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The TSE censured SBI E*TRADE SECURITIES Co., Ltd. ("SBI E*TRADE") for violating?the Cabinet Office Ordinance on the Financial Instruments Business Item 5 Article 123 based upon the Financial Instruments and Exchange Act Item 2 Article 40. The TSE also requested SBI E*TRADE to submit a business improvement report requiring the company (?) to investigate the reason a market surveillance system for insider trading was not in place, and to implement specific remedies including a system for checking if market surveillance is functioning soundly ;??? to investigate the reason why some insiders failed to be registered, to clarify management problems in the management and operation of insider registration work, and to implement specific remedies including a system for checking this work; and???to raise awareness among directors and employees towards legal compliance, and to conduct necessary compliance training.
Nature of Violation
With regards to the SBI E*TRADE's management of customers' securities trading and other transactions, the company failed to register customers who were related to listed companies in its insider list, due to reasons such as the absence of an insider registration verification system.
In addition, SBI E*TRADE's market surveillance in terms of preventing unfair trading in?relation to company related information was insufficient.
The above is acknowledged to be a 'situation in which the necessary and appropriate measures for the prevention of unfair trading, in relation to company related information with respect to the management of customer's securities and other transactions, are deemed to not have been taken' as defined in on Item (5) Article 123 of the Cabinet Office Ordinance on the Financial Instruments Business, based upon Item (2) Article 40 of the Financial Instruments and Exchange Act.
