Foreign Exchange Control Order. Copyright Roderick Seeman

CHAPTER II FOREIGN EXCHANGE POSITION, ETC. OF AUTHORIZED FOREIGN EXCHANGE BANKS

Article 4 (Instructions, etc. on Limitations on Foreign Exchange Positions)

1. When the Minister of Finance, based on the provisions of Article 11-2, of the Law, gives instructions on the limits of foreign exchange positions to the authorized foreign exchange banks, he shall do so, specifying classification of foreign exchange positions which are to be the subject thereof, the time or term as to which to calculate the foreign exchange reserves, and other matters deemed necessary.

2. The classifications of foreign exchange positions of the preceding paragraph shall be the foreign exchange positions listed in each of the following items, and the said foreign exchange positions shall be the amount listed in each of the following items corresponding to the said classifications.

(1) Spot foreign exchange positions:

The sum of money equivalent to the difference between the balance of spot foreign currency assets (meaning the total sum of means of payment indicated via foreign currencies and deposits, lendings, foreign currency denominated securities and others as designated by Minister of Finance where payment can be received via foreign currency; in Item 3, the same) and spot foreign currency liabilities (meaning the total of liabilities such deposits received and borrowings and others as determined by the Minister of Finance as spot foreign currency liabilities which are to be repaid via means indicated by foreign currency; in Item 3, the same).

(2) Future foreign exchange positions:

The sum of money equivalent to the difference between the balance of future foreign currency assets (meaning the sum of foreign currency claimable assets, means of payment and others as determined by the Minister of Finance as futures foreign currency assets, which are shown via foreign currency which authorized foreign exchange banks acquire based on future foreign exchange transactions (meaning transactions related to creation, etc. of claims based on trading contracts for foreign currency claimable assets or means of payment which are shown via foreign currency which are executed after the date of the said trading contract at a specified date and in a set foreign exchange market; in the next item, the same) and the balance of future foreign currency liabilities (meaning the sum of foreign currency claimable assets and means of payment which are shown via foreign currency and others as designated by the Minister of Finance as futures foreign currency liabilities, which authorized foreign exchange banks are to deliver based on the future foreign exchange transactions; in the next item, the same.)

(3) Total spot-future foreign currency positions:

The total sum of money equivalent to the difference between the total balance of spot foreign currency assets together with the balance of future foreign currency assets and the total of the balance of spot currency liabilities together with the balance of future foreign currency liabilities.

3. The requisites to be determined by Cabinet Order as provided for in Article 11-2, Item 1 of the Law shall be the requisites as determined by the Minister of Finance in relation to matters listed in the following:

(1) Matters relating to the ratio of balances of long term lendings (meaning loans terms of which are longer than terms determined by the Minister of Finance) from among lendings of money in foreign currency to exchange residents or non-residents, to the balances of funds determined by the Minister of Finance as foreign currency funds which should become the source of the said long term loans, and other matters relating to the management and procurement of funds in relation to the foreign exchange business.

(2) Matters related to the accounting classifications concerning deposits and other assets received from exchange non-residents.

4. When the Minister of Finance, based on the provisions of Article 11-2 of the Law, orders authorized foreign exchange banks to meet the requisites determined by the provisions of the preceding paragraph, he shall do so, specifying the time when those requisites should be fulfilled and other matters deemed necessary.

5. The accounts to be determined by Cabinet Order as provided for in Article 11-2, Item 2 of the Law shall be deposit accounts and accounts determined by the Minister of Finance as similar to those (hereinafter referred to in this article as "deposit accounts, etc.").

6. When the Minister of Finance, based on the provisions of Article 11-2 of the Law, prohibits authorized foreign exchange banks from paying interest on deposit accounts, etc., he shall do so, designating the type of deposit accounts, etc., which will become the subject thereof, their terms (time period) and other matters deemed necessary.

7. The provisions of the preceding Paragraph shall be applied only to deposits and other liabilities newly credited to the deposit accounts, etc., subject to the said prohibitions after the day that the prohibitions based on the preceding paragraph are made.