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Fees and other important disclosures pursuant to Financial Instruments and Exchange Law of Japan
Various Expenses, Including Fees
Fees, considerations, expenses and so forth vary depending on the feature of the financial instruments transactions. Please do not hesitate to contact us if you have any questions about the details.
Explanations of Important Matters
All financial instruments involve risk, and substantial losses or obligations to pay may result because of changes in political/economic/financial conditions, both domestic and overseas, market conditions, such as foreign exchange rates, stock prices, commodity prices, interest rate levels, the credit standing of issuers and underlying assets used for benchmarking purposes. Furthermore, in any derivative transaction, a customer may suffer losses directly from changes in credit standing. In some cases, losses exceeding the initial amount of principal may be incurred. When the ISDA Master Agreement of the counterparty stipulates that the Credit Support Annex applies or when a credit event occurs with respect to the reference agent, the seller of protection will be obliged to pay the designated amount. When such an amount exceeds the amount of collateral already submitted, the amount of loss so incurred may exceed the amount of collateral that a customer is required to submit in relation to the credit derivative transaction. There is also a possibility that the notional amount of a credit derivative transaction will exceed the amount of collateral to be submitted by the customer. Because the amount of collateral which needs to be submitted varies depending on the details of the security agreement, it is impossible to calculate the ceiling on the ratio of the notional amount to the collateral amount. As a general rule, in a credit derivative transaction, even if a party may want to do a reverse transaction (i.e. a deal to be done by the parties to the credit derivative transaction by mutually changing their respective roles), it is impossible to do a reverse trade at the same price because of price differences.
When there is an exercise period for a right, it is necessary to pay attention to restrictions on the period in which such a right may be exercised. The transaction may be terminated before the scheduled termination date if early termination events, such as an event of cancellation before maturity or an event of automatic termination, are set forth. Please carefully read the details in the "documents to be delivered before concluding an agreement" or the prospectus before actually entering into a transaction.