Financial Services Agency

Recommendations based on test results for Create Japan Co., Ltd. 1. Contents of recommendation The director of the Kanto Local Finance Bureau established Create Japan Co., Ltd. (Chuo-ku, Tokyo, corporation number 5010001141300, President Yoshio Io, capital 303 million yen, 53 full-time officers and employees, Type 1 financial instruments transaction) As a result of an inspection of a financial instruments business operator, a type II financial instruments business, hereinafter referred to as the "Company"), the following problems were found with the financial instruments business operator, so today the Securities and Exchange Surveillance Commission It recommended that the Prime Minister and the Commissioner of the Financial Services Agency take administrative action based on the provisions of Article 20, Paragraph 1 of the Act for Establishment of the Financial Services Agency. 2. Facts: Due to an extremely poor business management system, etc., a large number of sales representatives have continuously and constantly violated laws and regulations over a long period of time. (1) Violations are committed. Situation Our company handles exchange margin trading, and during the period from January 2019 to January 2020, 32 sales staff of our company opened new accounts for 74 prospective customers. As a result of examining the status of telemarketing related to the transaction, the following facts were confirmed. A. Violation of obligation to confirm intention to accept solicitation In order to avoid being unable to conduct solicitation due to refusal of solicitation to open a new account by prospective customers, 10 sales representatives asked 18 prospective customers to accept such solicitation. Prior to that, the solicitation was conducted without confirming whether or not there was an intention to accept the solicitation. B Violation of Prohibition on Re-solicitation Even though 30 sales representatives had expressed their intention to refuse to continue solicitation from 40 prospective customers, they prioritized improving their own sales performance and made phone calls at a later date. was soliciting again. The act of a above at the Company is deemed to fall under Article 38, Item 5 of the Financial Instruments and Exchange Act. In addition, it is recognized that the act of the above B at the Company falls under Article 38, Item 6 of the same law. (2) Extremely careless business management system, etc. The situation described in (1) above has been recognized continuously and constantly since April 2016 at the latest. The following operational problems were identified. A. The president and representative director easily recognizes that there is no problem with compliance with laws and regulations as long as there are no complaints from customers. There was no recognition that risks should be managed in accordance with the Company's business model, and no consideration or discussion of these matters was conducted within the company. B. In order to maintain and expand the scope of the Company's business, the officer in charge who was in charge of sales rather tolerated the violation of laws and regulations described in (1) above, and conducted sales without regard for the violation of laws and regulations by many sales personnel. I was letting C. The officer in charge of internal control did not recognize the necessity of monitoring the daily sales activities of sales staff, and therefore failed to establish a management system to ensure compliance with laws and regulations through such monitoring. As described above, the Company's management has neglected compliance with laws and regulations because it prioritizes the acquisition of profits for the Company. Recognized as extremely sloppy. (Note) The president and representative director, etc. in (2) above are listed with the titles as of the inspection reference date (January 24, 2020). (Reference Articles) ○ Financial Instruments and Exchange Act (Law No. 25 of 1948) (Excerpt) (Prohibited Acts) Article 38 Financial Instruments Business Operators, etc. or their officers or employees shall not commit any of the following acts: should not. (Omitted) 1 to 4 (Omitted) 5. Contracts for financial instruments transactions (limited to those specified by Cabinet Order as necessary to protect investors, taking into consideration the content of the contract for financial instruments transactions and other circumstances) Act of soliciting a customer without confirming whether or not the customer is willing to accept the solicitation prior to the conclusion of the contract (vi) Financial instruments transaction contract (considering the content of the financial instruments transaction contract and other circumstances) , limited to those specified by Cabinet Order as necessary to protect investors.) of the customer's intention not to conclude the financial instruments transaction contract Act of continuing the solicitation despite the fact that the solicitation has been indicated (including the intention not to do so) (hereinafter omitted) etc. are prohibited) Article 16-4 (omitted) and (i) Intermediation, brokerage (excluding Brokerage for Clearing of Securities, etc.) or agency for the following transactions among Market Derivatives Transactions on behalf of customers, or provision of brokerage, brokerage or agency for entrustment of these transactions: (a) a contract in which the parties to the purchase or sale purchase or sell financial instruments (those listed in Article 2, paragraph 24, item (ii) or item (iii) of the Act, or hereinafter the same shall apply in this item) and a sale or purchase in which a promise is made to pay or receive consideration for the purchase and sale of the financial instrument that is the subject of the sale or repurchase. In some cases, transactions that can be settled by paying and receiving the difference (hereinafter omitted)