(Provisional Translation)
August 20, 2001
Financial Services Agency

An administrative action against ING Baring Securities Japan Ltd., Tokyo Branch

1. On June 12, 2001, the Financial Services Agency (FSA) requested ING Baring Securities Japan Ltd., (''the Branch'' hereafter) to report the reason why the Branch widely disseminated the analyst's report on the listed stock of the specific company with the erroneous indicators, which recommended investors to sell the stock. As a result of that, the following violations of the Law on Foreign Securities Firms(LFSF) were found:
   • On May 25, 2001, in order to induce many investors to sell the listed stock of the specific company, the Branch made and disseminated the report on the estimated price of the stock and encouraged investors to sell it, although the report included incorrect indicators that are likely to lead to investors' decision making based on misunderstanding.
   • Additionally, the Branch made contracts in its own account for selling the stock with an investor after soliciting the investors to whom the report had been distributed.
   Such conduct was found to violate the Article 4-1 of the Cabinet Order concerning the Regulations of Conducts of Securities Companies which prohibits the securities companies from indicating information which is most likely to lead to investors' misunderstanding.

2. On the basis of the above findings, the FSA issued the following orders against the Branch:

«Improve the compliance with the law»

(1)	Clarify locus of responsibility.
(2)	Make and execute preventive measures against recurrence of the violations mentioned above; Strengthen the internal checking procedure for analyst's reports - Establish standards and procedures for sufficiently and objectively checking analyst's reports such as checking the data within research reports by Legal and Compliance section. Establish the ''Chinese Wall'' between the research section and the others - Establish and maintain effective confidential information barriers between the research section and the others such as investment banking, equity trading, and so on, in order to prevent trading department from utilizing the advance knowledge of the issuance of research reports. Prevent the ''Front Running of Research'' - Establish the procedure to ensure that proprietary traders are informed on any change in research recommendations or initiation of research coverage prior to the market open in order to avoid trading ahead of research reports.
(3)	Deadline By September 19, 2001, report to the FSA what kind of measures should be worked out and to what extent the measures should be executed according to the order for improvement of the compliance with the Law listed above.