extreme fluctuation of their prices (including those that are already made subject to Futures Transactions or transactions similar thereto)
(5) The term "Commodity Index" as used in this Act shall mean a numerical value that comprehensively expresses the price level of two or more goods that are Commodities.
(6) The term "Listed Commodity" as used in this Act shall mean one or two or more goods that are Commodities which a Commodity Exchange specifies in its articles of incorporation as those which should be traded on a single Commodity Market and which pertain to the permission under Article 9, the license under Article 78 or the approval under Article 155, paragraph 1.
(7) The term "Listed Commodity Index" as used in this Act shall mean one or two or more Commodity Indices which a Commodity Exchange specifies in its articles of incorporation as being those where relevant transactions should be carried out on a single Commodity Market and which pertain to the permission under Article 9, the license under Article 78 or the approval under Article 155, paragraph 1.
(8) The term "Futures Transactions" as used in this Act shall mean the following transactions carried out on a Commodity Market in accordance with the standards and methods specified by a Commodity Exchange:
(i) Buying and selling transactions where parties agree to transfer between them a Commodity and the consideration therefor at a certain time in the future and where a resale or buy-in of the Commodity subject to said buying and selling can be settled by exchanging the difference
(ii) Transactions where parties agree to transfer between them money calculated on the basis of the difference between the price of a Commodity agreed between the parties in advance (hereinafter referred to as the "Contract Price") and the actual price of said Commodity at a certain time in the future
(iii) Transactions where parties agree to transfer between them money calculated on the basis of the difference between the numerical value of a Commodity Index agreed between the parties in advance (hereinafter referred to as the "Contract Index") and the actual numerical value of said Commodity Index at a certain time in the future
(iv) Transactions where parties agree that, on the manifestation of intention by one of the parties, the counterparty grants said party a right to establish any of the following transactions between the parties (hereinafter referred to as an "Option") and said party pays the consideration therefor:
(a) Transactions set forth in item 1
(b) Transactions set forth in item 2 (including equivalent transactions that are specified by a Commodity Exchange)
(c) Transactions set forth in the preceding item (including equivalent transactions that are specified by a Commodity Exchange)
(9) The term "Commodity Market" as used in this Act shall mean a market that a Commodity Exchange has opened for each single kind of Listed Commodity or Listed Commodity Index in order to carry out the transactions prescribed in the following items for the categories set forth respectively in those items:
(i) Commodity Market pertaining to a Listed Commodity-Transactions set forth in item 1 of the preceding paragraph or transactions set forth in item 2 of the same paragraph pertaining to said Listed Commodity
(ii) Commodity Market pertaining to a Listed Commodity Index-Transactions set forth in item 3 of the preceding paragraph pertaining to said Listed Commodity Index
(10) The term "Transactions on a Commodity Market" as used in this Act shall include the transactions set forth in the respective items of the preceding paragraph as well as the transactions prescribed in the following items which a Commodity Exchange has decided to carry out for the categories of Commodity Markets set forth respectively in those items pursuant to the provisions of its articles of incorporation:
(i) Commodity Market pertaining to a Listed Commodity-The following transactions:
(a) Transactions set forth in Paragraph 8, item 3 pertaining to a Commodity Index where the goods subject to the index are or include said Listed Commodity
(b) Transactions set forth in paragraph 8, item 4 relating to the transactions set forth in (a) or (b) of the same item pertaining to said Listed Commodity
(c) Transactions set forth in paragraph 8, item 4 relating to the transactions set forth in (c) of the same item pertaining to a Commodity Index where the goods subject to the index are or include said Listed Commodity
(d) Buying and selling transactions (excluding those that fall under the transactions set forth in paragraph 8, item 1; hereinafter the same shall apply in this item) of said Listed Commodity
(e) Transactions where parties agree that, with the manifestation of intention by one of the parties, the counterparty grants said party a right to close a buying or selling transaction between the parties for said Listed Commodity (hereinafter referred to as a "Spot Option") and said party pays the consideration therefor
(ii) Commodity Market pertaining to a Listed Commodity Index-Transactions set forth in paragraph 8, item 4 relating to transactions set forth in (c) of the same item pertaining to said Listed Commodity Index
(11) The term "Trading Participant" as used in this Act shall mean a person who may participate in Transactions on a Commodity Market opened by an Incorporated Commodity Exchange, based on the trading qualification granted pursuant to the provisions of Article 82, paragraph 1.
(12) The term "Business of Assuming Commodity Transaction Debts" as used in this Act shall mean the business of assuming the liabilities arising from Transactions on a Commodity Market.
(13) The term "Commodity Clearing Organization" as used in this Act shall mean a person who has received a license from or the approval of the competent minister pursuant to the provisions of Article 167 or Article 173, paragraph 1 with regard to engagement in the Business of Assuming Commodity Transaction Debts.
(14) The term "Clearing Participant" as used in this Act shall mean a person who acts as the counterparty in the Business of Assuming Commodity Transaction Debts by a Commodity Clearing Organization, based on the qualification granted pursuant to the provisions of Article 174, paragraph 1.
(15) The term "Commodity Clearing Transaction" as used in this Act shall mean a Transaction on a Commodity Market which a Clearing Participant carries out on consignment by a member or Trading Participant (hereinafter referred to as a "Member, etc.") of a Commodity Exchange pursuant to the provisions of the business rules of a Commodity Clearing Organization with the condition that said Commodity Clearing Organization is made to assume the liabilities arising from said transaction and that said Member, etc. closes said transaction by representing said Clearing Participant.
(16) The term "Transactions on a Commodity Market, etc." as used in this Act shall mean the following acts:
(i) Transactions on a Commodity Market
(ii) Acting as an intermediary for the consignment of the act set forth in the preceding item
(iii) Acting as an intermediary for the consignment of Commodity Clearing Transactions
(iv) Acting as an intermediary for the act set forth in the preceding item
(17) The term "Business of Accepting Consignment of Commodity Transactions" as used in this Act shall mean the business of accepting consignment of Transactions on a Commodity Market, etc. (excluding Commodity Clearing Transactions).
(18) The term "Futures Commission Merchant" as used in this Act shall mean a person who has received a license from the competent minister pursuant to the provisions of Article 190, paragraph 1 with regard to engagement in the Business of Accepting Consignment of Commodity Transactions.
Chapter 2 Commodity Exchange
Section 1 General Provisions
Article 3 (Restriction on business)
A Commodity Exchange shall not conduct any business other than the business of opening the necessary markets for carrying out Futures Transactions of Commodities or Commodity Indices and the appraisal of quality of the Listed Commodities, the issuance of publications, and other businesses incidental thereto.
Article 4 (Name or trade name)
(1) A Commodity Exchange shall use the characters "" (Torihikijo [Commodity Exchange]) in its name or trade name.
(2) No person other than a Commodity Exchange shall use in his/her name or trade name characters that are likely to mislead the public into believing that such person is a Commodity Exchange.
Article 5 (Restriction on the opening of a market)
(1) A Commodity Exchange shall not open a market other than the Commodity Markets prescribed by its articles of incorporation (including a Commodity Market where the expiration date specified by the articles of incorporation has passed).
(2) A Commodity Exchange shall not open two or more Commodity Markets for a single kind of Listed Commodity or Listed Commodity Index.
Article 6 (Prohibition of establishment of a facility similar to a Commodity Market)
(1) No person shall establish a facility for carrying out transactions that are similar to Futures Transactions with regard to Commodities or Commodity Indices (including indices similar thereto) (excluding exchange securities markets as prescribed in Article 2, paragraph 17 of the Securities Exchange Act [Act No. 25 of 1948] and the financial futures markets prescribed in Article 2, paragraph 3 of the Financial Futures Trading Act [Act No. 77 of 1988] opened by financial futures exchanges prescribed in paragraph 6 of the same Article).
(2) No person shall carry out transactions that are similar to Futures Transactions in the facilities set forth in the preceding paragraph.
Section 2 Member Commodity Exchange
Subsection 1 Establishment
Article 7 (Juridical personality)
(1) A Member Commodity Exchange shall be a juridical person.
(2) A Member Commodity Exchange shall not conduct business for the purpose of profit.
Article 8 (Address)
The address of a Member Commodity Exchange shall be at the location of its principal office.
Article 9 (Permission for establishment)
Any person who intends to establish a Member Commodity Exchange shall obtain the permission of the competent minister.
Article 10 (Requirements for establishment)
(1) In order to establish a Member Commodity Exchange, 20 or more persons who intend to become its members shall become the founders of each Commodity Market to be opened.
(2) With regard to the founders, the persons prescribed in the following items for the categories of Commodity Markets set forth respectively in those items shall constitute the majority of the founders of a single Commodity Market:
(i) Commodity Market pertaining to a Listed Commodity-Persons who have engaged commercially in the buying and selling of goods included in said Listed Commodity (hereinafter referred to as "Listed Commodity Component Products"), acted commercially as mediators, intermediaries or agents for the buying and selling, or engaged commercially in the production, the processing or the use (hereinafter referred to as the "Buying and Selling, etc.") of such goods for one year or more on a continuous basis
(ii) Commodity Market pertaining to a Listed Commodity Index-Persons who have engaged commercially in the Buying and Selling, etc. of goods subject to the Commodity Index (or Indices) pertaining to the Listed Commodity Index (hereinafter referred to as the "Products Underlying a Listed Commodity Index") for one year or more on a continuous basis
Article 11 (Articles of incorporation)
(1) The founders shall create the articles of incorporation of the Member Commodity Exchange, and if the articles of incorporation have been created in the form of a paper document, they shall apply their signatures or their names and seals thereto.
(2) The following matters shall be included in the articles of incorporation set forth in the preceding paragraph:
(i) Description of business
(ii) Name
(iii) Office address
(iv) Matters concerning the membership qualification
(v) Unit amount of the contribution and the time and method of its payment
(vi) Matters concerning membership and withdrawal of members
(vii) Matters concerning guarantee funds and clearing margins
(viii) Matters concerning the sharing of costs among members
(ix) Matters concerning audits of and sanctions against members
(x) Matters concerning the fixed number, term of office and appointment of officers
(xi) Matters concerning the general meeting of members
(xii) Matters concerning the binding effect that the articles of incorporation, market rules, brokerage contract rules and dispute resolution rules have on contracts between members concluded outside the Commodity Market
(xiii) The following matters concerning the Commodity Markets:
(a) Listed Commodity or Listed Commodity Index
(b) Types of transaction for each Listed Commodity or Listed Commodity Index
(c) Method of settlement of transactions
(xiv) Business year
(xv) Matters concerning appropriation of surplus and disposal of loss
(xvi) Method of Public Notice (which means the method by which the Member Commodity Exchange gives public notices [excluding those that shall be given through publication in an official gazette pursuant to the provisions of this Act or other Acts]; hereinafter the same shall apply)
(3) The amount of the cost of establishment that should be borne by a Member Commodity Exchange or of the remuneration that should be received by the founders shall not be binding unless it is included in the articles of incorporation.
(4) If the term of existence of a Member Commodity Exchange or the expiration date of a Commodity Market has been set, such term of existence or expiration date shall be included in the articles of incorporation of the Member Commodity Exchange, in addition to the matters listed in the respective items of paragraph 2.
(5) The articles of incorporation set forth in paragraph 1 may be created in the form of an Electromagnetic Record (which means a record created in an electronic form, magnetic form or any other form that cannot be recognized by human senses, which is provided for use in information processing by computers and which is specified by an ordinance of the competent ministry; hereinafter the same shall apply). In this case, a measure in lieu of the application of signatures or names and seals, which is specified by an ordinance of the competent ministry, shall be taken with regard to the information contained in said Electromagnetic Record.
(6) A Member Commodity Exchange may, in addition to the method of posting at the office of said Member Commodity Exchange, specify any of the following methods as the Method of Public Notice in its articles of incorporation:
(i) Publication in an official gazette
(ii) Publication in a daily newspaper which publishes matters on current events
(iii) Electronic Public Notice (which means, among Methods of Public Notice, the method of implementing a measure which makes the information that should be publicly notified available to many and unspecified persons by an Electromagnetic Device [which means the electromagnetic device prescribed in Article 2, item 34 of the Companies Act (Act No. 86 of 2005)] and which is prescribed in the same item; hereinafter the same shall apply)
(7) When a Member Commodity Exchange specifies in its articles of incorporation the fact that it will make the method set forth in item 3 of the preceding paragraph the Method of Public Notice, it is sufficient to specify in the articles of incorporation that Electronic Public Notice will be the Method of Public Notice. In this case, either of the methods set forth in item 1 or item 2 of the same paragraph may be specified as the Method of Public Notice for the case where a public notice cannot be given by Electronic Public Notice as a result of an accident or any other inevitable reasons.
(8) When a Member Commodity Exchange gives a public notice by Electronic Public Notice, it shall give the public notice by Electronic Public Notice on a continuous basis until the date prescribed in the following items for the categories of public notice set forth respectively in those items:
(i) Public notice against which objections may be stated within the period specified therein-The day on which said period expires
(ii) Public notice other than that set forth in the preceding item-The day on which one month has passed since the first publication of said public notice
(9) When a Member Commodity Exchange gives a public notice pursuant to the provisions of this Act or other Acts, the provisions of Article 940, paragraph 3, Article 941, Article 946, Article 947, Article 951, paragraph 2, Article 953 and Article 955 of the Companies Act shall apply mutatis mutandis. In this case, the phrase "Notwithstanding the provisions of the preceding two paragraphs, .... pursuant to these provisions" in Article 940, paragraph 3 of said Act shall be deemed to be replaced with "Notwithstanding the provisions of Article 11, paragraph 8 of the Commodity Exchange Act, .... pursuant to the same paragraph," the term "Article 440, paragraph 1" in Article 941 of the same Act shall be deemed to be replaced with "Article 68-3 of the Commodity Exchange Act" and any other technical replacement shall be specified by a Cabinet Order.
(10) In addition to the matters listed in the respective items of paragraph 2, matters that do not come into effect without being prescribed in articles of incorporation pursuant to this Act or other matters that do not violate this Act may be included in articles of incorporation of a Member Commodity Exchange.
Article 20 (Application for membership)
(1) When establishing a Member Commodity Exchange, the founders shall notify the following matters in advance to persons who intend to become its members:
(i) Matters included in the articles of incorporation
(ii) Names or trade names and addresses of the founders
(iii) Method, time limit and place for the payment of the contribution
(iv) The fact that the application for membership may be rescinded if an organizational general meeting fails to be held by a certain time
(2) After the establishment of a Member Commodity Exchange, its president shall notify the following matters to persons who intend to become its members:
(i) Date of establishment
(ii) Matters included in the articles of incorporation
(iii) Names and addresses of the officers
(iv) Method, time limit and place for the payment of the contribution
(3) A person who intends to become a member of a Member Commodity Exchange (including a founder) shall deliver to the founders (or the president, if after the establishment; the same shall apply in the following paragraph) a document containing that person's name and address, the number of units of contribution that person will make and the Listed Commodity or Listed Commodity Index that person intends to trade on the Commodity Market.
(4) With the consent of the founders, a person who intends to become a member of a Member Commodity Exchange may, in lieu of the delivery of the document set forth in the preceding paragraph, provide the matters that should be included in the document under the same paragraph by an Electromagnetic Device (which means a method using an electronic data processing system or a method using other information communications technology, which is specified by an ordinance of the competent ministry; hereinafter the same shall apply) pursuant to the provisions of a Cabinet Order. In this case, the person who intends to become a member shall be deemed to have delivered the document under the same paragraph.
Article 13 (Organizational general meeting)
(1) After creating the articles of incorporation, the founders shall invite persons to become members, and hold an organizational general meeting within five days from the day on which 10 days have elapsed from the time limit for the payment of the contribution prescribed in paragraph 1, item 3 of the preceding Article.
(2) The founders shall make a payment of the full amount of their contribution before an organizational general meeting.
(3) Approval of the articles of incorporation and decisions on other necessary matters for the establishment of the Member Commodity Exchange shall be made by resolution of an organizational general meeting.
(4) The articles of incorporation may be revised at an organizational general meeting; provided, however, that this does not apply to matters concerning membership qualification.
(5) A decision at an organizational general meeting shall be made by at least two-thirds of the votes of those present when at least half of the persons who intend to become members (limited to those who have completed the payment of the full amount of the contribution) are present.
(6) If a resolution has been made at an organizational general meeting with regard to its postponement or continuation, the provisions of Article 59, paragraph 8, main clause and paragraph 10 as applied mutatis mutandis pursuant to paragraph 8 of this Article shall not apply.
(7) Minutes shall be taken regarding the proceedings of an organizational general meeting pursuant to the provisions of an ordinance of the competent ministry.
(8) The provisions of Article 33 and Article 59, paragraph 8, main clause and paragraph 10 shall apply mutatis mutandis to an organizational general meeting, and the provisions of Article 830, Article 831, Article 834 (limited to the part pertaining to items 16 and 17), Article 835, paragraph 1, Article 836, paragraphs 1 and 3, Article 837, Article 838, Article 846 and Article 937, paragraph 1 (limited to the part pertaining to item 1 (e)) of the Companies Act (excluding the part pertaining to auditors) shall apply mutatis mutandis to an action for declaration of nonexistence or nullity of or an action for rescission of a resolution of an organizational general meeting. In this case, the phrase "the head office (in the case prescribed in item 1 (e) where the matters listed in the respective items of Article 930, paragraph 2 have been registered according to said resolution, the head office and the branch office pertaining to said registration)" in the same paragraph shall be deemed to be replaced with "the principal office of the Member Commodity Exchange (in the case prescribed in item 1 (e) where the matters listed in the respective items of Article 24, paragraph 2 of the Commodity Exchange Act have been registered according to said resolution, the principal office and the secondary office pertaining to said registration)."
Article 14 (Application for permission)
(1) Following an organizational general meeting, the founders shall include the following matters in a written application for the permission under Article 9 and submit it to the competent minister without delay:
(i) Name
(ii) Office address
(iii) Listed Commodity or Listed Commodity Index
(iv) Names and addresses of the officers
(v) Names or trade names of the members and the Listed Commodity or Listed Commodity Index on the Commodity Market where the members will carry out transactions
(2) The articles of incorporation, market rules, brokerage contract rules, dispute resolution rules, market transactions surveillance committee rules and other documents specified by an ordinance of the competent ministry shall be attached to the written application under the preceding paragraph.
Article 15 (Criteria for permission and hearing of opinions)
(1) If the competent minister finds that the application for the permission under Article 9 conforms to the following criteria, he/she shall give the permission:
(i) Sufficient volume of transactions shall be expected for carrying out the Futures Transactions of the Listed Commodity or Listed Commodity Index pertaining to the application fairly and smoothly and, in light of the status of the transactions of the Listed Commodity Component Products or the Products Underlying the Listed Commodity Index (hereinafter referred to as the "Listed Commodity Component Products, etc."), it shall be necessary and appropriate to establish a Member Commodity Exchange for carrying out said Futures Transactions in order to facilitate the production and distribution of the Listed Commodity Component Products, etc.
(ii) In the case of opening a Commodity Market pertaining to a Listed Commodity, the carrying out of transactions of the Listed Commodity Component Products on a single Commodity Market conforms to the criteria specified by a Cabinet Order as being appropriate in light of the status of the transactions of the persons who engage commercially in the Buying and Selling, etc. of Listed Commodity Component Products and any other circumstances of the economic activities pertaining to the Listed Commodity Component Products.
(iii) In the case of opening a Commodity Market by specifying two or more Commodity Indices as a single Listed Commodity Index, the majority of the goods subject to said two or more Commodity Indices shall be common goods.
(iv) The provisions of the articles of incorporation, market rules, brokerage contract rules, dispute resolution rules and market transactions surveillance committee rules do not violate laws and regulations, and the method or management of transactions, membership qualification, the maximum number of members if such maximum number is specified, matters concerning deposits if such obligation to deposit special collateral money is specified and other matters prescribed in the articles of incorporation, market rules, brokerage contract rules, dispute resolution rules or market transactions surveillance committee rules are appropriate and sufficient for ensuring the fairness of Transactions on the Commodity Market and protecting customers.
(v) The Member Commodity Exchange pertaining to the application will be organized in such a manner that conforms to the provisions of this Act.
(2) If an application for the permission under Article 9 falls under any of the following items, the competent minister shall not give the permission under the same Article notwithstanding the provisions of the preceding paragraph:
(i) If the founders include a person who falls under any of the following categories:
(a) An adult ward or a person under curatorship or a person who is treated the same as such a person under the laws and regulations of a foreign state
(b) A bankrupt who may not restore his/her rights or a person who is treated the same as such a person under the laws and regulations of a foreign state
(c) A person who has been sentenced to imprisonment or a severer punishment (including an equivalent punishment under the laws and regulations of a foreign state) or to a fine (including an equivalent punishment under the laws and regulations of a foreign state) pursuant to this Act or equivalent laws and regulations of a foreign state and for whom five years have not lapsed from the day on which execution of the sentence ended or from the day on which the sentence ceased to be executed
(d) A person whose permission under Article 9 or license under Article 78 or Article 167, Article 190, paragraph 1 or permission under Article 332, paragraph 1 or Article 342, paragraph 1 has been rescinded pursuant to the provisions of Article 159, paragraph 1 or 2, Article 186, paragraph 1 or 2, Article 235, paragraph 3, Article 236, paragraph 1 or Article 340, paragraph 1 (including the cases where it is applied mutatis mutandis pursuant to Article 345) and for whom five years have not lapsed from the day of the rescission, or a person whose similar permission or license in a foreign state obtained pursuant to the laws and regulations of said foreign state which are equivalent to this Act (including registration and other administrative dispositions similar to said permission or license; referred to as a "Permission, etc." in (f)) has been rescinded and for whom five years have not lapsed from the day of the rescission
(e) A person who has been expelled from a Commodity Exchange or an equivalent facility in a foreign state pursuant to the provisions of Article 160, paragraph 1 or the provisions of equivalent laws and regulations of a foreign state (including other equivalent administrative dispositions under the laws and regulations of a foreign state; the same shall apply in (g) and (h)) or whose trading qualification has been rescinded and for whom five years have not lapsed from the day of the expulsion or rescission
(f) Where the permission given to a Commodity Exchange under Article 9 or the license under Article 78 has been rescinded pursuant to the provisions of Article 159, paragraph 1 or 2, where the license granted to a Commodity Clearing Organization under Article 167 has been rescinded pursuant to the provisions of Article 186, paragraph 1 or 2, where the license granted to a Futures Commission Merchant under Article 190, paragraph 1 has been rescinded pursuant to the provisions of Article 235, paragraph 3 or Article 236, paragraph 1, or where the permission given to an Establisher of a Type 1 Specified Facility (which means the Establisher of a Type 1 Specified Facility prescribed in Article 331, item 2; hereinafter the same shall apply in this item) or an Establisher of a Type 2 Specified Facility (which means the Establisher of a Type 2 Specified Facility prescribed in Article 331, item 3; hereinafter the same shall apply in this item) which is a juridical person under Article 332, paragraph 1 or Article 342, paragraph 1 has been rescinded pursuant to the provisions of Article 340, paragraph 1 (including the cases where it is applied mutatis mutandis pursuant to Article 345), a person who was an officer of the Commodity Exchange, Commodity Clearing Organization, Futures Commission Merchant, Establisher of a Type 1 Specified Facility or Establisher of a Type 2 Specified Facility within 30 days prior to the day of the rescission and for whom five years have not lapsed from the day of the rescission, or where a juridical person that obtained a similar Permission, etc. in a foreign state is rescinded of the Permission, etc. pursuant to laws and regulations of a foreign state that are equivalent to this Act, a person who was an officer of said juridical person within 30 days prior to the day of the rescission and for whom five years have not lapsed from the day of the rescission
(g) Where a Member, etc. of a Commodity Exchange or a Member, etc. of a facility equivalent to a Commodity Exchange in a foreign state which is a juridical person has been expelled from the Commodity Exchange or the facility or where its trading qualification pursuant to an order under Article 160, paragraph 1 or equivalent laws and regulations of a foreign state has been rescinded, a person who was an officer of said juridical person within 30 days prior to the day of the expulsion or rescission and for whom five years have not lapsed from the day of the expulsion or rescission
(h) An officer who has been dismissed pursuant to an order under Article 159, paragraph 3, Article 160, paragraph 1, Article 186, paragraph 4 or Article 236, paragraph 2 or equivalent laws and regulations of a foreign state and for whom five years have not lapsed from the day of the dismissal
(i) A person for whom one year has not lapsed after receiving an order from a court under Article 328, paragraph 1 or an equivalent order from a court of a foreign state under laws and regulations of a foreign state
(j) A person set forth in Article 331, paragraph 1, item 3 of the Companies Act
(k) A minor that does not have the same legal capacity as an adult with regard to business whose statutory representative falls under any category of the persons from (a) to (j) inclusive
(l) A legal person whose officers include a person who falls under any category of the persons from (a) to (k) inclusive
(ii) If the written application or the documents that should be attached thereto includes a false entry regarding an important matter
(3) Where an application for the permission under Article 9 has been filed in which case the term of existence of a Member Commodity Exchange or the expiration date of a Commodity Market is included in the articles of incorporation, the competent minister shall, in lieu of the criterion set forth in paragraph 1, item 1, consider the criterion under the same paragraph to be that there will be no shortfall in the volume of transactions for carrying out Futures Transactions of the Listed Commodity or Listed Commodity Index pertaining to the application fairly and smoothly and that, in light of the status of the transactions of the Listed Commodity Component Products, etc., establishment of a Member Commodity Exchange for carrying out said Futures Transactions does not or is not likely to cause extreme hindrance to the production and distribution of the Listed Commodity Component Products, etc., and he/she shall apply such criterion and the criteria under items 2 and 3 of the same paragraph by making a determination for said term of existence or for the period until said expiration date.
(4) The competent minister shall not give the permission under Article 9 until after three months have passed from the day of the public notice under Article 352 (limited to the part pertaining to item 3).
(5) If the competent minister finds that an application for the permission under Article 9 fails to conform to any of the items of paragraph 1 or that it falls under any of the items of paragraph 2, he/she shall notify the applicant to that effect in advance, seek to have the applicant or an agent thereof appear, and have officials of the ministry hear the opinions of such person in order to give such person an opportunity for producing evidence for explanation.
(6) In the case referred to in the preceding paragraph, if the person whose opinions are to be heard fails to take part in the hearing of opinions without a justifiable reason, the competent minister shall not be required to hear the opinions of such person.
(7) In the case of giving the notice set forth in paragraph 5, the competent minister shall give such notice by clarifying the matters on which opinions will be heard and the place and date of the hearing of opinions.
(8) The hearing of opinions set forth in paragraph 5 shall be open to the public; provided, however, that this shall not apply if the competent minister finds it necessary in order to maintain the secrets concerning the business of the person whose opinions are to be heard or finds it necessary with respect to public interest.
(9) If the competent minister finds it necessary for the conduct of the hearing of opinions set forth in paragraph 5, he/she may seek a witness to appear and hear the opinions of the witness, seek a witness to submit opinions or a report, or seek a witness to appear and have the witness give an expert opinion.
(10) Where an application for the permission under Article 9 has been filed in which case the term of existence of a Member Commodity Exchange or the expiration date of a Commodity Market is included in the articles of incorporation, the competent minister shall issue a notice of permission or non-permission to the applicant within four months from the day of the public notice under Article 352 (limited to the part pertaining to item 3).
(11) If the competent minister has not issued the notice under the preceding paragraph within the period set forth in the same paragraph, the permission under Article 9 shall be deemed to have been given on the expiration date of such period.
Article 16 (Time of establishment and notification)
(1) A Member Commodity Exchange shall be established by registering its establishment.
(2) A Member Commodity Exchange shall notify the competent minister of its establishment within two weeks from the day of establishment.
Article 17 (Transfer of affairs to the president)
When the permission under Article 9 (including the case under Article 15, paragraph 11) has been given, founders shall transfer their affairs to the president without delay.
Article 18 (Application mutatis mutandis of the Companies Act)
(1) The provisions from Articles 53 to 56 inclusive of the Companies Act shall apply mutatis mutandis to the founders of a Member Commodity Exchange.
(2) The provisions of Part 7, Chapter 2, Section 2 (excluding Article 847, paragraph 2, Article 849, paragraph 2, item 2 and paragraph 5 and Article 851) of the Companies Act shall apply mutatis mutandis to an action for pursuing the responsibilities of the founders of a Member Commodity Exchange. In this case, the term "Ordinance of the Ministry of Justice" in Article 847, paragraphs 1 and 4 of the same Act shall be deemed to be replaced with "ordinance of the competent ministry" and other necessary technical replacement of terms shall be specified by a Cabinet Order.
(3) The provisions of Article 828, paragraph 1 (limited to the part pertaining to item 1) and paragraph 2 (limited to the part pertaining to item 1), Article 834 (limited to the part pertaining to item 1), Article 835, paragraph 1, Article 836, paragraphs 1 and 3, Articles 837 to 839 inclusive and Article 846 shall apply mutatis mutandis to an action for nullity of establishment of a Member Commodity Exchange.
Article 19 (Change of the name, etc. of an officer or member)
(1) When there is a change to the matters listed in Article 14, paragraph 1, item 4 or 5, a Member Commodity Exchange shall submit to the competent minister a written notification of change with a statement to that effect without delay.
(2) The written notification of change referred to in the preceding paragraph shall have a document attached which proves such a change and also the document specified by an ordinance of the competent ministry.
Article 20 (Registration of establishment)
(1) Registration of establishment of a Member Commodity Exchange shall be completed at the location of its principal office within two weeks from the day on which the permission under Article 9 has been given.
(2) For completing the registration referred to in the preceding paragraph, the following matters shall be registered:
(i) Purpose
(ii) Name
(iii) Office address
(iv) If the term of existence has or the grounds for dissolution have been specified, such term or grounds
(v) Total amount of contribution
(vi) Unit amount of contribution and the method of its payment
(vii) Name, address and qualification of the person who has the representation power
(viii) Method of Public Notice
(ix) If the provision of articles of incorporation under Article 11, paragraph 6 specifies Electronic Public Notice as the Method of Public Notice, the following:
(a) Matters necessary for allowing many and unspecified persons to receive the information to be publicly notified by Electronic Public Notice which are specified by an Ordinance of the Ministry of Justice
(b) If there is a provision of the articles of incorporation under the second sentence of Article 11, paragraph 7, such provision
Article 21 (Registration of a change)
(1) When a change occurs to any matters listed in the respective items of paragraph 2 of the preceding Article with regard to a Member Commodity Exchange, registration of the change shall be completed at the location of its principal office within two weeks.
(2) Notwithstanding the provisions of the preceding paragraph, it is sufficient to register the change to the matter set forth in paragraph 2, item 5 of the preceding Article as of the last day of each business year within four weeks from said last day.
Article 22 (Registration of relocation of the principal office to the jurisdictional district of another registry office)
When a Member Commodity Exchange has relocated its principal office to the jurisdictional district of another registry office, it shall complete registration of the relocation at the old location and complete registration of the matters listed in the respective items of Article 20, paragraph 2 at the new location within two weeks.
Article 23 (Registration of a provisional disposition to suspend execution of duties, etc.)
When an order for a provisional disposition to suspend the execution of duties of the person representing a Member Commodity Exchange or to appoint a person to act for said person has been issued or a decision has been made to change or rescind such provisional disposition, registration to that effect shall be completed at the location of the principal office of the Member Commodity Exchange.
Article 24 (Registration at the secondary office location)
(1) In any of the cases listed in the following items (excluding cases where the secondary office set forth in said items is located within the jurisdictional district of the registry office having jurisdiction over the location of the principal office), registration at the secondary office location shall be completed at the location of such secondary office within the period specified in the respective items:
(i) When a secondary office was established upon establishment of a Member Commodity Exchange (excluding the case set forth in the following item)-Within two weeks from the day on which the registration of establishment at the location of the principal office has been completed
(ii) When a secondary office was established by a Member Commodity Exchange established by an incorporation-type merger upon such consolidation-Within three weeks from the day set forth in Article 147-2, paragraph 1
(iii) When a secondary office was established after the establishment of a Member Commodity Exchange-Within three weeks from the day of establishment of the secondary office
(2) For completing the registration at the second office location, the following matters shall be registered; provided, however, that it is sufficient to register the matter set forth in item 3 when a new secondary office has been established within the jurisdictional district of the registry office having jurisdiction over the location of a secondary office:
(i) Name
(ii) Location of the principal office
(iii) Location of the secondary office (s) (limited to those located within the jurisdictional district of the registry office having jurisdiction over said secondary office)
(3) When a change occurs to any matters listed in the respective items of the preceding paragraph, registration of the change shall be completed at the location of said secondary office within three weeks.
Article 24-2 (Registration of relocation of a secondary office to the jurisdictional district of another registry office)
When a Member Commodity Exchange has relocated its secondary office to the jurisdictional district of another registry office, it shall complete registration of the relocation at the old location (excluding the case where it is within the jurisdictional district of the registry office having jurisdiction over the location of the principal office) within three weeks and complete registration of the matters listed in the respective items of paragraph 2 of the preceding Article at the new location (excluding the case where it is within the jurisdictional district of the registry office having jurisdiction over the location of the principal office; hereinafter the same shall apply in this Article) within four weeks; provided, however, that it is sufficient to register the matter set forth in item 3 of the same paragraph at the new location when a new secondary office has been established within the jurisdictional district of the registry office having jurisdiction over the location of a secondary office.
Article 25 (Competent registry office and registry)
(1) Affairs concerning registration of a Member Commodity Exchange shall be the responsibility of the Legal Affairs Bureau or the District Legal Affairs Bureau having jurisdiction over the location of the office of the Member Commodity Exchange or a branch office or a sub-branch office of such bureau as the competent registry office.
(2) A registry office shall keep a Member Commodity Exchange registry.
Article 26 (Application for registration of establishment)
(1) Registration of establishment of a Member Commodity Exchange shall be made through the filing of an application by the person representing a Member Commodity Exchange.
(2) A written application for registration of establishment of a Member Commodity Exchange shall have a document attached proving the qualification of the person representing a Member Commodity Exchange.
Article 27 (Application for registration of a change)
A written application for registration of a change to any matters listed in the respective items of Article 20, paragraph 2 shall have a document attached proving the change to such matter.
Article 28 (Procedure for registration of nullity of establishment)
The provisions of Article 937, paragraph 1 (limited to the part pertaining to item 1 (a)) of the Companies Act shall apply mutatis mutandis to the case where a judgment affirming a claim pertaining to an action for nullity of establishment of a Member Commodity Exchange has become final and binding. In this case, the phrase "the head office of the company (in the case prescribed in item 1 (e) and where the matters listed in the respective items of Article 930, paragraph 2 have been registered, the head office and the branch office pertaining to said registration)" in the same paragraph shall be deemed to be replaced with "the principal office of the Member Commodity Exchange."
Article 29 (Application mutatis mutandis of the Commercial Registration Act)
The provisions of Articles 2 to 5 inclusive, Articles 7 to 15 inclusive, Articles 17 to 23-2 inclusive, Article 24 (excluding items 15 and 16), Articles 25 to 27 inclusive, Article 48 to 53 inclusive and Articles 132 to 148 inclusive of the Commercial Registration Act (Act No. 125 of 1963) shall apply mutatis mutandis to registration of a Member Commodity Exchange. In this case, the phrase "the respective items of Article 930, paragraph 2 of the Companies Act" in Article 48, paragraph 2 of the same Act shall be deemed to be replaced with "the respective items of Article 24, paragraph 2 of the Commodity Exchange Act."
Subsection 2 Membership
Article 30 (Membership qualification)
(1) A person having the membership qualification for a Member Commodity Exchange shall be limited to the following persons:
(i) A person who engages commercially in the Buying and Selling, etc. of Listed Commodity Component Products, etc. (including items that are the main ingredient or material of the Listed Commodity Component Products, etc. or items where the main ingredient or material is the Listed Commodity Component Products, etc. which are specified by articles of incorporation; the same shall apply in the following paragraph) of the Member Commodity Exchange
(ii) A Futures Commission Merchant
(iii) In addition to the persons listed in the preceding two items, a person that satisfies the requirements specified by a Cabinet Order as one who contributes to fair price formation of Listed Commodity Component Products, etc.
(2) In the event that a member dies, the member's heir shall be deemed to have had the membership qualification from the time of the death of the decedent if, by the day on which three months have passed from the day of the death of the decedent, the heir has engaged commercially in the Buying and Selling, etc. of Listed Commodity Component Products, etc. of the Commodity Market in which the decedent had been carrying out transactions in the case where the decedent had been a person who fell under item 1 of the preceding paragraph, or the heir has become a person who falls under item 3 of the same paragraph in the case where the decedent had been a person who fell under the same item.
(3) In the case referred to in the preceding paragraph, if there are two or more heirs, the provision of the same paragraph shall apply to only one heir who has been selected with the consent of all the heirs.
Article 31 (Disqualifying conditions)
(1) A person who falls under any of the category of persons in Article 15, paragraph 2, (a) to (l) inclusive may not be a member.
(2) A juridical person surviving a merger or a juridical person established by a merger shall be deemed to be the same juridical person as that which was extinguished as a result of the merger with regard to application of the provisions of the preceding paragraph (limited to the part pertaining to Article 15, paragraph 2, item 1, (c) to (e) inclusive, (i) and (l)).
Article 32 (Contribution)
(1) A member shall make one or more units of contribution.
(2) Contribution may not be made by using any property other than money.
(3) The unit amount of contribution shall be uniform.
(4) The members shall be liable for the debts of a Member Commodity Exchange in that they bear the costs under Article 34 and bear the amount of loss under Article 45, paragraph 3 within the limit of the amount of their contribution.
(5) A member may not assert against a Member Commodity Exchange a set-off for payment of contribution.
Article 33 (Voting right and right to elect)
(1) Each member shall have a single voting right and a right to elect officers irrespective of the number of units of contribution.
(2) A member may exercise a member's voting right or right to elect by a written ballot or a proxy regarding matters that were notified in advance pursuant to the provisions of Article 59, paragraph 8.
(3) A member may, in lieu of exercising a member's voting right by a written ballot under the preceding paragraph, exercise the voting right through an Electromagnetic Device pursuant to the provisions of the articles of incorporation.
(4) A person who exercises a voting right or right to vote pursuant to the provisions of the preceding two paragraphs shall be deemed to be present.
(5) A proxy shall submit a document proving the right of representation to the Member Commodity Exchange. In this case, if the articles of incorporation provide that the voting right may be exercised through an Electromagnetic Device, the proxy may prove the right of representation through the Electromagnetic Device in lieu of submission of said document.
Article 34 (Imposition of costs)
(1) A Member Commodity Exchange may impose costs on its members pursuant to the provisions of its articles of incorporation.
(2) The provisions of Article 32, paragraph 5 shall apply mutatis mutandis to the payment of costs under the preceding paragraph.
Article 35 (Membership)
(1) A person who intends to join a Member Commodity Exchange upon establishment of the Member Commodity Exchange and who has completed the payment of the full amount of his/her contribution shall become a member at the time of the establishment of the Member Commodity Exchange.
(2) A person who intends to join a Member Commodity Exchange upon the establishment of the Member Commodity Exchange who has not completed the payment prescribed in the preceding paragraph by the time of the establishment of the Member Commodity Exchange shall be deemed to have rescinded his/her application for membership at the time of the establishment of the Member Commodity Exchange.
(3) A person who intends to join a Member Commodity Exchange after establishment of the Member Commodity Exchange shall become a member when, pursuant to the provisions of the articles of incorporation, that person gains the consent of the Member Commodity Exchange regarding the membership and completes the payment of the full amount of his/her contribution and the payment of a membership fee if the Member Commodity Exchange has determined to collect a membership fee, or completes the acceptance of the whole or a part of the share of a member and the payment of a membership fee if the Member Commodity Exchange has determined to collect a membership fee.
(4) When a person having the membership qualification intends to join a Member Commodity Exchange, the Member Commodity Exchange shall not refuse membership without a justifiable reason.
Article 36 (Transfer of share)
(1) A member may transfer the whole or a part of the member's share to a person having the membership qualification pursuant to the provisions of the articles of incorporation.
(2) When a person having the membership qualification intends to accept a share, the acceptance shall be governed by the same rules as those for membership.
(3) The transferee of a share shall succeed to the rights and obligations of the transferrer with regard to that share.
Article 37 (Succession to the share)
(1) In the event that a member dies, if that member's heir or donee (hereinafter referred to as the "Heir, etc." in this Article) is a member, such person shall succeed to the share of the decedent and the rights and obligations of the decedent with regard to that share. In this case, the Heir, etc. shall notify the Member Commodity Exchange to that effect without delay.
(2) In the event that a member dies, if the Heir, etc. is a person having the membership qualification, such person may succeed to the share of the decedent and the rights and obligations of the decedent with regard to that share by gaining the consent of the Member Commodity Exchange regarding the membership within a period specified by the articles of incorporation.
(3) When the Heir, etc. has succeeded to the share of the decedent and the rights and obligations of the decedent with regard to that share pursuant to the provisions of the preceding paragraph, such person shall be deemed to have become a member at the time of the death of the decedent.
(4) In the case referred to in paragraph 1 or 2, if there are two or more Heirs, etc., the provision of these paragraphs shall apply to only one Heir, etc. who has been selected with the consent of all the Heirs, etc.
Article 38 (Prohibition of co-ownership of a share)
Members may not co-own a share.
Article 39 (Succession to the rights and obligations pertaining to transactions)
A person who has succeeded to the share of a member and the rights and obligations with regard to that share pursuant to the provisions of Article 37, paragraph 1 or 2 shall succeed to the rights and obligations pertaining to the transactions that said member has carried out on the Commodity Market.
Article 40 (Succession to member status)
In the event that a member merges, the juridical person surviving the merger or the juridical person established by the merger shall succeed to the member status.
Article 41 (Voluntary withdrawal)
(1) A member may withdraw from a Member Commodity Exchange by giving 30 days' notice in advance.
(2) The period of advance notice set forth in the preceding paragraph may be extended by the articles of incorporation; provided, however, that such period shall not exceed one year.
Article 42 (Involuntary withdrawal)
In addition to the cases prescribed in the preceding Article and Article 44, paragraph 1, a member shall withdraw from membership based on the following grounds:
(i) The person no longer falls under any of the items of Article 30, paragraph 1.
(ii) All of the Commodity Markets in which the person carries out transactions were closed pursuant to the provisions of Article 70.
(iii) Transfer of all of the member's share
(iv) Death or dissolution
(v) Expulsion
Article 43 (Expulsion)
(1) Expulsion of a member shall, except for expulsion pursuant to the provisions of Article 99, paragraph 5 and expulsion by an order of the competent minister under Article 160, paragraph 1, be conducted based on a resolution of a general meeting of members set forth in article 61 with regard to a member for whom a reason specified by the articles of incorporation exists.
(2) In the case referred to in the preceding paragraph, a Member Commodity Exchange shall send a document stating the effect of and the reason for the expulsion to such member by 10 days prior to the day of the general meeting of members and give such member an opportunity to explain at a general meeting of members.
(3) Unless the expulsion is notified to the expelled member, expulsion may not be asserted against such person.
Article 44 (Withdrawal due to attachment of the share)
(1) A creditor who has attached the share of a member may have such member withdraw from membership; provided, however, that the creditor shall give a notice to the Member Commodity Exchange and the member 30 days in advance.
(2) The advance notice referred to in the proviso of the preceding paragraph shall cease to be effective when the member set forth in the same paragraph repays the liabilities or provides reasonable collateral to the creditor set forth in the same paragraph.
(3) Attachment of the share of a member is also effective for the right to claim a refund of the share.
Article 45 (Refund of the share)
(1) A member who has withdrawn from membership may receive a refund of the whole or a part of the member's share.
(2) The share referred to in the preceding paragraph shall be decided according to the property of the Member Commodity Exchange on the last day of the month preceding the month in which the member withdrew from membership.
(3) When calculating the share referred to in the preceding paragraph, if the liability cannot be repaid in full using the property of the Member Commodity Exchange, the Member Commodity Exchange may claim from the withdrawn member payment of the amount of loss that should be borne by said member.
(4) The claim prescribed in paragraph 1 or the preceding paragraph shall be extinguished by prescription if not exercised for two years after the withdrawal.
(5) A Member Commodity Exchange may suspend the refund of the share until the withdrawn member repays the liability to the Member Commodity Exchange in full.
Subsection 3 Organ
Article 46 (Officers)
The following officers shall be placed at a Member Commodity Exchange:
One president
Two or more directors
Two or more auditors
Article 47 (Authority of the president and directors)
(1) The president shall represent the Member Commodity Exchange and preside over its affairs.
(2) The directors shall, pursuant to the provisions of the articles of incorporation, represent the Member Commodity Exchange, administer the affairs of the Member Commodity Exchange assisting the president, perform the duties of the president in his/her place when the president is unable to attend to his/her duties, and perform the duties of the president when the post is vacant.
(3) Execution of the affairs of a Member Commodity Exchange shall be decided by a majority vote of the president and directors unless otherwise specified by the articles of incorporation.
Article 47-2 (Delegation of the authority of the president and directors)
The president and directors may delegate their authority on a specified act to another person unless such delegation is prohibited by the articles of incorporation or a resolution of a general meeting of members.
Article 48 (Authority of the auditors)
(1) The auditors shall audit the affairs of the Member Commodity Exchange.
(2) The auditors may require the president or directors to report on the affairs or examine the status of the affairs and property of the Member Commodity Exchange at any time.
(3) The auditors shall examine the documents that the president intends to submit to a general meeting of members and report their opinions to the general meeting of members.
Article 49 (Disqualifying conditions for officers)
(1) A person who falls under any category of the persons in Article 15, paragraph 2, item 1, (a) to (k) inclusive may not be an officer of a Member Commodity Exchange.
(2) If an officer of a Member Commodity Exchange falls under any category of the persons prescribed in the preceding paragraph, that officer shall lose his/her position.
Article 50 (Appointment of officers)
(1) Officers of a Member Commodity Exchange shall, except for the directors appointed pursuant to the following paragraph, be elected by the members at a general meeting of members pursuant to the provisions of the articles of incorporation; provided, however, that the officers at the time of establishment shall be elected by persons who intend to become members at the organizational general meeting.
(2) Where special provisions exist in the articles of incorporation, the president shall appoint the number of directors specified by the articles of incorporation by gaining the consent of a majority of the directors.
Article 50-2 (Relationship between a Member Commodity Exchange and officers)
The relationship between a Member Commodity Exchange and its officers shall be in accordance with the provisions concerning delegation.
Article 51 (Term of office of officers)
(1) The term of office of an officer shall be a period of not more than three years as specified by the articles of incorporation.
(2) The term of office of an officer at the time of establishment shall, notwithstanding the provisions of the preceding paragraph, be a period decided at the organizational general meeting; provided, however, that such period shall not exceed one year.
Article 52 (Provisional director and provisional auditor)
The competent minister may, when there is no person to perform the duties of a director or auditor and if he/she finds it necessary, appoint a provisional director or provisional auditor.
Article 53 (Responsibilities of the president and directors)
(1) When the president or directors fail to perform their duties, such president or directors shall be held jointly and severally liable for damages against the Member Commodity Exchange.
(2) When the president or directors commit an act in violation of laws and regulations or the articles of incorporation, even if it resulted from a resolution of a general meeting of members, such president or directors shall be held jointly and severally liable for damages against third parties.
Article 54 (Request for dismissal of an officer)
(1) A member may request dismissal of an officer under the joint signature of at least one-fifth of all members. In this case, if there is consent of at least two-thirds of the members present at a general meeting of members with the presence of at least half of all members with regard to the request, the officer pertaining to the request shall lose his/her position.
(2) The request for dismissal prescribed in the preceding paragraph shall be made simultaneously for the president and all directors or all auditors; provided, however, that this shall not apply when requesting dismissal as a result of the violation of any laws and regulations, the articles of incorporation or market rules.
(3) The request for dismissal prescribed in paragraph 1 shall be made by submitting a document stating the reason therefor to the president.
(4) When a request for dismissal prescribed in paragraph 1 is made, the president shall refer the request to a general meeting of members and send the document prescribed in the preceding paragraph to the officer pertaining to the request by 10 days prior to the day of the general meeting of members, and give that officer an opportunity to explain at the general meeting of members.
(5) The provisions of Article 59, paragraphs 3, 6 and 7 shall apply mutatis mutandis to the case referred to in the preceding paragraph.
Article 55 (Prohibition of concurrent holding of positions by officers)
(1) An officer of a Member Commodity Exchange shall not hold the position of an officer of another Commodity Exchange.
(2) The president or a director shall not hold concurrently the position of an auditor of the Member Commodity Exchange where such person serves as the president or a director, and an auditor shall not hold concurrently the position of an employee or the president or a director of the Member Commodity Exchange where such person serves as an auditor.
Article 56 (Prohibition of self-contract, etc. of directors)
When a Member Commodity Exchange concludes a contract with the president or a director, an auditor shall represent the Member Commodity Exchange. The same shall apply to a suit between a Member Commodity Exchange and the president or a director.
Article 57 (Keeping of and inspection, etc. of articles of incorporation, etc.)
(1) A Member Commodity Exchange shall keep copies of the articles of incorporation and market rules at each office of the Member Commodity Exchange and keep a member register at its principal office.
(2) A Member Commodity Exchange shall keep copies of the minutes of general meetings of members at its principal office for 10 years and keep their transcripts at its secondary offices for five years.
(3) The following matters concerning each member shall be included in a member register:
(i) Name or trade name and address
(ii) Date of membership
(iii) Number of units of contribution, amount of contribution and date of its payment
(iv) Listed Commodity or Listed Commodity Index on the Commodity Market where the member carries out transactions
(v) In the case of a Futures Commission Merchant, the date of the grant of a license
(4) A member and a creditor of a Member Commodity Exchange may make the following request at any time during the business hours of the Member Commodity Exchange; provided, however, that in order to make the request set forth in item 2 or 4, such person shall pay a cost decided by the Member Commodity Exchange:
(i) A request for inspection of a document set forth in paragraph 1 or 2
(ii) A request for delivery of a transcript or extract of a document set forth in paragraph 1 or 2
(iii) Where an Electromagnetic Record has been created in lieu of the creation of a document in paragraph 1 or 2, a request for inspection of the matters contained in said Electromagnetic Record which are indicated by a method specified by an ordinance of the competent ministry
(iv) A request for provision of the matters contained in an Electromagnetic Record set forth in the preceding item by an Electromagnetic Device which is specified by an ordinance of the competent ministry or a request for delivery of a document stating such matters
(5) When a request prescribed in the preceding paragraph has been made, a Member Commodity Exchange shall not refuse the request without a justifiable reason.
Article 58 (Application mutatis mutandis of the Companies Act, etc.)
The provisions of Article 424 and Article 430 of the Companies Act shall apply mutatis mutandis to the president, directors and auditors, the provisions of Part 7, Chapter 2, Section 2 (excluding Article 847, paragraph 2, Article 849, paragraph 2, item 2 and paragraph 5 and Article 851) of the Act shall apply mutatis mutandis to an action for pursuing the responsibilities of the president, directors and auditors, the provisions of Article 349, paragraphs 4 and 5, Article 350, Article 354 and Article 361 of the same Act shall apply mutatis mutandis to the president and directors and the provisions of Article 53 shall apply mutatis mutandis to the auditors. In this case, the phrase "paragraph 1 of the preceding Article" in Article 424 of the same Act shall be deemed to be replaced with "Article 53, paragraph 1 of the Commodity Exchange Act," the term "an officer, etc." in Article 430 of the same Act shall be deemed to be replaced with "the president or a director," the term "another officer, etc." in the same Article shall be deemed to be replaced with "also an auditor," the term "an Ordinance of the Ministry of Finance" in Article 847, paragraphs 1 and 4 of the same Act shall be deemed to be replaced with "an ordinance of the competent ministry" and any other technical replacement shall be specified by a Cabinet Order.
Article 59 (Convocation of a general meeting of members)
(1) The president shall convene an ordinary general meeting of members once in every business year pursuant to the provisions of the articles of incorporation.
(2) The president may, if he/she finds it necessary, convene an extraordinary general meeting at any time pursuant to the provisions of the articles of incorporation.
(3) When a member requests the convocation of a general meeting of members by submitting a document stating the subject matter of the meeting and the reasons for the convocation to the president with the consent of at least one-fifth of all members, the president shall convene an extraordinary general meeting of members within 20 days from the day of such request.
(4) In the case referred to in the preceding paragraph, if the articles of incorporation provide that a voting right may be exercised through an Electromagnetic Device, the member may, in lieu of submission of a document under the same paragraph, submit the subject matter and reasons that should be stated in said document through the Electromagnetic Device. In this case, the member who has submitted the subject matter and reasons that should be stated in such document through the Electromagnetic Device shall be deemed to have submitted said document.
(5) Provision of the subject matter and reasons that should be stated in said document through an Electromagnetic Device (excluding any methods specified by an ordinance of the competent ministry) referred to in the first sentence of the preceding paragraph shall be deemed to have arrived with the president at the time when they have been recorded onto a file on a computer used by the president.
(6) When there is no person to perform the duties of the president or when a request set forth in paragraph 3 has been made but the president fails to implement the procedure of convocation without a justifiable reason, the auditors shall convene a general meeting of members without delay.
(7) In the case referred to in the preceding paragraph, when there is no person to perform the duties of an auditor or when the auditors fail to implement the procedure under the same paragraph without a justifiable reason, the member set forth in paragraph 3 may convene a general meeting of members by gaining the approval of the competent minister.
(8) In order to convene a general meeting of members, a notice of convocation shall be sent in writing to each member by 10 days prior to the day of the meeting; provided, however, that this period may be shortened according to the articles of incorporation with regard to the convocation prescribed in paragraphs 2, 3 and 6 and the preceding paragraph.
(9) The subject matter of the meeting shall be included in the notice set forth in the preceding paragraph.
(10) A person convening a general meeting of members may, in lieu of sending the notice in writing under paragraph 8, send such notice by an Electromagnetic Device with the consent of the members pursuant to the provisions of the articles of incorporation. In this case, the person convening a general meeting of members who sent said notice by the Electromagnetic Device shall be deemed to have sent the notice in writing under the same paragraph.
Article 60 (Matters that require a resolution of a general meeting of members)
(1) In addition to matters for which special provisions exist in this Act, the following matters shall require a resolution of a general meeting of members:
(i) Amendment of the articles of incorporation
(ii) Approval of the balance sheet, profit and loss statement, business report, proposed appropriation of surplus and proposed appropriation of loss
(iii) Method of imposition and collection of costs
(iv) Dissolution
(v) Merger
(vi) Expulsion of a member
(vii) Any other matters specified by the articles of incorporation
Article 61 (Matters that require a special resolution of a general meeting of members)
The matters listed in item 1 and items 4 to 6 inclusive of the preceding Article shall require resolution by at least a two-thirds majority vote of the members present when at least half of all members are present.
Article 62 (Decisions at a general meeting of members)
(1) Decisions at a general meeting of members shall, except when special provisions exist in this Act or the articles of incorporation, be made by a majority vote of the members present and by the chairperson in the event of a tie.
(2) The chairperson shall be appointed at a general meeting of members.
(3) The chairperson shall not be entitled to take part in a resolution of the general meeting of members as a member.
(4) Only the matters that have been notified in advance pursuant to the provisions of Article 59, paragraph 8 may be resolved at a general meeting of members; provided, however, that this shall not apply when otherwise provided for by the articles of incorporation.
(5) Minutes of a general meeting of members shall also be signed by the auditors present.
Article 62-2 (Resolution of adjournment or continuation)
If a resolution were made at a general meeting of members with regard to its adjournment or continuation, the provisions of Article 59, paragraph 8, main clause shall not apply.
Article 62-3 (Minutes)
Minutes shall be taken regarding the proceedings of a general meeting of members pursuant to the provisions of an ordinance of the competent ministry.
Article 63 (Application mutatis mutandis of the Companies Act)
The provisions of Article 830, Article 831, Article 834 (limited to the part pertaining to items 16 and 17), Article 835, paragraph 1, Article 836, paragraphs 1 and 3, Article 837, Article 838, Article 846 and Article 937, paragraph 1 (limited to the part pertaining to item 1 (e)) of the Companies Act shall apply mutatis mutandis to an action for the declaration of nonexistence or nullity of a resolution of a general meeting of members or an action for the rescission of a resolution of a general meeting of members. In this case, the phrase "the head office (in the case prescribed in item 1 (e) where the matters listed in the respective items of Article 930, paragraph 2 have been registered according to said resolution, the head office and the branch office pertaining to said registration)" in the same paragraph shall be deemed to be replaced with "the principal office of the Member Commodity Exchange (in the case prescribed in item 1 (e) where the matters listed in the respective items of Article 24, paragraph 2 of the Commodity Exchange Act have been registered according to said resolution, the principal office and the secondary office pertaining to said registration)."
Subsection 4 Account
Article 64 (Loss compensation reserve)
(1) A Member Commodity Exchange shall reserve at least one-hundredths of any surplus in every business year as a loss compensation reserve pursuant to the provisions of the articles of incorporation.
(2) The reserve set forth in the preceding paragraph shall not be broken into except in the case of allocating it to loss compensation.
Article 65 (Prohibition of distribution of surplus)
A Member Commodity Exchange shall not distribute its surplus.
Article 66 (Creation of Settlement related Documents, etc.)
(1) A Member Commodity Exchange shall create an inventory of property, a balance sheet, profit and loss statement, business report and proposed appropriation of surplus or proposed appropriation of loss (hereinafter referred to as "Settlement related Documents, etc.").
(2) Settlement related Documents, etc. may be created as an Electromagnetic Record.
Article 67 (Submission, etc. of Settlement related Documents, etc.)
The president shall submit or provide Settlement related Documents, etc. (including the Electromagnetic Record where such documents are created as an Electromagnetic Record or where an Electromagnetic Record has been created in lieu of creation of such documents) to auditors by two weeks prior to the day of an ordinary general meeting of members.
Article 68 (Approval and report of Settlement related Documents, etc.)
(1) Settlement related Documents, etc. (excluding the inventory of property and business report) shall require the approval of an ordinary general meeting of members.
(2) The president shall report the content of the business report to an ordinary general meeting of members.
Article 68-2 (Keeping of and inspection, etc. of Settlement related Documents, etc.)
(1) A Member Commodity Exchange shall keep the Settlement related Documents, etc. at its principal office for five years from the day two weeks prior to the day of an ordinary general meeting of members.
(2) A Member Commodity Exchange shall keep a copy of the Settlement related Documents, etc. at its secondary offices for three years from the day two weeks prior to the day of an ordinary general meeting of members; provided, however, that this shall not apply when the Settlement related Documents, etc. have been created as an Electromagnetic Record and a measure specified by an ordinance of the competent ministry as that for enabling a secondary office to respond to the requests listed in items 3 and 4 of the following paragraph has been taken.
(3) A member and a creditor of a Member Commodity Exchange may make the following requests to the Member Commodity Exchange at any time during its business hours; provided, however, that in order to make the request set forth in item 2 or 4, such person shall pay a cost decided by the Member Commodity Exchange:
(i) Where the Settlement related Documents, etc. have been created as written documents, a request for inspection of said document or its copy
(ii) A request for delivery of a transcript or extract of documents set forth in the preceding item
(iii) Where the Settlement related Documents, etc. have been created as an Electromagnetic Record, a request for inspection of the matters contained in said Electromagnetic Record which are indicated by a method specified by an ordinance of the competent ministry
(iv) A request for provision of the matters contained in an Electromagnetic Record set forth in the preceding item by an Electromagnetic Device which is specified by an ordinance of the competent ministry or a request for delivery of a document stating such matters
Article 68-3 (Public notice of the balance sheet)
A Member Commodity Exchange shall give public notice of its balance sheet without delay after conclusion of an ordinary general meeting of members.
Subsection 5 Dissolution and Liquidation
Article 69 (Dissolution of an Member Commodity Exchange)
A Member Commodity Exchange shall be dissolved based on the following grounds:
(i) Expiration of the term of existence or occurrence of grounds for dissolution specified by the articles of incorporation
(ii) Resolution of a general meeting of members
(iii) Merger (limited to a merger where the Member Commodity Exchange is extinguished as a result of the merger; the same shall apply in Articles 71 and 72)
(iv) Decision of commencement of bankruptcy proceedings
(v) Rescission of the permission for establishment
(vi) The number of members becomes 10 or less for all Commodity Markets
Article 70 (Closure of a certain Commodity Market)
A Member Commodity Exchange shall, when the number of members carrying out transactions on a Commodity Market it has opened becomes 10 or less, suspend the Transactions on said Commodity Market and apply for approval of an amendment of the articles of incorporation under Article 155, paragraph 1, in addition to the case of dissolution based on the reason set forth in item 6 of the preceding Article.
Article 71 (Liquidators)
When a Member Commodity Exchange dissolves, the president and directors become the liquidators except for the cases of dissolution based on a merger and a decision of commencement of bankruptcy proceedings; provided, however, that this shall not apply when another person has been appointed at a general meeting of members.
Article 71-2 (Distribution of residual assets)
The residual assets shall be distributed according to the number of units of contribution of the members.
Article 72 (Registration of dissolution)
When a Member Commodity Exchange dissolves, the dissolution shall be registered at the location of its principal office within two weeks except for the cases of dissolution based on a merger and a decision of commencement of bankruptcy proceedings.
Article 73 (Registration of completion of liquidation)
When liquidation is completed, the completion of liquidation shall be registered at the location of the principal office within two weeks and at the location of the secondary offices within three weeks from the day of approval under Article 507, paragraph 3 of the Companies Act as applied mutatis mutandis pursuant to Article 77, paragraph 1 of this Act.
Article 74 (Application for registration of dissolution)
(1) A written application for registration of dissolution of a Member Commodity Exchange shall have a document attached proving the reason for the dissolution and when the president or a director representing the Member Commodity Exchange is not the liquidator, a document proving that a person is the liquidator representing the Member Commodity Exchange.
(2) Registration of liquidation in the case where a Member Commodity Exchange is dissolved by the competent minister's disposition to rescind the permission for establishment shall be made at the request of the competent minister.
Article 75 (Application for registration of completion of liquidation)
A written application for registration set forth in Article 73 shall have a document attached proving obtainment of the approval under Article 507, paragraph 3 of the Companies Act as applied mutatis mutandis pursuant to Article 77, paragraph 1.
Article 76 (Approval of a merger of a Member Commodity Exchange, etc.)
(1) A merger where Member Commodity Exchanges are all or part of the parties thereto (excluding a merger set forth in Article 145, paragraph 1) shall not come into effect without the approval of the competent minister having been obtained.
(2) When a Member Commodity Exchange is dissolved based on the following grounds, a person who was its representative shall notify the competent minister to that effect without delay:
(i) Expiration of the term of existence or occurrence of grounds for dissolution specified by the articles of incorporation
(ii) Resolution of a general meeting of members
(iii) Decision of commencement of bankruptcy proceedings
(iv) The number of members becomes 10 or less for all Commodity Markets
Article 77 (Application mutatis mutandis, etc. of the Companies Act, etc.)
(1) The provisions of Article 475 (excluding items 1 and 3), Article 476, Article 478, paragraphs 2 and 4, Article 479, paragraphs 1 and 4, Article 481, Article 482, paragraph 2, Article 483, paragraphs 4 to 6 inclusive, Article 484, Article 485, Article 492, paragraphs 1 to 3 inclusive, Articles 499 to 503 inclusive, Article 507, Article 868, paragraph 1, Article 869, Article 870 (limited to the part pertaining to item 2), Article 871, Article 872 (limited to the part pertaining to item 4), Article 874 (limited to the part pertaining to items 1 and 4), Article 875 and Article 876 of the Companies Act shall apply mutatis mutandis to liquidation of a Member Commodity Exchange. In this case, the term "an Ordinance of the Ministry of Justice" in Article 492, paragraph 1 and Article 507, paragraph 1 of the same Act shall be deemed to be replaced with "an ordinance of the competent ministry" and the phrase "give a public notice in an official gazette" in Article 499, paragraph 1 of the same Act shall be deemed to be replaced with "give a public notice."
(2) The provisions of Article 48, paragraphs 2 and 3, Article 50-2, Article 53, Articles 55 to 57 inclusive, Article 59, Article 62-3 and Articles 66 to 68-3 inclusive of this Act and Article 361, Article 424, Article 430, Article 599 and Article 600 of the Companies Act shall apply mutatis mutandis to the liquidators of a Member Commodity Exchange, and the provisions of Part 7, Chapter 2, Section 2 (excluding Article 847, paragraph 2, Article 849, paragraph 2, item 2 and paragraph 5 and Article 851) of the same Act shall apply mutatis mutandis to an action for pursuing the responsibilities of the liquidators of a Member Commodity Exchange. In this case, the phrase "an inventory of property, a balance sheet, profit and loss statement, business report and proposed appropriation of surplus or proposed appropriation of loss" in Article 66, paragraph 1 shall be deemed to be replaced with "an inventory of property, a balance sheet and business report," the term "paragraph 1 of the preceding Article" in Article 424 of the same Act shall be deemed to be replaced with "Article 53, paragraph 1 of the Commodity Exchange Act," the term "an Ordinance of the Ministry of Finance" in Article 847, paragraphs 1 and 4 of the same Act shall be deemed to be replaced with "an ordinance of the competent ministry" and any other technical replacement shall be specified by a Cabinet Order.
(3) A court supervising the liquidation of a Member Commodity Exchange may seek the opinion of or request an investigation from the competent minister.
(4) The competent minister may state his/her opinion to the court prescribed in the preceding paragraph.
(5) The provisions of Article 71, paragraph 1 of the Commercial Registration Act shall apply mutatis mutandis to the registration of dissolution of a Member Commodity Exchange.
Section 3 Incorporated Commodity Exchange
Article 78 (License of an Incorporated Commodity Exchange)
An entity that intends to become an Incorporated Commodity Exchange shall obtain a license from the competent minister.
Article 79 (Application for a license)
(1) An entity that intends to obtain a license set forth in the preceding Article shall submit a written application stating the following matters to the competent minister:
(i) Trade name
(ii) Amount of stated capital
(iii) Location of the head office, branch offices and any other business offices
(iv) Listed Commodity or Listed Commodity Index
(v) Names and addresses of officers
(vi) Names or trade names of the Trading Participants and the Listed Commodity or Listed Commodity Index on the Commodity Market where the Trading Participants will carry out transactions
(2) The articles of incorporation, market rules, brokerage contract rules, dispute resolution rules, market transactions surveillance committee rules and other documents specified by an ordinance of the competent ministry shall be attached to the written application under the preceding paragraph.
Article 80 (Criteria for licensing, etc.)
(1) If the competent minister finds that the application for a license under Article 78 conforms to the following criteria, he/she shall grant the license:
(i) The applicant for a license is a business corporation of which the amount of stated capital is not less than an amount specified by a Cabinet Order.
(ii) The Commodity Market pertaining to the application conforms to the criteria prescribed in the following for the categories of Commodity Markets set forth respectively therein:
(a) Commodity Market pertaining to a Listed Commodity-The total number of Trading Participants that intend to carry out transactions on the Commodity Market is 20 or more and a majority of them are persons who have engaged commercially in the Buying and Selling, etc. of the Listed Commodity Component Products on the Commodity Market for one year or more on a continuous basis.
(b) Commodity Market pertaining to a Listed Commodity Index-The total number of Trading Participants that intend to carry out transactions on the Commodity Market is 20 or more and a majority of them are persons who have engaged commercially in the Buying and Selling, etc. of the Products Underlying the Listed Commodity Index on the Commodity Market for one year or more on a continuous basis.
(iii) Sufficient volume of transactions shall be expected for carrying out the Futures Transactions of the Listed Commodity or Listed Commodity Index pertaining to the application fairly and smoothly and, in light of the status of the transactions of the Listed Commodity Component Products, etc., it is necessary and appropriate for the applicant for a license to become an Incorporated Commodity Exchange for carrying out said Futures Transactions in order to facilitate the production and distribution of the Listed Commodity Component Products, etc.
(iv) In the case of opening a Commodity Market pertaining to a Listed Commodity, the carrying out of transactions of the Listed Commodity Component Products on a single Commodity Market conforms to the criteria specified by a Cabinet Order as being appropriate in light of the status of the transactions of the persons who engage commercially in the Buying and Selling, etc. of Listed Commodity Component Products and any other circumstances of the economic activities pertaining to the Listed Commodity Component Products.
(v) In the case of opening a Commodity Market by specifying two or more Commodity Indices as a single Listed Commodity Index, most of the goods subject to said two or more Commodity Indices are common goods.
(vi) The provisions of the articles of incorporation, market rules, brokerage contract rules, dispute resolution rules and market transactions surveillance committee rules do not violate laws and regulations, and the method or management of transactions, qualification of a Trading Participant, if the maximum number of Trading Participants is specified such maximum number, if obligation to deposit a special collateral money is specified matters concerning such deposit and other matters prescribed in the articles of incorporation, market rules, brokerage contract rules, dispute resolution rules or market transactions surveillance committee rules are appropriate and sufficient for ensuring the fairness of Transactions on the Commodity Market and protecting customers.
(vii) The applicant for a license has a personnel structure sufficient for appropriately managing the Commodity Market.
(viii) The applicant for a license is organized in such a way as to conform to the provisions of this Act as an Incorporated Commodity Exchange.
(ix) The applicant for a license has the following organs:
(a) Board of directors
(b) Board of corporate auditors or audit committee
(c) Accounting auditor
(2) If an application for a license under Article 78 falls under any of the following items, the competent minister shall not grant the license under the same Article notwithstanding the provisions of the preceding paragraph:
(i) If the applicant for a license falls under any category of the persons in Article 15, paragraph 2, item 1 (c) to (e) inclusive, (i) or (l)
(ii) If the written application or the documents that should be attached thereto includes a false entry regarding an important matter
(3) Where an application for the license under Article 78 has been filed in which case the term of existence of an Incorporated Commodity Exchange or the expiration date of a Commodity Market is included in the articles of incorporation, the competent minister shall, in lieu of the criterion set forth in paragraph 1, item 3, consider the criterion under the same paragraph to be that there will be no shortfall in the volume of transactions for carrying out Futures Transactions of the Listed Commodity or Listed Commodity Index pertaining to the application fairly and smoothly and that, in light of the status of the transactions of the Listed Commodity Component Products, etc., the obtainment of the status as an Incorporated Commodity Exchange for carrying out said Futures Transactions does not or is not likely to cause extreme hindrance to the production and distribution of the Listed Commodity Component Products, etc., and he/she shall apply such criterion and the criteria under items 4 and 5 of the same paragraph by making a determination for said term of existence or the period until said expiration date.
(4) The provisions of Article 15, paragraphs 4 to 11 inclusive shall apply mutatis mutandis to the license under Article 78.
Article 81 (Articles of incorporation)
(1) In addition to the matters listed in the respective items of Article 27 of the Companies Act, the following matters shall be included in the articles of incorporation of an Incorporated Commodity Exchange:
(i) Matters concerning audits of and sanctions against Trading Participants
(ii) Matters concerning the binding effect that the articles of incorporation, market rules, brokerage contract rules and dispute resolution rules have on contracts between Trading Participants concluded outside the Commodity Market
(iii) Following matters concerning the Commodity Markets:
(a) Listed Commodity or Listed Commodity Index
(b) Types of transactions for each Listed Commodity or Listed Commodity Index
(c) Method of settlement of transactions
(2) If the term of existence as an Incorporated Commodity Exchange or the expiration date of a Commodity Market has been set, such term of existence or the expiration date shall be included in the articles of incorporation of the Incorporated Commodity Exchange, in addition to the matters prescribed in the preceding paragraph.
Article 82 (Trading Participants of an Incorporated Commodity Exchange)
(1) Pursuant to the provisions of its market rules, an Incorporated Commodity Exchange may, for each Commodity Market it opens, grant the trading qualification for carrying out Transactions on said Commodity Market opened by said Incorporated Commodity Exchange to the persons prescribed in the following items for the categories of Commodity Market set forth respectively in those items:
(i) Commodity Market pertaining to a Listed Commodity-The following persons:
(a) A person who engages commercially in the Buying and Selling, etc. of Listed Commodity Component Products, etc. (including items that are the main ingredient or material of the Listed Commodity Component Products, etc. or items where the main ingredient or material is the Listed Commodity Component Products, etc. which are specified by the articles of incorporation) on the Commodity Market
(b) A Futures Commission Merchant
(c) In addition to the persons listed in (a) and (b), a person set forth in Article 30, paragraph 1, item 3 who satisfies the requirements specified by a Cabinet Order regarding his/her relationship with the Listed Commodity Component Products, etc. on the Commodity Market
(ii) Commodity Market pertaining to a Listed Commodity Index-The following persons:
(a) A person who engages commercially in the Buying and Selling, etc. of Products Underlying the Listed Commodity Index (including items that are the main ingredient or material of the Products Underlying the Listed Commodity Index or items where the main ingredient or material is the Products Underlying the Listed Commodity Index which are specified by the articles of incorporation) on the Commodity Market
(b) A Futures Commission Merchant
(c) In addition to the persons listed in (a) and (b), a person set forth in Article 30, paragraph 1, item 3 who satisfies the requirements specified by a Cabinet Order regarding his/her relationship with the Products Underlying the Listed Commodity Index on the Commodity Market
(2) An Incorporated Commodity Exchange shall not grant the trading qualification to a person who falls under any category of the persons in Article 15, paragraph 2, item 1 (a) to (l) inclusive.
(3) A juridical person surviving a merger or a juridical person established by a merger shall be deemed to be the same juridical person as that which has been extinguished as a result of the merger with regard to application of the provisions of the preceding paragraph (limited to the part pertaining to Article 15, paragraph 2, item 1, (c) to (e) inclusive, (i) and (l)).
Article 83 (Succession to the status of a Trading Participant)
In the event that a Trading Participant merges, the juridical person surviving the merger or the juridical person established by the merger shall succeed to the status of the Trading Participant.
Article 84 (Loss of trading qualification)
(1) A Trading Participant may lose the trading qualification granted pursuant to the provisions of Article 82, paragraph 1 by giving a 30 days' notice in advance.
(2) The period of advance notice set forth in the preceding paragraph may be extended by the market rules; provided, however, that such period may not exceed one year.
(3) In addition to the case prescribed in paragraph 1, a Trading Participant shall lose the trading qualification granted pursuant to the provisions of Article 82, paragraph 1 based on the following grounds:
(i) The person no longer falls under any of the items of Article 82, paragraph 1.
(ii) All of the Commodity Markets in which the person carries out transactions were closed pursuant to the provisions of Article 95.
(iii) Death or dissolution
(iv) Rescission of the trading qualification
Article 85 (Change of the name, etc. of an officer or Trading Participant)
(1) When there is a change to the matters listed in Article 79, paragraph 1, item 3, 5 or 6 (excluding the location of the head office), an Incorporated Commodity Exchange shall submit to the competent minister a written notification of change with a statement to that effect without delay.
(2) The written notification of change referred to in the preceding paragraph shall attach a document proving such a change and the document specified by an ordinance of the competent ministry.
Article 86 (Limitations on the holdings of voting rights)
(1) No person may acquire or possess voting rights (excluding the voting rights of the shares of stock which cannot be exercised for all matters that are subject to a resolution at a general meeting of shareholders and including the voting rights of the shares of stock for which the shareholder is deemed to have voting rights pursuant to the provisions of Article 879, paragraph 3 of the Companies Act; hereinafter the same shall apply in this Article and the following Article) exceeding five percent of the voting rights of all shareholders of an Incorporated Commodity Exchange (including the voting rights of the shares of stock which cannot be asserted against the issuer pursuant to the provisions of Article 147, paragraph 1 or Article 148, paragraph 1 of the Act on Transfer of Bonds, Shares, etc. [Act No. 75 of 2001] and excluding those specified by an ordinance of the competent ministry by taking into consideration the mode of acquisition or possession or any other relevant circumstances; hereinafter referred to as the "Subject Voting Rights" in this Article).
(2) The provisions of the preceding paragraph shall not apply when a person acquires or possesses Subject Voting Rights that exceed five percent of the voting rights of all shareholders of an Incorporated Commodity Exchange in the case where the number of Subject Voting Rights possessed has not changed or in any other case specified by an ordinance of the competent ministry; provided, however, that the person may not possess the portion of the Subject Voting Rights that exceeds five percent of the voting rights of all shareholders of the Incorporated Commodity Exchange for a period exceeding one year from the day on which the number was exceeded.
(3) With regard to application of the provisions of the preceding two paragraphs in the cases listed in the following paragraphs, the Subject Voting Rights specified in the respective items shall be deemed to be acquired or possessed:
(i) When a person has or will gain the authority to exercise Subject Voting Rights of an Incorporated Commodity Exchange or the authority to give instructions on the exercise of such voting rights based on the provisions of a money trust contract or other contract or Act Said Subject Voting Rights
(ii) When a person having a shareholder relationship, family relationship or other special relationship specified by a Cabinet Order acquires or possesses Subject Voting Rights of an Incorporated Commodity Exchange--The Subject Voting Rights acquired or possessed by said person having a special relationship
(4) Necessary matters concerning application of the provisions of the preceding 3 paragraphs shall be specified by a Cabinet Order.
Article 87 (Public inspection of the total number of issued shares of stock, etc.)
An Incorporated Commodity Exchange shall provide for public inspection the total number of its issued shares of stock, the number of voting rights of all shareholders and other matters specified by an ordinance of the competent ministry pursuant to the provisions of an ordinance of the competent ministry.
Article 88 (Approval of reduction of the stated capital)
(1) When an Incorporated Commodity Exchange intends to reduce the amount of its stated capital, it shall obtain the approval of the competent minister pursuant to the provisions of an ordinance of the competent ministry.
(2) When an Incorporated Commodity Exchange intends to increase the amount of its stated capital, it shall notify the competent minister pursuant to an ordinance of the competent ministry.
Article 89 (Provisional director, provisional corporate auditor, etc.)
(1) The competent minister may, when there is no person to perform the duties of a director, representative director, executive officer, representative executive officer or corporate auditor of an Incorporated Commodity Exchange and if he/she finds it necessary, appoint a provisional director, provisional representative director, provisional executive officer, provisional representative executive officer or provisional corporate auditor.
(2) The provisions of Article 346, paragraphs 2 and 3, Article 351, paragraphs 2 and 3 and Article 401, paragraphs 3 and 4 (including the case where they are applied mutatis mutandis pursuant to Article 403, paragraph 3 and Article 420, paragraph 3 of the Companies Act) of the Companies Act shall not apply to an Incorporated Commodity Exchange.
Article 90 (Registration by request of the competent minister)
(1) When the competent minister appoints a provisional director, provisional representative director, provisional executive officer, provisional representative executive officer or provisional corporate auditor pursuant to the provisions of paragraph 1 of the preceding paragraph, he/she shall request registration to that effect to the registry office at the location of the head office of the Incorporated Commodity Exchange.
(2) When the competent minister requests registration pursuant to the provisions of the preceding paragraph, he/she shall attach to a written request a document proving that he/she has given a disposition pertaining to the circumstances that caused said registration.
Article 91 (Prohibition of concurrent holding of positions by officers, etc.)
(1) An officer of an Incorporated Commodity Exchange shall not hold the position of an officer of another Commodity Exchange.
(2) The provision of the preceding paragraph shall apply mutatis mutandis to liquidators of an Incorporated Commodity Exchange.
Article 92 (Disqualifying conditions for officers)
The provisions of Article 49 shall apply mutatis mutandis to officers of an Incorporated Commodity Exchange.
Article 93 (Keeping of and inspection, etc. of market rules, etc.)
(1) An Incorporated Commodity Exchange shall keep its market rules at each business office of the Incorporated Commodity Exchange and keep a Trading Participant register at its head office.
(2) The following matters concerning each Trading Participant shall be included in a Trading Participant register:
(i) Name or trade name and address
(ii) Date of acquisition of the trading qualification
(iii) Listed Commodity or Listed Commodity Index on the Commodity Market where the Trading Participant carries out transactions
(iv) In the case of a Futures Commission Merchant, the date of grant of license
(3) The provisions of Article 57, paragraphs 4 and 5 shall apply mutatis mutandis to the market rules and Trading Participant register that are kept pursuant to the provisions of paragraph 1. In this case, the phrase "A member and a creditor of a Member Commodity Exchange" in paragraph 4 of the same Article shall be deemed to be replaced with "A shareholder, Trading Participant and creditor of an Incorporated Commodity Exchange," the phrase "during the business hours of the Member Commodity Exchange" in the same paragraph shall be deemed to be replaced with "during the business hours of the Incorporated Commodity Exchange," the phrase "decided by the Member Commodity Exchange" in the proviso of the same paragraph shall be deemed to be replaced with "decided by the Incorporated Commodity Exchange" and the term "Member Commodity Exchange" in paragraph 5 of the same Article shall be deemed to be replaced with "Incorporated Commodity Exchange."
(4) A Trading Participant of an Incorporated Commodity Exchange may make the requests listed in the respective items of Article 31, paragraph 2 of the Companies Act with regard to the articles of incorporation of an Incorporated Commodity Exchange; provided, however, that in order to make the request set forth in item 2 or 4, such person shall pay a cost decided by the Incorporated Commodity Exchange.
Article 94 (Lapse of license)
(1) When an Incorporated Commodity Exchange falls under any of the following items, the license under Article 78 shall cease to be effective:
(i) When the term of existence as an Incorporated Commodity Exchange specified by the articles of incorporation has expired
(ii) When the Incorporated Commodity Exchange transferred all of its business through a demerger or a business transfer
(iii) When the number of Trading Participants becomes 10 or less for all Commodity Markets
(iv) When the Incorporated Commodity Exchange has been dissolved
(v) When a judgment nullifying the establishment, a merger (limited to that where the entity established by said merger is an Incorporated Commodity Exchange) or an incorporation-type demerger (limited to that where the entity established by said incorporation-type demerger is an Incorporated Commodity Exchange) has become final and binding.
(2) When the license of an Incorporated Commodity Exchange lapses pursuant to the provisions of item 2, 3 or 5 of the preceding paragraph, a person who is or was its representative shall notify the competent minister to that effect without delay.
Article 95 (Closure of a certain Commodity Market)
An Incorporated Commodity Exchange shall, when the number of Trading Participants carrying out transactions on a Commodity Market it has opened becomes 10 or less, suspend the Transactions on said Commodity Market and apply for approval to amend the articles of incorporation under Article 155, paragraph 1, in addition to a case that falls under paragraph 1, item 3 of the preceding Article.
Article 96 (Approval of a merger of an Incorporated Commodity Exchange, etc.)
(1) The following matters shall not come into effect without the approval of the competent minister having been obtained:
(i) Resolution of a general meeting of shareholders with regard to the dissolution of an Incorporated Commodity Exchange
(ii) A merger where Incorporated Commodity Exchanges are all or part of the parties thereto (excluding a merger set forth in Article 145, paragraph 1)
(2) When an Incorporated Commodity Exchange is dissolved based on a reason other than the grounds listed in the preceding paragraph, a person who was its representative shall notify the competent minister to that effect without delay; provided, however, that this shall not apply to cases specified by an ordinance of the competent ministry.
Section 4 Transactions on a Commodity Market
Article 97 (Trading qualification)
(1) Transactions on a Commodity Market opened by a Member Commodity Exchange may only be carried out by a member of said Member Commodity Exchange who is also a person prescribed in the respective items of Article 82, paragraph 1 for the categories of Commodity Markets set forth respectively in those items.
(2) Transactions on a Commodity Market opened by an Incorporated Commodity Exchange may only be carried out by a Trading Participant of said Commodity Market.
(3) The provisions of the preceding two paragraphs shall not apply to the case of carrying out a Commodity Clearing Transaction on consignment from a member under paragraph 1 or a Trading Participant under the preceding paragraph.
Article 98 (Trading qualification pertaining to an Agreement on Intermarket Linkage)
(1) Notwithstanding the provisions of the preceding Article, a Commodity Exchange may, pursuant to the provisions of its articles of incorporation (the market rules in the case of an Incorporated Commodity Exchange; the same shall apply in paragraph 1 of the following Article, Article 100, Article 101, paragraph 1, Article 109, paragraph 1, Article 113, paragraph 1 [including its application pursuant to Article 114] and Article 114), grant to a Member, etc. of another Commodity Exchange (including a foreign facility equivalent to a Commodity Exchange; the same shall apply in the following paragraph) with which said Commodity Exchange has concluded an Agreement on Intermarket Linkage the qualification for carrying out Transactions on a Commodity Market of said Commodity Exchange within the scope of purpose of carrying out transactions for completing the settlement of transactions based on said Agreement on Intermarket Linkage.
(2) An Agreement on Intermarket Linkage prescribed in the preceding paragraph means an agreement under which said Commodity Exchange and a counterparty Commodity Exchange mutually recognize that the Members, etc. of the counterparty Commodity Exchange and the Members, etc. of said Commodity Exchange may, with regard to transactions of which settlement has not been completed on a Commodity Market (including a market in a foreign state equivalent to a Commodity Market; hereinafter the same shall apply in this paragraph) of the counterparty Commodity Exchange or a Commodity Market of said Commodity Exchange, respectively carry out transactions for completing the settlement of such transactions on a Commodity Market of said Commodity Exchange and on a Commodity Market of the counterparty Commodity Exchange.
(3) A person who has been granted the trading qualification by a Commodity Exchange based on the provisions of paragraph 1 shall be deemed to be a Member, etc. within the scope of the purpose prescribed in the same paragraph with regard to application of the provisions of Article 101, paragraphs 1 to 4 inclusive, Article 103, Article 104, paragraphs 3 and 4, Article 108, paragraph 1, Articles 113 to 115 inclusive, Article 118, Article 157, Article 159, paragraph 1, Article 160, paragraph 1, Article 165, Article 179 and Article 188. In this case, the phrase "withdrawn from" in Article 113, paragraph 1 (including the case of its application mutatis mutandis pursuant to Article 114 and Article 188) shall be deemed to be replaced with "lost the qualification to carry out transactions on" and the phrase "expulsion of" in Article 160, paragraph 1 and Article 165 shall be deemed to be replaced with "rescission of the qualification to carry out transactions of."
Article 99 (Amount of net assets of a Member, etc.)
(1) A Commodity Exchange shall specify for each Commodity Market the minimum amount of net assets of a Member, etc. carrying out transactions on said Commodity Market in its articles of incorporation, pursuant to the provisions of an ordinance of the competent ministry; provided, however, that this shall not apply when completing settlement by the method set forth in Article 105, paragraph 2 or 3 on said Commodity Market.
(2) When deciding the minimum amount of net assets of a Member, etc. pursuant to the provisions of the preceding paragraph, a Commodity Exchange shall specify the minimum amount of net assets of a Member, etc. carrying out transactions on two or more Commodity Markets or on a Commodity Market of another Commodity Exchange to be higher than the minimum amount of net assets of other Members, etc.
(3) When the amount of net assets of a Member, etc. falls below the minimum amount prescribed in the preceding two paragraphs, a Commodity Exchange shall suspend such person's Transactions on the Commodity Market and report to the competent minister to that effect without delay.
(4) In the case referred to in the preceding paragraph, if the amount of net assets of said Member, etc. reaches or exceeds the minimum amount prescribed in paragraph 1 or 2 within six months from the day of suspension of such person's Transactions on the Commodity Market, the Commodity Exchange shall cancel the suspension of the transactions under the preceding paragraph and report to the competent minister to that effect without delay.
(5) In the case referred to in paragraph 3, if the amount of net assets of a member or Trading Participant does not reach the minimum amount prescribed in paragraph 1 or 2 within the period prescribed in the preceding paragraph, the Commodity Exchange shall expel said member or rescind the trading qualification of said Trading Participant without delay.
(6) When a Commodity Exchange has suspended transactions pursuant to the provisions of paragraph 3 or expelled a member or rescinded the trading qualification of a Trading Participant pursuant to the provisions of the preceding paragraph, the Commodity Exchange shall notify such person to that effect without delay, indicating the reason therefor.
(7) The amount of net assets set forth in paragraphs 1 to 5 inclusive shall be an amount deducting the total amount of debts from the total amount of assets and shall be calculated pursuant to the provisions of an ordinance of the competent ministry.
Article 100 (Number of Members, etc.)
A Commodity Exchange may, for each Commodity Market, set an upper limit to the number of Members, etc. carrying out transactions on said Commodity Market or the number of Members, etc. carrying out transactions on the Commodity Market on consignment by stipulating such limit in its articles of incorporation.
Article 101 (Guarantee funds)
(1) A Member, etc. shall deposit with a Commodity Exchange guarantee funds for each Commodity Market on which the Member, etc. carries out transactions, pursuant to the provisions of articles of incorporation.
(2) A Member, etc. shall not carry out transactions on a Commodity Market until after depositing the guarantee funds set forth in the preceding paragraph.
(3) Securities (which means national government bond certificates, local government bond certificates and bond certificates issued by a juridical person pursuant to special Acts, corporate bond certificates and share certificates traded on a market opened by a Securities Exchange and other securities specified by a Cabinet Order) may be allotted for guarantee funds.
(4) The allocation price of the Securities set forth in the preceding paragraph shall not exceed a price calculated pursuant to the provisions of an ordinance of the competent ministry by taking into consideration the current market price.
(5) A person who has consigned Transactions on a Commodity Market to a Member, etc. who is a Futures Commission Merchant (referred to as a "Transaction Customer" in the following paragraph and Article 108, paragraph 2) shall, with regard to the guarantee funds of the Member, etc. for said Commodity Market, have the right to receive payment for the claims arising from such consignment in preference over other creditors.
(6) When rights to receive preferential payment set forth in the preceding paragraph conflict with each other, the right of a Transaction Customer who is not a Member, etc. shall take precedence over the right of a Transaction Customer who is a Member, etc.
(7) A Commodity Exchange shall not set off claims on a Member, etc. which it has gained through Business of Assuming Commodity Transaction Debts against its liabilities to said Member, etc. pertaining to guarantee funds.
Article 102 (Market rules)
A Commodity Exchange shall specify for each Commodity Market it opens detailed regulations on the following matters (excluding the matters listed in items 1 to 3 inclusive in the case of a Member Commodity Exchange) with regard to the Commodity Market in its market rules:
(i) Matters concerning Trading Participants
(ii) Matters concerning guarantee funds
(iii) Matters concerning clearing margins
(iv) Goods which are Commodities, Commodity Indices or Options (including Spot Options) subject to Transactions on the Commodity Market
(v) Period of a transaction
(vi) Start and end of a transaction
(vii) Suspension of a transaction
(viii) Matters concerning conclusion of transaction contracts and restraint thereof
(ix) Delivery and other settlement methods
(x) In addition to the matters listed in the preceding items, necessary matters concerning transactions
Article 103 (Clearing margin)
(1) A Commodity Exchange shall receive the deposit of a clearing margin from the persons prescribed in the following items for the categories set forth respectively in those items with regard to Transactions on a Commodity Market (limited to Transactions on a Commodity Market of which settlement is completed by the method set forth in Article 105, item 1 and excluding those set forth in Article 2, paragraph 10, item 1 (d); hereinafter the same shall apply in this Article) pursuant to the provisions of an ordinance of the competent ministry:
(i) When a Member, etc. carries out Transactions on a Commodity Market based on the Member, etc.'s own account or when a Member, etc. carries out Transactions on a Commodity Market for which the Member, etc. has accepted consignment (limited to those for which the Member, etc. has accepted consignment by obtaining the deposit of a customer margin based on the provisions of the following paragraph) Said Member, etc.
(ii) When a Member, etc. carries out Transactions on a Commodity Market for which the Member, etc. has accepted consignment (excluding those for which the Member, etc. has accepted consignment from a person acting as an intermediary for the consignment of such transactions [hereinafter referred to as an "Intermediary" in this Article]) (excluding the case set forth in the preceding item) Customer of said transactions (a person who consigned Transactions on a Commodity Market to the Member, etc. and who is not an Intermediary; the same shall apply in the following paragraph)
(iii) When a Member, etc. carries out Transactions on a Commodity Market for which the Member, etc. has accepted consignment (limited to those for which the Member, etc. has accepted consignment from an Intermediary who obtained the deposit of an intermediation margin based on the provisions of paragraph 3) (excluding the case set forth in item 1)--Said Intermediary
(iv) When a Member, etc. carries out Transactions on a Commodity Market for which the Member, etc. has accepted consignment (limited to those for which the Member, etc. has accepted consignment from an Intermediary) (excluding the cases set forth in item 1 and the preceding item)--The person who consigned the intermediation of the consignment of such transactions (hereinafter referred to as the "Intermediation Customer" in this Article)
(2) A Member, etc. may, with regard to accepting consignment of a Transaction on a Commodity Market, have the customer or the Intermediary (the Intermediation Customer in the case the transaction is one for which the Member, etc. has accepted consignment from an Intermediary who has not obtained the deposit of an intermediation margin based on the provisions of the following paragraph from the Intermediation Customer) deposit a customer margin with the Member, etc. by gaining the consent of such person, pursuant to the provisions of an ordinance of the competent ministry.
(3) An Intermediary may, with regard to accepting consignment of the intermediation of the consignment of Transactions on a Commodity Market, have the Intermediation Customer deposit an intermediation margin with the Intermediary by gaining the consent of such person.
(4) A Commodity Exchange shall manage the clearing margin deposited based on the provisions of paragraph 1, pursuant to the provisions of an ordinance of the competent ministry.
(5) The Securities prescribed in Article 101, paragraph 3 or a warehouse receipt proving retention of a Listed Commodity of a Commodity Market opened by said Commodity Exchange or another Commodity Exchange which can be made subject to delivery for settling Transactions on said Commodity Market may be allocated for the clearing margin under paragraph 1, the customer margin under paragraph 2 and the intermediation margin under paragraph 3.
(6) The provisions of Article 101, paragraph 4 shall apply mutatis mutandis to the allocation price of the Securities or warehouse receipt set forth in the preceding paragraph.
(7) In the case referred to in paragraph 2 or 3, a Member, etc. under paragraph 2 or an Intermediary under paragraph 3 (hereinafter referred to as a "Member, etc. or Intermediary" in this paragraph and paragraph 9) may, by gaining the approval of the competent minister, conclude a contract with a bank or other financial institution specified by an ordinance of the competent ministry (hereinafter referred to as a "Bank, etc.") to have an amount corresponding to the required clearing margin deposited with a Commodity Exchange on behalf of the Member, etc. or Intermediary in accordance with the instruction of the Commodity Exchange and notify the Commodity Exchange to that effect, pursuant to the provisions of an ordinance of the competent ministry.
(8) In the case referred to in the preceding paragraph, the Commodity Exchange may allow a grace period for deposit of the whole or a part of the clearing margin corresponding to the amount of money to be deposited with the Commodity Exchange under said contract, limited to the period during which said contract remains in force.
(9) When a Commodity Exchange finds it necessary for securing the fairness of Transactions on a Commodity Market or protecting customers, it shall instruct the Bank, etc. which has concluded a contract under paragraph 7 with a Member, etc. or Intermediary or instruct said Member, etc. or Intermediary to deposit with the Commodity Exchange an amount of money corresponding to the required clearing margin or the clearing margin for which a grace period was allowed for its deposit pursuant to the provisions of the preceding paragraph.
Article 104 (Grading of a Listed Commodity)
(1) The method of grading, the grade table and other matters concerning the grading of a Listed Commodity shall be specified by the market rules.
(2) In the case referred to in the preceding paragraph, when a specified national standard exists with regard to the grade of the Listed Commodity for Transactions on a Commodity Market, the Commodity Exchange shall comply with such standard.
(3) A Member, etc. shall comply with the grading conducted by a Commodity Exchange pursuant to the provisions of the market rules.
(4) In the case where it is necessary to appoint a grader, a Commodity Exchange shall appoint the grader from persons other than the Members, etc. of the Commodity Exchange.
(5) A grader set forth in the preceding paragraph shall be an employee of the Commodity Exchange; provided, however, that this shall not apply when the approval of the competent minister has been obtained.
Article 105 (Settlement of transactions)
Settlement of Transactions on a Commodity Market shall be completed for each Commodity Market