JAPAN EXCHANGE GROUP, INC. Osaka Exchange, Inc. (OSE) and Tokyo Commodity Exchange, Inc. (TOCOM) have taken disciplinary action against Okayasu Shoji Co., Ltd. (hereinafter, the "Company") and have requested that the Company submit a business improvement report.
- Suspension of derivatives trading (excluding, however, settlement transactions for customers, transactions for the account of the broker's consignee, and other transactions separately approved by OSE) for the period from October 17 through October 19, 2022.
- Imposition of a JPY 50 million penalty
- ･The above disciplinary action was taken in accordance with Rule 42, Paragraph 1 of the OSE Trading Participant Regulations.
- ･In addition, OSE has requested the Company to submit a business improvement report pursuant to Rule 17, Paragraph 1 of the same Regulation.
- ･The decision on this case was made based on deliberations carried out by Japan Exchange Regulation.
From August 30, 2010 to February 28, 2022, the Company manipulated the calculation of its capital adequacy ratio to be higher than the actual value, not reflecting the actual status.
Accordingly, the Company reported to authorities the said capital adequacy ratio in the business reports provided for in Article 172, Paragraph 1 of the Cabinet Office Order on Financial Instruments Business, etc. (hereinafter, the "Cabinet Order") per Article 46-3, Paragraph 1 of the Financial Instruments and Exchange Act (hereinafter, the "Act"). In addition, the Company reported and disclosed publicly the said capital adequacy ratio in the supplementary document provided for in Article 174 of the Cabinet Order per Article 46-4 of the Act and in the document with the statement of the capital adequacy ratio provided for in Article 46-6, Paragraph 3, of the Act.
During a part of the said period, the capital adequacy ratio fell below the 120% limit provided for in Article 46-6, Paragraph 2 of the Act. In addition, the Company failed to file a notification as stipulated in Article 179, Paragraph 1, Item 1 of the Cabinet Order per Article 46-6, Paragraph 1 of the Act (where the capital adequacy ratio falls below 140%), and a report as stipulated in Article 5, Paragraph 1, Item 10-a of the Enforcement Rules of Regulations for Transaction Participants pursuant to Article 16 of the OSE Trading Participant Regulations (where the capital adequacy ratio falls below 140%).
Furthermore, at the time the product transfer from TOCOM to OSE was implemented in July 2020, the Company gained a Futures, etc. Trading Participant qualification at OSE. However, the capital adequacy ratio submitted in connection with the Company's application for said qualification was the one calculated in the manner described above, which did not reflect the actual status.
As a result, with regards to the acquisition of said trading qualification, the Company's actual capital adequacy ratio was found to be 118.7% (as of July 20, 2020, the approval date of the trading qualification), which was lower than the 120% or higher capital adequacy ratio required as of the grant date of the trading qualification.
- Imposition of a JPY 15 million penalty
- ･The above disciplinary action was taken in accordance with Article 153, Paragraph 1 of the TOCOM Market Rules.
- ･In addition, TOCOM has requested the Company to submit a business improvement report pursuant to Article 146, Paragraph 1 of the same Rules.
From January 4, 2011 to February 28, 2022, the Company manipulated its net assets regulation ratio to be higher than the actual value, calculating a ratio that does not reflect the actual status.
As a result, the Company fell under the case provided for in an ordinance of the competent ministry as stipulated in Article 211, Paragraph 1 of the Commodity Derivatives Transaction Act (hereinafter the "Commodity Act") (where the net assets regulation ratio is below 140%), but failed to file the notification to the competent minister stipulated in the same Paragraph, and also made false statements in the monthly report stipulated in Article 117, Paragraph 1, Item 1 of the Ordinance for Enforcement of the Commodity Derivatives Transaction Act per Article 224, Paragraph 2 of the Commodity Act, which it submitted to the competent minister.
- ･DISCLAIMER: This translation may be used for reference purposes only. This English version is not an official translation of the original Japanese document. In cases where any differences occur between the English version and the original Japanese version, the Japanese version shall prevail. This translation is subject to change without notice. Tokyo Stock Exchange, Inc., Osaka Exchange, Inc., Japan Exchange Group, Inc., and/or Japan Exchange Regulation shall individually or jointly accept no responsibility or liability for damage or loss caused by any error, inaccuracy, misunderstanding, or changes with regard to this translation.
Contact
Osaka Exchange, Inc./Tokyo Commodity Exchange, Inc. Trading Participant Office,
TEL:+81-(0)3-3666-0141 (Operator)
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Japan Exchange Group Inc. published this content on 28 September 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 September 2022 07:05:06 UTC.
