(Provisional Translation)
February 26, 2002
Financial Services Agency

An administrative action against Deutsche Securities Ltd., Tokyo Branch

1. On February 13, 2002 the Financial Services Agency(FSA) ordered Deutsche Securities Ltd., Tokyo Branch (''the Branch'' hereafter) to report about Short-selling in breach of Securities and Exchange Law (''the Law'' hereafter) based on the information obtained through the comprehensive review of compliance on short-selling regulation*, and the following legal violation of the Law was found.

   *	The comprehensive review of compliance on short-selling regulation was conducted by the member firms of the Japan Securities Dealers Association (JSDA) at the request of the FSA through the JSDA as a part of ''the comprehensive measures for short-selling of stocks'' announced on December 21,2001.

-	Short-selling in breach of the Law In November 2001 the Branch executed short-selling of stocks on its own account without legally required disclosure of the fact of short-selling to the stock exchange many times. Because its internal control system was not adequate, staffs of the Branch failed to apply to borrow stocks to a securities finance company, though the Branch executed the short-selling orders with the intention of settling by borrowing stocks from a securities finance company.
	* Short-selling settled by borrowing stocks from a securities finance company was not required to disclose the fact of short-selling to the stock exchanges.
	In addition, by the investigation on sampling trading days, the branch was found to have conducted short sales at a price lower than the latest published price immediately prior to the short sale. The conduct above was found to violate the Article 26-3 (1), the Article 26-4 (1) of the Cabinet Order (the Securities and Exchange Law) and the Article 162 (1) (i) of the Law, both of which regulate short-selling.

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

-	Improve its compliance with the law
	1) Strengthen its internal control system, secure strict compliance by the directors and staff, take preventive measures against recurrence of the above mentioned violations, and clarify locus of responsibility. 2) Work out concrete measures with a target date to root out short-selling in breach of the Law, and to impose stricter internal penalty to a staff and his/her supervisor in the Branch.