Administrative action on J.P. Morgan Securities Asia Pte. Limited, Tokyo Branch

(1) From 13:57 to 15:10 on November 4, 2004, conducting the TOPIX futures transactions on its overseas affiliated company's account, a trader of the Branch placed in the TSE market a series of selling orders and purchasing orders at the same index point both by himself and matched them each other. As a result, the Branch conducted cross trades in the TOPIX futures transactions with no intention to transfer the rights represented by the TOPIX futures.

(2) The acts above are found to be ''acts of conducting a series of stock index futures transactions intended to create an artificial market which does not reflect actual state of the market'' stipulated in Article 4(iii) of the Ordinance of the Cabinet Office Concerning the Regulations, etc. of Conducts of Securities Companies (before amended in 2005), and thus to have violated Article 42(1)(ix) of the Securities and Exchange Law (before amended in 2004) as applied by Article 14(1) of the Law on Foreign Securities Firms (before amended in 2004).

(1) In November 2004, acting as an intermediary of purchasing a specified corporate bond, which is a real estate securitization product (hereinafter referred to as ''the Bond''), the Branch delivered to the client appraisal reports in which necessary reduction of the valuation of the underlying assets of the Bond was not estimated. Furthermore, in spite of the client's concerns about the estimated exit prices of the underlying assets, the Branch did not provide its lower estimated prices. Thus the Branch failed to give an appropriate explanation for the Bond.

(2) The acts above are found to be ''acts of making representation of a false statement or a misleading statement on any material matter, in connection with the sale or purchase of, or any other form of transaction in a security'' stipulated in Article 4 (i) of the Ordinance of the Cabinet Office Concerning the Regulations, etc. of Conducts of Securities Companies (before amended in 2005), and thus to have violated Article 42(1)(ix) of the Securities and Exchange Law (before amended in 2004) as applied by Article 14(1) of the Law on Foreign Securities Firms (before amended in 2004).