Online Security Trading@TYO Ikuo Takahashi Overview of the Laws and Regulations around the Market ( Investors Investors Investors ( ( ( Transaction rule( Brokers( Brokers rule( Market( Market rule disclosure Fair Trade rule Free Fair Global Synergy Effect of Network ( Liberalisation of the fees of stock sales to personal client(1999/10( Boom of the Online stock exchange(over the million accounts ( direct trading through the foreign Financial Service providers account( New Market (NASDAQ JAPAN,Mothers awareness of the corporate governance and stock holders Speed of information change the view of the market High volatility( 1 clarifying the rights and duties between parties ( transaction rule financial materials and terms of transactions disclosure/explanation and transferring of the risk ( distinguished account and freedom fron bankruptcy risk ( burden of the responsibilities by the conducts facing the conflicts of interests ( scope of the responsibilities by the fiduciary duties ( burden of the responsibilities between contributory or (Financial product sales law vicarious elements ( (Consumer Contract Law / (cancel/ nullifying (burden of proof 1
enactment of the Laws on sales of Financial products ( Traditional approach-demerit Laws on sales of Financial products Law provide information on the following important matters, including disclosure duty( those concerning risks of financial products ( Liability for damages caused by violation of information provision requirements ( Ensuring appropriate solicitation by financial service providers( disclosure duties Sales of Financial products Law ( 1 2 3 4 Online stock trading and explanation duties variety of products how to disclose the material facts? Ensuring appropriate solicitation by financial service providers financial service providers must endeavor to solicit for customers in an appropriate manner. ( manner. ( ( 7 Policy making( Publication( Amendment( Suitability rule( Consumer Contract Law ( ( avoid their declarations of intention ( nullifying clauses ( the gap in quality and quantity of information and in the negotiating power between consumers and business, 2
network security matters Actual practice Correction ( - - exemption clause (e.g. e.g. Ddos (2000 2 Legal point of the clause Mistakes at the transaction ( ( ( - ( "Laws on electronic Consumer contract" 2 Legal aspects of financial service provider Market Intermediaries rule - necessity and contents fit and proper 3
Legal approach to promote online trading Compliance architecture an improved reputation greater customer confidence (IT improved status with industry regulators lower cost of regulatory examinations better qualified sales Personnel more accurate sales materials ( increased customer satisfaction (ISP Corporate resources ( system planning Control audit implementation principle policies basic criteria education 3 Market rule and enforcement General Rule ( 157 157 1 185 examples 5 500 2000 4 7 4
Emulex (2000 8 25 Insider Trading ( Mark Simeon Jakob 23-1987 1989 166 167 ( 1998 - Material fact( Insider information on the Internet - 2 Influence by analyst ( SEC (2000 3 28 (2000 8 ( 5
Legal aspects of Financial advice Financial information homepages 2 1 1986 4 - - 4 disclosure of the company, cross border problems IR by Internet Disclosure duty of management ( (ENTU ENTU 2000 7 18 ( 8 7 5 (2 52 5 ( Legal aspects of Cross Border 6
Ex-territorial Effects Criminal effects( Civil aspects( 164 investors( administrative power( Protection of Japanese Investor in Foreign Market (163 (5 Applicable Law( Regulation towards activities to Jaspanese investors( comit@po.sphere. ne.jp http://www1.sphere.ne.jp/netlaw/finance/ 7