(Provisional Translation)
September 18, 2002
Financial Services Agency

An administrative action against Banc of America Securities-Japan, Inc., Tokyo Branch

1. Acts of conducting a series of securities transactions intended to create artificial market prices which does not reflect the actual state of the market

The Securities and Exchange Surveillance Commission (SESC) conducted an inspection of Banc of America Securities-Japan, Inc., Tokyo Branch (''the Branch'' hereafter), and found the following legal violation of the Securities and Exchange Law (''the Law'' hereafter). The SESC sent the recommendation to the Commissioner of the Financial Services Agency (FSA) to take a disciplinary action against the Branch on September 10, 2002.

(1)	In relation to the Exchangeable Bond (''the EB'' hereafter) for the stocks of a listed company and intending to make the closing price of the stocks lower than the EB's strike price, on December 5, the Branch, by utilizing the selling orders of the stocks from a customer, placed a series of a large amount of the sell orders at the limited price lower than the EB's strike price. (Exchangeable Bonds are in general redeemed if the closing price is equal to or above the strike price.)
(2)	The acts above are found to violate the Article 4 (iii) of the Ordinance of the Cabinet Office Concerning the Regulations, etc. of Conducts of Securities Companies and the Article 42 (1) (ix) of the Law applied based on the Article 14 (1) of the Law on Foreign Securities Firms.
(3)	The FSA decided not to issue a business suspension order despite the severity of the acts. The reasons for the decision were as follows:
	i) there was no strong evidence to conclude that the acts above affected substantially the actual market price since the placed orders ware not matched in the market, and ii) the Branch had withdrawn from the Japanese equity business and closed the Equity Financial Products Department that was in charge of the violation.

2. The administrative action against the Branch

On the basis of the above finding, the FSA issued the following business improvement administrative order to the Branch today:

1)	Make clear responsibilities, considering that the legal violation would have deserved business suspension administrative order.
2)	Make a concrete plan of preventive measures against recurrence of the acts for strengthening the internal control system and securing strict compliance by the directors and staff to root out the legal violation.
3)	Submit a report to the FSA on the implementation of the 1) and 2) measures above by October 18, 2002.