|
Article 30
|
A securities firm shall review and analyze its financial position, and financial performance, and assess risk items. The required particulars are as follows:
- Financial condition: The report shall explain the reason for, and impact of, any material change over the most recent 2 fiscal years in its assets, liabilities, or equity. Where the impact is of material significance, it shall further describe how the securities firm plans to respond.
- Financial performance: The report shall explain the reasons for any material changes over the most recent 2 fiscal years in operating income, and income before tax; forecast the securities firm's expected sales volume and provide the basis for the forecast; and describe the possible impact of such changes upon the securities firm's financial and business affairs, and how the securities firm plans to respond.
- Cash flows: The report shall analyze and explain any changes over the most recent fiscal year in the securities firm's cash flows; describe how the securities firm plans to address any illiquidity problems; and provide an analysis of the securities firm's cash liquidity for the coming fiscal year.
- The impact of any material capital expenditures over the most recent fiscal year upon the securities firm's financial and operating condition.
- The securities firm's policy for the most recent fiscal year on investments in other companies, the main reasons for profit/losses resulting therefrom, plans for improvement, and investment plans for the coming fiscal year.
- The section on risks shall analyze and assess the following matters for the most recent fiscal year and as of the day of the close of the fiscal year:
- The effect upon the securities firm's profits (or losses) of interest and exchange rate fluctuations and changes in the inflation rate, and response measures to be taken in the future.
- The securities firm's policy regarding high-risk investments, highly leveraged investments, loans to other parties, endorsements, guarantees, and derivatives transactions; the main reasons for the profits/losses generated thereby; and response measures to be taken in the future.
- Effect on the securities firm's financial operations of important policies adopted and changes in the legal environment at home and abroad, and measures to be taken in response.
- Effect on the securities firm's financial operations of developments in science and technology (including cyber security risks) as well as industrial change, and measures to be taken in response.
- Effect on the securities firm's crisis management of changes in the securities firm's corporate image, and measures to be taken in response.
- Expected benefits and possible risks associated with any merger or acquisition, and measures to be taken in response.
- Expected benefits and possible risks associated with any plant expansion, and measures to be taken in response.
- Risks associated with any consolidation of business operations, and measures to be taken in response.
- Effect upon and risk to the securities firm of any large transfer or changing of hands of shareholding of a director, a supervisor, or a shareholder holding greater than a 10 percent stake in the securities firm, and measures to be taken in response.
- Effect upon and risk to the securities firm associated with any change in governance personnel or top management, and measures to be taken in response.
- Litigious or non-litigious matters. List any major litigious, non-litigious, or administrative dispute that involves the securities firm or any of its directors, supervisors, general manager, any major shareholder holding a stake of greater than 10 percent, or any company or companies controlled by the securities firm, and that has been concluded by a final and conclusive judgment or is still pending. Where the outcome of such a dispute could materially affect shareholders' equity or the prices of the firm's securities, the report shall disclose the facts of the dispute, amount of money at stake in the dispute, the date of commencement of litigation, the main parties to the dispute, and the status of the dispute as of the date of the close of the fiscal year.
- Other significant risks, and measures to be taken in response.
- Crisis management mechanisms.
- Other important matters.
|