May 26, 2000

        The Securities and Exchange Surveillance Commission (SESC) conducted the inspection of BNP Paribas Securities (Japan) Limited, Tokyo Branch (BNP Paribas) based on the provisions of the Law on Foreign Securities Firms (LFSF) and found legal violations described below.
        SESC sent the recommendation to the Financial Reconstruction Commission (FRC) and the Commissioner of Financial Supervisory Agency to take disciplinary action against BNP Paribas pursuant to Article 29(1) of FRC Establishment Law on May 26, 2000.

(1) Solicitation with promise of special profit.

      i)   Between September 1997 and July 1998, with the involvement of the managing director of the derivative marketing group, BNP Paribas solicited the plural of corporate customers with promises to avoid realizing a redemption loss of a note which the customers purchased before, by the scheme in which the note would be amended mainly to defer its redemption loss. The value of the note that was just before redemption was almost nothing.

     ii)   Between April 1994 and January 1996, with the involvement of the manager of the Tokyo branch, BNP Paribas solicited a customer (a securities investment advisor) with a promise to give rebate for orders from the customer under the pretext of giving advisory fee.

(Violation of LFSF 17(1), which is the law before the amendment in 1998)

(2) Conclusion of discretionary trading account transaction contracts.
      Between December 1999 and February 2000, BNP Paribas had received orders from some customers and conducted transactions of stocks after concluding contracts that allowed Paribas to determine the price of transactions.

(Violation of LFSF 14(1))