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The Tokyo Stock Exchange (hereinafter "TSE") has imposed disciplinary action (imposition of a JPY 5 million fine) against San-ei Securities Co.,Ltd. (hereinafter the "Company") pursuant to Rule 34, Paragraph 1, Item 8 of the Trading Participant Regulations.
Additionally, the TSE has requested the Company to submit a business improvement report pursuant to Rule 19 of the Trading Participant Regulations.
The business improvement report shall include:
(1) Implementing a fundamental overhaul of trading supervision systems and frameworks to ensure fair trading as well as implementing measures to prevent recurrence of similar acts for eliminating violations of laws and regulations;
(2) Implementing measures such as training in order to thoroughly strengthen awareness of all executives, officers and employees regarding compliance with laws and regulations; and
(3) Clarifying the locus of responsibility regarding the acts subject to this disciplinary action.
Outline of Violation
Act of conducting purchases, etc. of listed securities for the purpose of causing fluctuations in the prices of such listed securities
Two (2) dealers at Securities Department of the Company placed buy orders, etc. with limit prices at which they did not intend to execute trades with the aim of causing fluctuations in prices of many TSE-listed stocks in order to provide an advantage to their proprietary trading. Such dealers performed such action by methods such as soliciting orders from other market participants with regard to many such stocks in relation to their business during a period from April to December 2009 at the least.
The above acts conducted by the Company and the employees are acknowledged to fall under the "act of purchasing or applying for purchasing listed financial instruments, etc. with the aim of causing fluctuations in prices of such listed financial instruments, etc. in the financial instruments exchange market" as prescribed in Article 117, Paragraph 1, Item 19 of the Cabinet Office Ordinance on Financial Instrument Business, etc. under Article 38, Item 6 of the Financial Instruments and Exchange Act.
