(Provisional Translation)
February 28, 2003
Financial Services Agency

The administrative action against
J.P.Morgan Securities Asia Pte. Limited, Tokyo Branch

1. Acts of conducting a series of securities transactions intended to create artificial market prices which do not reflect actual states of markets

The Securities and Exchange Surveillance Commission (SESC) conducted the inspection of J.P.Morgan Securities Asia Pte. Limited, Tokyo Branch (''Branch'' hereafter), and found the following violation of the Securities and Exchange Law (''Law'' hereafter). The SESC recommended the Commissioner of the Financial Services Agency (FSA) on February 25, 2003 to take a disciplinary action against the Branch.

(1)

On January 16, 2001, the Branch placed a series of a large amount of sell orders of the stock at the limited prices for the purpose of making a closing price of the stock lower than the ''strike price'' of the Exchangeable Bond (''EB'' hereafter). As a result, the price of the stock went below the strike price at the close. The Branch was one of the arranger of the EB, the underlying asset of which was the stock. The Branch also had the contract with the issuer of the EB to sell the fixed amount of the stock at the fixed price when a closing price of the stock was below the ''strike price''.

(2)

The acts above are found to be ''acts of conducting a series of securities transactions intended to create artificial market prices which do not reflect actual states of markets'' stipulated in the Article 4 (iii) of the Ordinance of the Cabinet Office Concerning the Regulations, etc. of Conducts of Securities Companies, and thus to have violated the Article 42 (1) (ix) of the Law as applied by the Article 14 (1) of the Law on Foreign Securities Firms.

2. The administrative action against the Branch

On the basis of the above findings, the FSA issued the following business suspension and improvement order to the Branch today:

(1)	Suspending business operation Suspending all the stock tradings on its own account from March 3, 2003 to March 14, 2003 (10 business days) except for the execution of transactions contracted on or before February 28, 2003.
(2)	Improving compliance with the law
	1) Strengthening the internal control system, securing strict compliance by all the directors and staff, taking preventive measures against recurrence of the above-mentioned violation, and clarifying locus of responsibility. 2) Submitting a report to the FSA on the implementation of the above measures by March 28, 2003.