(This document is provided in accordance with Article 37-3 of the Financial Instruments and Exchange Act.)
This document outlines the risks and points to consider when engaging in margin trading. Please read it carefully in advance, and if you have any questions, confirm them before starting your transactions.
About Fees and Other Charges
- When engaging in margin trading, fees including trading commissions, margin management fees, and transfer fees as described in "Fees and Other Charges Related to Margin Trading" will be applied.
- For purchases in margin trading, you must pay interest on the purchase amount. For sales, you must pay borrowing fees and rental fees for the sold shares.
About Margin Deposits
- To engage in margin trading, you must provide a margin deposit (which can be substituted with securities) as collateral.
- The margin deposit must be at least 30% of the transaction value and at least 300,000 yen. However, our minimum requirement to start margin trading is 3,000,000 yen. For information on the types of securities that can be used as substitutes and their substitute prices, please refer to "Types of Substitute Securities and Substitute Prices".
Risks of Margin Trading
Margin trading allows you to engage in large transactions with a small margin deposit, which can sometimes result in significant losses. Therefore, it is crucial to fully understand the following details before starting margin trading.
- Engaging in margin trading involves risks related to fluctuations in stock prices, foreign exchange rates, real estate markets, commodity markets, etc. Additionally, changes in the prices or valuations of underlying assets such as stocks, bonds, real estate, and commodities (hereinafter referred to as "Underlying Assets") may lead to losses exceeding the amount of the margin deposit provided.
- If there are changes in the status of the issuer or guarantor of the securities involved in the margin trading, or changes in the underlying assets, the prices of those securities may fluctuate, potentially resulting in losses that exceed the margin deposit.
- Due to subsequent price movements of securities bought or sold through margin trading or declines in the prices of substitute securities, if the current value of the margin deposit falls below 20% of the transaction value, you will be required to deposit the shortfall (up to 30%) by a specified date.
- If you fail to deposit the shortfall by the due date, or if other events result in the loss of your rights under the agreement, your open positions may be settled (through counter-trading or actual delivery) at a loss, and you will be responsible for any losses incurred from such settlements.
- If the financial product exchange determines that your margin trading activity is excessive, they may raise the margin deposit rate or impose restrictions or prohibitions on margin trading.
Thus, while margin trading can potentially yield greater profits compared to the invested funds, it also entails the risk of significant losses that may exceed the initial investment. Therefore, please ensure you fully understand the mechanics of margin trading and act at your own judgment and responsibility.
Margin Trading is Not Subject to Cooling-Off
- Margin trading is not subject to the provisions of Article 37-6 of the Financial Instruments and Exchange Act.
Mechanism of Institutional Margin Trading
- Institutional margin trading refers to margin trading involving stocks and other securities listed on financial product exchanges, where lending fees and repayment deadlines are determined by the regulations of the financial product exchange. Additionally, for settlement of transactions conducted through institutional margin trading, our company can borrow stocks and purchase funds through the settlement system of the financial product exchange.
- Only stocks designated as "institutional margin stocks" by the financial product exchange can be traded under institutional margin trading. While it is generally possible to borrow funds for purchases of institutional margin stocks, borrowing stocks for selling is limited to those designated as "lending stocks" by the exchange.
- The repayment period for institutional margin trading is set at six months, and trading cannot be continued beyond this period. If it is deemed inappropriate to continue margin trading, the financial product exchange may change the repayment deadline regardless of the six-month limit, so please be aware.
- Interest rates and lending fees for institutional margin trading will be determined based on the prevailing interest rate situation. These rates may fluctuate, so please check with us for the latest information.
Additionally, if a shortage of stocks arises (when the number of borrowed stocks exceeds the available lending stocks), the seller will pay a lending fee (commonly known as "reverse repo") to the buyer. The lending fee will be determined based on the current stock procurement situation.
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- The amount will be determined based on the current interest rate situation and stock procurement status, so it cannot be predetermined in this document.
- The lending fees paid by sellers in institutional margin trading are not received by the buyers. Cost related to margin trading will be explained at the start of the transaction.
- If stocks traded under institutional margin trading become eligible for stock splits or new stock options due to rights adjustments, the financial product exchange will handle these rights to ensure fairness for both buyers and sellers. (Note) However, the processing of rights in the case of stock splits varies depending on the split ratio:
- In the case of stock splits where new shares are allocated in whole multiples of the trading unit (e.g., split ratio 1:2), the quantities for buying or selling under institutional margin trading will be increased, and the trading price (transaction price) will be reduced according to the split ratio.
- In the case of other stock splits (e.g., split ratio 1:1.5), the rights adjustment price specified by the financial product exchange will reduce the initial trading price (transaction price). Additionally, the equivalent amount of dividends will be distributed to buyers after the dividend has been confirmed (typically about three months after the ex-dividend date), with sellers required to pay this amount.
- In institutional margin trading, the stocks purchased by customers are retained as collateral by the financial product trading company, and if using borrowing transactions, they are also retained by the securities finance company. Since customers cannot directly exercise rights such as stock splits or new stock options granted on those stocks, the financial product exchange has rules in place for processing these rights.
However, if rights are granted to stocks involved in institutional margin trading, rights may not be processed if it is practically impossible to transfer rights due to restrictions or if the rights are only exercisable under specific conditions. If the value of the rights is practically worthless, there may be no need for processing.- If there is a risk that procuring stocks for lending stocks will become difficult, the securities finance company may issue warnings regarding the use of borrowed stocks. Furthermore, if procuring stocks becomes difficult, restrictions or suspensions on the use of borrowed stocks may be implemented. In such cases, it may not be possible to conduct new sales through institutional margin trading or repay borrowed stocks through sales or direct settlements.
Overview of Financial Product Trading Contracts Related to Margin Trading
Regarding margin trading at our company, it is as follows:
- Transactions involving stocks and other securities where credit is extended to customers:
Mediating, intermediating, or acting as an agent for orders placed on the exchange financial product market or foreign financial product market.
Mediating, intermediating, or acting as an agent for the buying and selling of stocks and other securities.- Management of margin deposits or substitute securities related to margin trading.
Overview of Taxes Related to Financial Product Trading Contracts
Taxation for individual customers is as follows:
- The adjustment amount for dividends in margin trading is taken into account when calculating capital gains from the sale of stocks, etc.
- Profits from the sale of listed stocks related to margin trading are generally considered capital gains from the sale of stocks, etc.
In the case of a loss, it is possible to offset this loss against capital gains from the sale of other stocks, etc.Taxation for corporate customers is as follows:
- The adjustment amount for dividends received by purchasing customers will be deducted from the consideration amount when calculating taxable income for corporate tax. The adjustment amount paid by selling customers will be deducted from the consideration amount in the calculation of taxable income for corporate tax.
- Profits from the sale of listed stocks related to margin trading will be included in the amount of taxable income for corporate tax.
For more details, please consult a tax professional, such as a certified public accountant.
Overview of Financial Product Trading Business Conducted by Our Company
The financial product trading business conducted by our company primarily falls under Type 1 Financial Instruments Business as stipulated in Article 28, Paragraph 1 of the Financial Instruments and Exchange Act. When engaging in margin trading with our company, the following applies:
- When conducting transactions, you must fill out the "Margin Trading Account Setup Agreement" with the necessary details, seal it, and submit it to our company to open a margin trading account. All monetary and securities transactions related to margin trading will be processed through this account. Please read the agreement carefully and keep a copy for your records.
- To open a margin trading account, certain investment experience, knowledge, and financial capacity are required; thus, there may be cases where account opening is not possible.
- When placing an order for margin trading, you must clearly specify "for margin trading."
- To prevent excessive use of margin trading, the financial instruments exchange has established a daily publication system for securities, publishing the balances of margin trading for securities that fall under the guidelines for daily published securities.
- The margin deposited by customers with our company is stored separately from our own assets. Therefore, even in the unlikely event of our company's bankruptcy, you can receive a refund of the margin as long as you have fully met your obligations to our company. However, stocks purchased through margin trading and the proceeds from the sale of stocks through margin trading are not subject to this separate storage. Consequently, in the unlikely event of our company's bankruptcy, you may not be able to settle margin transactions through selling, purchasing, or physical delivery. In such cases, as a general rule, instead of the usual repayment method, you will be required to settle in cash based on stock prices determined by the financial instruments exchange. In this situation, your claims for payment against our company will not have any priority status, and even if profits are calculated, you may not be able to receive them. Please note that such claims are also not eligible for compensation under the Investor Protection Fund.
- If a qualified institutional investor (including similar foreign corporations) engages in the sale of margin trading, or if any other investor sells more than 50 times the trading unit specified by the financial instruments exchange in a single transaction, they will be subject to price regulations under the Cabinet Office Ordinance concerning regulations on transactions involving securities, so please be cautious.
- Once the ordered margin trading is executed, a "Transaction Report" will be issued by our company for your confirmation.
- If there are any discrepancies in the content, please promptly contact our management responsible person directly.
Basic Flow of Margin Trading
- Starting with a purchase... You will pay interest on the purchase amount.
Methods of repayment
- ① Sell Repayment:
- You will repay the loan by selling the purchased stocks.
- ② Physical Delivery:
- You will hand over the loan amount directly to our company.
(The purchased stocks will be given to you.)- Starting with a sale... You will pay the lending fee for the sold stocks and the margin trading stock loan fee.
Methods of repayment
- ① Buy Repayment:
- You will repay the loan by repurchasing the sold stocks.
- ② Physical Delivery:
- You will hand over the loaned stocks directly to our company.
(The sale proceeds will be given to you.)Company Overview
Company Name One Asia Securities Co., Ltd.
Financial Instruments Business Operator, Kanto Local Finance Bureau Director (License No. 201)Head Office Address 1-6-4 Kudankita, Chiyoda-ku, Tokyo 102-0073, Japan
Affiliated Associations Japan Securities Dealers Association Designated Dispute Resolution Organization Non-profit Organization Securities and Financial Instruments Mediation Center Capital 100 million yen (as of October 3, 2022) Main Business Financial Instruments Business Establishment Date February 2001 Contact 03-6273-4201 Contact Information for Comments and Complaints
Address 1-6-4 Kudankita, Chiyoda-ku, Tokyo 102-0073, Japan Phone Number 03-6273-4391
Monday to Friday (excluding holidays) 8:30 AM - 5:30 PMInformation on the Financial ADR System
The Financial ADR system aims to provide a simple and swift resolution to disputes and troubles between customers and financial institutions, outside of court proceedings. As a resolution measure for complaints and disputes related to financial instruments business, you can use the "Non-Profit Organization Financial Instruments Mediation and Consultation Center (FINMAC)," which is a designated dispute resolution organization under the Financial Instruments and Exchange Act.
FINMAC is a public third-party organization and is not affiliated with our company.
Address 1-1, Nihonbashi Kayabacho 2-chome, Chuo-ku, Tokyo 103-0025, Japan Phone Number 0120-64-5005
Monday to Friday (excluding holidays) 9:00 AM - 5:00 PM