Investment Banking Memo

Rules regarding Bank Agency Businesses The Amending Law includes a definition of a “Bank Agency Business” (“ginko-dairigyo”), which means a “business conducting any of the following businesses on behalf of a bank L02- 258770-v5 (Article 2, Paragraph 14 of the amended Banking Law) 1 : (i) acting as an agent or an intermediary 2 for the execution of an agreement concerning acceptance of deposits or installment savings etc (ii) acting as an agent or an intermediary for the execution of an agreement concerning lending money or discounting drafts 3 or (iii) acting as an agent or an intermediary for the execution of an agreement concerning exchange transactions.” A company or a person who engages in a Bank Agency Business on behalf of a bank (“Affiliated Bank”) is called a “Bank Agent” (“ginko-dairigyosya”) (Article 2, Paragraph 15 of the amended Banking Law).. Prohibited Acts A Bank Agent is prohibited from conducting the following acts in conjunction with its Bank Agency Business (Article 52-45): (i) providing a customer with false information (ii) providing a decisive judgment to the customer with respect to an uncertain matter, or providing information which may mislead the customer (iii) acting as an agent or an intermediary for the execution of an agreement concerning lending moneys or discounting drafts for an Affiliated Bank with a customer on the condition that the customer enters into transactions with the Bank Agent or its closely related party (as specified under a Cabinet Office Ordinance and including its subsidiary) (“Closely Related Party”) (iv) acting as an agent or an intermediary for the execution of an agreement concerning lending moneys or discounting drafts for an Affiliated Bank with a Closely Related 3 L02- 258770-v5 Party, knowing the condition of the transaction disadvantage the Affiliated Bank in light of the ordinary condition of the Affiliated Bank’s transaction and (v) acts stipulated in a Cabinet Office Ordinance which may result in inade