(Provisional Translation)
June 27, 2006
Financial Services Agency
Government of Japan

Administrative action on Calyon Capital Markets Asia B.V., Tokyo Branch

As a result of the reporting order issued by the Financial Services Agency(FSA) on Article 31(1) of the Law on Foreign Securities Firms to Calyon Capital Markets Asia B.V., Tokyo Branch(hereinafter referred to as the "Branch") based on the notification from the Branch, the following violation of the Securities and Exchange Law(hereinafter referred to as the "Law")was found.

Short-Selling in breach of the Law

Concluding an agreement with its affiliated overseas company (hereinafter referred to as the "Affiliate") that the Branch shall determine the volume and the price of the sell or purchase orders of stocks of the Affiliate, the Branch ordered sell or purchase of stocks by the Affiliate, through another securities firm from February to July 2005, and directly to the stock exchange from July to October 2005.

In the situation above, the Branch placed many short-selling orders without legally required indication of the fact of short-selling. In addition, the Branch conducted short-selling at a price equal to or lower than the latest published price immediately prior to the short-selling.

The acts above were found to violate the Article 26-3 (1) and (4), the Article 26-4 (1) and (2) of the Cabinet Order for Enforcement of the Law, and hence the Article 162 (1) (i) of the Law, both of which regulate short-selling.

Administrative action on the Branch

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