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Article NO. Content

Title:

Regulations Governing Information to be Published in Financial Institution Prospectuses for Offering and Issuance of Securities  CH

Amended Date: 2020.03.24 
Article 9 The section on risks shall set forth the following information:
1.Drivers of risk: The prospectus shall analyze and evaluate the following matters during the preceding fiscal year and in the current fiscal year up to the date of the publication of the prospectus:
A.External drivers of risk:
a.Effect upon the company's financial and business affairs of changes in important government policies, laws, and financial accounting standards at home and abroad, as well as response measures being or to be taken.
b.Effect of changes in the financial and business climate at home and abroad upon the company's financial and business affairs, as well as response measures being or to be taken.
c.Effect of changes in market competition at home and abroad upon the company's financial and business affairs, as well as response measures being or to be taken.
d.Effect of changes in real estate market price levels upon the value of mortgage collateral and the quality of credit assets, as well as response measures being or to be taken.
e.Effect of differences between laws and regulations at home and abroad upon the current offering and issuance of securities.
B.Drivers of operational risk:
a.Organizational framework and policies for risk management.
b.Methods for measuring and controlling risks, and exposure quantification information.
c.Asset quality: With respect to the most recent two fiscal years, provide the dollar amount of non-performing credit, credit risk concentrations, a maturity analysis of assets and liabilities, and sensitivity to market risk. (Attachments 2 to 5)
d.Research and development plans for the future, and expenditures expected for research and development work.
e.Effect of the company's investment activities on its financial and business affairs.
f.Expected benefits and risks associated with any expansion of business locations, and any response measures being or to be taken.
g.Risks associated with any concentration of business, and response measures being or to be taken.
h.Effect of possible material changes expected in the company's principal businesses (including types of business, transaction volume, and revenues), and mitigation measures being or to be taken.
i.Effect upon and risk to the company associated with any change in managerial control, and response measures being or to be taken.
j.Effect upon and risk to the company if a large quantity of shareholding of a director, supervisor, or 1 percent or greater shareholder in the company were to be transferred or otherwise change hands, and measures to be adopted in response.
k.Expected benefits of any mergers or acquisitions, as well as possible risks and any response measures being or to be taken.
l.Effect of employee infidelity or errors upon the company's financial and business affairs, as well as response measures being or to be taken.
m.Effect of damage to information systems upon the company's financial and business affairs, as well as response measures being or to be taken.
n.Effect of financial holding company group business operations upon the company's financial and business affairs, as well as response measures being or to be taken.
C.Other drivers of risk:
a.Current credit rating and changes therein over the preceding two fiscal years.
b.Effect of any change to corporate image upon the company, as well as response measures being or to be taken.
c.Other important risks and any response measures being or to be taken.
2.Litigious and non-litigious matters:
A.For litigious or non-litigious proceedings or administrative disputes involving the company with respect to which a judgment has become final and unappealable in the most recent two fiscal years or in the current year up to the date of publication of the prospectus, and for any such matter still pending, if the outcome could materially impact shareholders' equity or the prices of the company's securities, the prospectus shall list the facts of the dispute, amount of money at stake in the dispute, the date of commencement of proceedings, the main parties to the dispute, and current status of the dispute's handling.
B.For litigious or non-litigious proceedings or administrative disputes involving a company director, supervisor, the general manager, a de facto responsible person, a 1 percent or greater major shareholder, or a controlled company, if a judgment has become final and unappealable in the most recent two fiscal years or in the current year up to the date of publication of the prospectus, or if such a matter is still pending, if the outcome could materially impact shareholders' equity or the prices of the company's securities, the information to be disclosed shall be the same as that set forth in the preceding item.
C.Where any of the situations set out under Article 157 of the Securities and Exchange Act has occurred with respect to a company director, supervisor, managerial officer, or 10 percent or greater major shareholder within the preceding two fiscal years, or in the current year up to the date of publication of the prospectus, the prospectus shall indicate that fact and describe the current status of the company's handling of the matter.
3.If a company director, supervisor, managerial officer, or 1 percent or greater major shareholder or more has experienced financial difficulties or loss of creditworthiness in the most recent two fiscal years, or in the current year up to the date of publication of the prospectus, the prospectus shall indicate the impact on the company's financial status.
4.Other matters of important significance.