(1) Act of instructing the trading between different investment assets

• Law concerning Investment Trusts and Investment Corporations (extract)

(Code of conduct for investment trust business)
Article 15
   An investment trust company shall not conduct the following acts with regard to investment trust assets which it instructs to invest.
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Item 2
   To instruct a trustee company to conduct reciprocal transaction between two different investment trust assets which the same investment trust company instructs to invest.
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(Business improvement order)
Article 40
   The Prime Minister, in light of the status of business of an investment trust company, may order an investment trust company to change its method of conducting business, or to take other necessary actions in order to improve its business management, to the extent necessary for ensuring the sound and appropriate business management of an investment trust company and for the protection of investors.
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• Decision by the Executive Board of the Association of the Japanese Investment Advisors: "standard which should be noted while managing business"

5. Mutual securities transaction between investment assets
a. In principle, a member may not conduct a mutual securities transaction between investment assets under discretionary investment agreements (hereinafter "discretionary investment assets") noting the purpose of provision of Article 108 of the Civil Code, even though that mutual securities transaction may not fall under acts listed in Item 5, paragraph 1 of Article 30 of the Investment Advisors Law. Under particular circumstances, members may conduct the said transaction noting the following.
(a) A reciprocal securities transaction between different investment assets of the same customer may be conducted at a proper price with the customer's written consent.
(b) A reciprocal securities transaction between different investment assets of different customers, may be conducted at a proper price with disclosure to both customers indicating the transaction price and the facts that the transaction will be conducted with other investment assets, as well as written consent from both customers, limited to the said transaction is necessary and positively desirable for both investment assets.

b. In principle, a member who conducts investment trust business may not conduct a reciprocal securities transaction between investment trust assets and discretionary investment assets, which are instructed to be invested by the same member noting the purpose of provision of Article 108 of the Civil Code, even though that mutual securities transaction may not fall under acts listed in Article 31-4 of the Investment Advisors Law and Article 34-12 of the Law concerning the Investment Trusts and Investment Corporations. Particular circumstances where members shall conduct the said transaction shall be dealt with in the same manner pursuant to a. (b).

(2) Good manager's duty of due care

• Law concerning Investment Trusts and Investment Corporations
  (extract)

(Duty towards beneficiaries)
Article 14 ...
Paragraph 2 An investment trust company shall conduct its business such as instruction to invest investment trust assets for their beneficiaries with good manager's due care.