1. Reasons for Amendment

This Amendment to the Regulations on the Issuance and Public Disclosure, etc. of Securities addresses and improves upon a number of weaknesses that have emerged from the operation of the current system in relation to (redeemable) convertible preferred shares.

2. Major Provisions

A. Strengthen the obligation to publicly disclose (redeemable) convertible preferred shares with call options (Article 4-4)

For (redeemable) convertible preferred shares with call options issued by a stock-listed corporation, prescribe compulsory public disclosure if the call options are exercised by a third party or if a listed corporation sells its own (redeemable) convertible preferred shares to a third party.

B. Restrict limit on the exercise of call options by major shareholders, etc. in relation to (redeemable) convertible preferred shares with call options (Article 5-24-2)

If (redeemable) convertible preferred shares with call options are issued to a major shareholder or affiliated persons thereof, restrict the limit on the exercise of the call options to the percentage share at the time of the issuance of the (redeemable) convertible preferred shares.

C. Modify the conversion price adjustment system (Article 5-24-2)

For (redeemable) convertible preferred shares with an adjustable conversion price, modify the conversion price adjustment system by introducing regulations on conversion price determination, decreases, increases, etc. equivalent to those for convertible bonds.