Market Surveillance/Monitoring for Unfair Transactions

4. Dealing With Violations

Update : Feb. 29, 2008

4. Dealing With Violations

Based on the results of administrative inspections, the Market Surveillance and Compliance Department issues punishments and warnings in response to any actions which, under the TSE's articles of incorporation and or rules and regulations, are recognized as unfair trades or as action which demonstrates a risk of becoming a violation.

For example, in cases where a trading participant is recognized as having violated a law or rule, said participant will be dealt with according to article 34 of the Trading Participant Regulations. Punishment may include revocation of trading qualifications, limiting trading, imposing penalty fees or issuing warnings, etc.

Also, in cases where a there is a recognized risk of a violation occurring, the Trading Participant is dealt with according to article 17 of the Business Regulations of Tokyo Stock Exchange Regulation , which may include warnings and requiring the submission of business improvement reports as needed.

Furthermore, if examination results indicate that a listed company has committed a violation, or the risk of a violation occurring is recognized, or if a company's systems for handling information are identified as insufficient for preventing violations, warnings, etc. will be issued to the company in accordance with article 18 of the aforementioned rules.

In conjunction with these actions, examination results are also reported to Securities and Exchange Surveillance Commission. This is done as a part of a rigorous collaborative effort to illuminate the unfair trading situation.