 |
Customer Protection |
|
 |
To secure customer assets against default and insolvency of broker members, the Exchange has the following system:
|
| Segregation of customer assets |
|
|
Broker members are required to separate customer assets from their own assets and deposit customer assets in the following forms in accordance with the Enforcement Regulations of the Commodity Exchange Law of Japan:
| (1) |
Deposit of customer assets with banking institutions as trust funds; |
| (2) |
Deposit of customer assets with National Futures Protection Fund; |
| (3) |
Making an agreement with banking institutions to satisfy financial obligations to customers; and/or |
| (4) |
Making a subrogation agreement with National Futures Protection Fund. |
It is mandatory that they keep the books classifying assets for Broker Member's proprietary account and those for customers' accounts.
|
| Monitoring financial standings and brokerage operations |
|
|
Financial surveillance of all members is conducted by the Exchange in conjunction with the regulatory authorities, self-regulatory organizations, clearing institution and other domestic commodity exchanges. Regular members file financial statements with Exchange once a year and broker members submit those statements twice a year to both MAFF and TGE. Broker members are also required to file their financial standing and brokerage operation reports with the MAFF as well as the Exchange on a monthly basis.
The Exchange may scrutinize the books and documents with respect the financial standing and management of the brokerage operations of the broker member and, if necessary, shall enter the broker member's head office or its sales offices for the purpose of audit and guidance. The Exchange may order a broker member to improve its financial standing or brokerage operations in order to maintain the stability of the commodity market of the Exchange and to safeguard customers and their assets.
|
