Spouse and Child

(Y) Yes.  They have the child.

Article 900 set out the Statutory Share in Inheritance.

Article 900 If there are two or more heirs of the same rank, their shares in inheritance shall be determined by the following items:

(i) if a child and a spouse are heirs, the child’s share in inheritance and the spouse’s share in inheritance shall be one half each;

The spouse is one half and the child is one person, (2 x number of people) per person. In addition, although there was a child, if the child has already passed away, the grandchild will inherit on behalf of the child (suicide inheritance).

As a text, Civil Code 887 (inheritance rights of the child and its transferees) set out the heir.

 Article 887

(1) The child of a decedent shall be an heir.
(2) If a decedent’s child has died before the commencement of inheritance, or has lost the right to inheritance by application of the provisions of Article 891 or disinheritance, the child of the decedent’s child shall be an heir as an heir per stirpes; provided that this shall not apply if the child is not a lineal descendant of the decedent.
(3) The provision of the preceding paragraph shall apply mutatis mutandis to the case where an heir per stirpes has died before the commencement of inheritance, or has lost the right of inheritance as an heir per stirpes by application of the provisions of Article 891, or by disinheritance.

The inheritance of legitimate child and child who is not legitimate in the past has been different, although there was a difference in the past (900 Civil Code).

Surviving spouse

It is a case to think about a case where there is a spouse.

In this case, spouse will always be the heir.

Article 890 The spouse of a decedent shall always be an heir. In this case, if there is a person to become an heir pursuant to the provisions of Article 887 or the preceding Articlethe spouse shall be of the same rank as thatperson

  The next question is whether or not there is a child.

First rank heir

Is there any child to the deceased?  (In this case,  including cases where they have already died, including adopted cases )?

The choices here are:

(Y) Yes. There are

(N) No.Not at all.


Who is heir(Japanese law)?

Tthe person who died  is called a decedent (a person who is inherited) A person who inherits the rights and duties of the decedent is called the heir.

The civil law set out the scope of the heir  in the Part 5(Inheritance).

Article 882 Inheritance shall commence upon the death of the decendant.

However,it’s rather difficult to understand who is heir.So I develop a chat bot, or made a hypertext structure page as follows,

so let’s check it.

First of all, it is the first question.

Is there surviving spouse for those who passed away?

As an answer

(Y) Yes. there is

(N) No. there is not

Move to each case.


legal Issues of Stock trading in AI era Part3

In stock trading in the AI ​​era (part 2), I mentioned the amendment of the Financial Instruments and Exchange Act to respond to specific problems. Here, I will show you an interesting cases before mentioning the detailed content of amendment.

Hokuetsu Kishu Paper Company stock price manipulation case (February 16, 2011 decision).

Market manipulation is prohibited under theFIEA Article 159  section2  (1) .

It set out that

(2) No person shall commit any of the following acts for the purpose of inducing sales and purchase of Securities, Market Transactions of Derivatives or Over-the-Counter Transactions of Derivatives (hereinafter referred to “Sales and Purchase of Securities, etc.” in this Article):

Of course,it may be  an issue about “for the purpose of inducing sales and purchase of Securities” when using the algorithms.But it is the same even if it is a transaction using an algorithm.

You can see the detils of the transaction on the website of the Stock Exchange Oversight Committee (Recommendation).

Basically algoritms are as follows;
Selling order without intent to make a deal
Buy order
Change the limit price to a price which there is no possibility of deal
Change the limit price again near the best quatation value

However, as an interpretation theory, it seems that such “marbles” are being carried out on a daily basis, and if so, the requirement for incentive purposes of “inducing sales and purchase of Securities” It seems to be argued that it will not be satisfied.

In IOSCO’s report, in Recommendation 5, “Market authorities should be monitored for new forms or types of market impediments that technological development can bring, and appropriate measures should be taken if necessary”

Also, in response to the WG report, the amendment of Financial Instruments and Exchange Act was proposed and  passed the National Assembly.

Materials related to this amendment can be accessed from this page(Japanese).

In English,AMT Law Offices’ report may be useful.

The law itself is not only responsive to high-speed transactions, but also includes

(1) introduction of fair / disclosure rules,

(2) development of legislation concerning high-speed transactions (high-speed trading of stocks, HFT) of shares, etc.,

(3) flexibility of the scope of operations of the financial instruments exchange group And so on.

Outlines are set out in the AMT paper.

Specifically, Article 2, para. 41 after the revision of the same law set out

“High frequency trading means the actions as set forth in (i) through (iii) below where the decision making concerning such actions is determined automatically through an electronic information processing system, and the information necessary for the sale/purchase of securities or the market transactions of derivatives5 based on such decision is communicated through information technology to the financial instruments exchange or any other person specified by the Cabinet Office Ordinance, with the methods to be used in order to shorten the time usually required for such communication to be specified in the Cabinet Office Ordinance (except those specified by the Cabinet Order as actions which are considered harmless for the purpose of protection of investors, considering the details of such actions):

(i) Sale/purchase of securities or market transactions of derivatives;

(ii) Entrustment of the actions described in (i); and

(iii) In addition to (ii), actions related to those described in (i) which are specified in the Cabinet Order to be equivalent to those described in (i) and (ii).”

And a registration system for traders who conduct high-speed algorithmic transactions (high-speed trading actors, 42 paragraphs) is introduced (Article 66 ss 50).

Traders are required  to take

(1) measures relating to system development and risk management

(2) measures relating to information provision to the authorities, etc.

(3) other provisions .

(1) measures relating to system development and risk management

System development (Article 66 -55)

As measures related to risk management, Proper management and operation of trading system (57),

appropriate business management system ·

Secure of property basis (58),

establishment of representatives or agents in Japan (in case of foreign corporation)

 (2)  measures relating to information provision to the authorities,

 Report  to authorities about performing high-speed transactions  & transaction strategies.

Create and save transaction records (58)

Regulatory review / inspection / business improvement order etc by the authorities etc. (58, 60, 67)

(3) As other provisions

 Prohibition of brokerage commissioned by a securities company from those who do not register at high speed, etc. Investigation by exchanges for those who conduct high-speed transactions (Article 85-5)

When introducing the WG report,there is criticism that there is a hindrance to price formation focusing on the profitability (original corporate value) of companies from medium- to long-term  view in the stock market where the share of algorithmic high-speed trading accounts for a majority.

In stock trading, there are two methods of trading.The one is “fundamental trading” which focus the profitability  of the company.The other is “technical  trading” which focus on price fluctuations themselves. The popularity of “technical  trading” is  not a problem caused by AI technology because that  existed before algorithmic trading became popular.


Ikuo Takahashi will have a talk about legal chatbot in the AI symposium

Ikuo Takahashi will have a  talk about legal chatbot in the AI symposium.

The symposium,titled as “Does AI change legal practice?”,will be held as follows;
(In Japanese)

Date and time
Wednesday, November 29, 2017, 13: 00-16: 00

Location Bar Creole 2F Creo A
Access http://www.nichibenren.or.jp/jfba_info/organization/map.html

The theme “Artificial intelligence changes legal affairs?”

Program (planned)
1 Achievement point of current artificial intelligence technology
Japan Microsoft Corporation
Principal software development engineer
Daiyu Hatakeyama

2 Practical efficiency improvement by utilizing AI technology
Nippon Catalyst LIMITED
Michigan lawyer USA
Tracy Greenwood

3 Legal consultation support by chat bot
Lawyer Ikuo Takahashi

4 Impact of population intelligence on future practice
Director Mete Yazuji, LexisNexis Japan Co., Ltd.

5 Legal Issues of Legal Practice of Artificial Intelligence
Attorney Aya Saito
6 Panel Discussion

You can access the announcement by Japan Law Foundation.

draft of a proposal (September 18, 2015) on the Arrangement of the international jurisdictional legal system for Personal status case and Domestic Relations cases

When I tried to compile the homepage about the affair of the International Family Law, I noticed that there was a draft of a proposal (September 18, 2015) on the Arrangement of the international jurisdictional legal system for Personal status case and Domestic Relations cases.

Regarding the case of property-related cases, the provisions of international jurisdiction have been established under the amendment of the Civil Procedure Law of 2011 and the Civil Provisional Remedies Act, but the international jurisdiction of Personal status case and Domestic Relations cases is not clear the same as the before amendment.

Personal status litigation Act Article 29 -1 set out as folloes;
For purposes of the application of the provisions of the Code of Civil Procedure in the procedures for personal status,Civil Procedure Law Book1 Chapter2 Section1,Article 145-3 and 146-3 might not be applied.

This civil procedure law Book 1, Chapter 2 section 1 set out “the jurisdiction of the Japanese court”. The section set out Article 3-2, etc. (jurisdiction by the address of the defendant etc.) .
So it is said that international jurisdiction over Personal status case and Domestic Relations cases remains unclear yet.

The draft of the above propose the international jurisdiction over Personal status case and Domestic Relations cases as follows;

Ⅰ Personal status case

1 Jurisdiction of Personal status case
2 Jurisdiction by consolidation of related claims
3. Jurisdiction of the case and others concerning the custody of the child
4 Disapproval of actions due to special circumstances

Ⅱ Domestic Relations cases

1 Jurisdiction of Judgment Case, etc. of Initial Guardianship Initiation
2 Jurisdiction of the trial case of the disposition concerning the management of property of absentee
3 Jurisdiction over the trial case of the declaration of disappearance
4 Jurisdiction of the trial case for the appointment of a special agent for appeals against denial of legitimacy
11 Jurisdiction of trial cases concerning inheritance
12 Jurisdiction of the trial of the disposition concerning the distribution of property
13 Jurisdiction of Domestic Relations casesmediation cases

Ⅲ Recognition and enforcement of a judgement determined in the case of the third foreign court’s domestic affair

They seems become extremely interesting.

Stock trading in AI era Part2

Next let’s see what kind of legal problems will arise when AI technology is applied to stock trading.

Let’s show issues and domains in this figure.


This figure shows three domains of issues

(1) Relationship between investors and AI / API providers (problems of autonomy)

(2) Issues of the technology itself

(3)Issues with the market,



It is analyzed from each point of view.

(1) Autonomy of stock trading

If an investor uses autonomous stock trading systems to conduct stock tradings,it is the problem whether the investor has the whole  the responsibilities of the trade ,or  the provider of the system in operation  is responsible of the trade.In other words, it is said that investors make investment decisions on their own. Legal issues  in Robo Advisors service are also discussed from this point of view.

It means that such kind of service may fall under the Financial Instruments Businessas stipulated by the Financial Instruments and Exchange Act.

 Article 2, para 10

the purchase and sale of Securities or intermediation, brokerage, or agency for it, using an electronic data processing system, conducted through any of the following price formation methods or other similar methods, with a large number of persons participating simultaneously as parties on one side of the transaction or as parties on both sides of the transaction (excluding those specified by Cabinet Order as transactions that are found to be inappropriate in terms of investor protection if conducted outside a Financial Instruments Exchange Market or an Over-the-Counter Securities Market (meaning an Over-the-Counter Securities Market provided for in Article 67, paragraph (2)));

 Article 2, para 11

conclusion of a contract in which one of the parties promises to provide the other party with oral, written (excluding newspapers, magazines, books, or any other written work that is issued for sale to many and unspecified persons and which many and unspecified persons can buy as needed), or any other form of advice about the following things, and the other party promises to pay remuneration for this (such a contract is hereinafter referred to as an “Investment Advisory Contract”), and provision of advice under such Investment Advisory Contract;

 Article 2, para 13

agency or intermediation for the conclusion of an Investment Advisory Contract or a Discretionary Investment Contract;

Article 2, para 14

the management (excluding management that falls under the category of act set forth in (xii)) of money or other property contributed by a person that holds rights indicated on the Securities specified in paragraph (1), item (x) or other rights specified by Cabinet Order, as an investment in Securities or in rights connected with Derivatives Transactions, based on investment decisions that are grounded in an analysis of the values, etc. of Financial Instruments;

Article 2, para 15

the management (excluding management that falls under the category of act set forth in (xii)) of money or other property invested or contributed by a person that holds the following rights or other rights specified by Cabinet Order, as an investment mainly in Securities or in rights connected with Derivatives Transactions, based on investment decisions that are grounded in an analysis of the values, etc. of Financial Instruments;

Interpretation details will be discussed in another opportunity.

FSA publishes “Comprehensive Supervision Guidelines for Financial Instruments Business Operators” (September 28, 2008) and VII – 3 Procedures (Investment Advice, Agency Business) 1 Registrationof the guideline set out when registration is required in general.

According to the guideline, “To provide investment information for analyzing the value etc. of securities or the value of financial products, etc for unspecified large number of people by the way which  number of people can purchase at any time from time to time” is only assisting investors’ voluntary judgment, that is, investment judgment is considered to be done by investors by themselves. Therefore, even if such a judgment is provided as a program based on an algorithm, it can be said that the provider does not need to register investment advice / agency business. Even if investors are damaged by doing business based on that program, it is considered that no responsibility will be pursued from any person.

On the other hand, when using software, it may be necessary to continuously receive data, such as investment information etc., from other distributors etc, and other support. In such cases,the provider need the registration of the business.

In addition, there is the case where a company providing such a program is entrusted with the ID and password of the account the investor uses for the transaction, and the company uses the system to place orders for trading (Administrative disposition against Investment College on  October 20, 2013 FSA). In the case, it is considered to be in a situation where the  ordering authority is delegated to the provider. In this case, the program provider is not only not only providing the program to the customer but also the business related to the investment management business (Article 28, paragraph 4 of the Financial Instruments and Exchange Act) . So, in such a case, the provider have to register for the investment management industry.

Especially when thinking about individual investors, if autonomous decisions based on investment decisions made by such AIs can cause significant damage that goes beyond the assumption, there arises a problem of how to protect them.

(2) Problems of the stock trading system itself

The issues of the stock trading system itself is whether nad how to prepare a mechanism to prevent such problems in autonomous stock trading systems themselves which would damage investor’s property far beyond their imagination.

Specifically, this problem, , are discussed in Japan under the “Chapter 3 High-Speed Algorithmic Trading” in  the report of Market WG of the Financial Council (Report by the Working Group on Financial Markets under the Financial System Council —Initiatives toward Stable Asset Building and the Development of Institutional Systems related to Markets and Exchanges—) together with the problems related to securities transactions and markets as described later.

So, here it will be helpful to look at the description of “Chapter 3 High-Speed Algorithmic ” in that report. There, it is said that “In response to these trends, the share of orders through the co-location area among all orders at the TSE in 2016 amounted to around 70%, and that of transactions executed reached 40-50%. This indicates a greater share of automatic high-speed algorithmic trading typically utilized at the co-location area to place, modify and cancel orders concerning financial products.”(page )

Then,”it is appropriate to develop a regulatory framework in which high-speed algorithmic traders are required to be registered with the authority while giving consideration
to regulatory responses taken by other jurisdictions. This framework is intended to require high-speed algorithmic traders trading in the Japanese markets to meet organizational/system requirements including risk controls, and to allow the authority to identify transactions and trading strategies of such traders.”(Page 18)

And in the WG report, as for technology,

a)Whether high-speed algorithmic trading responds to a market event in a way that it is involved in one-sided movement in the market resulting in markrt disruption.

b)In the event of emergencemergencies such as abnormal order placements/executions and and a cyberattack, whether the impact would be exacerbated by high-speed algorithmic trading to spread throughout the entire market instantly and whether system vulnerabilities of high-speed algorithmic traders cause system trouble to develop into a develop into a develop into a develop into a serious market-wide problem
are pointed out.

(3) Relationship between securities transactions and markets

This is the legal issues whether the autonomous algorithm of stock trading shoul be subject to regulation in relation to the securities market, what is the responsibility in that case, and how to think about cases if they have a market power in the market.

In the aforementioned WG report,

c) Whether high-speed algorithmic trading causes a sense of unfairness that individual investors and institutional investors making investment decisions from the medium – to long -term perspective cannot compete with speed algorithmic traders and discourage those general investors from investing in the market;

d)Whether high -speed algorithmic trading undermines the price discovery functions of the markets based on medium – to long-term profitability or enterprise value where high-speed algorithmic trading, some of which takes short, some of which takes short , some of which takes short , some of which takes short , some of which takes short, some of which takes short , some of which takes short term strategies, accounts for the majority of market transactions.

e)Whether high-speed algorithmic trading undermine the market integrity at a time when some cases of the inappropriate trading, such as market manipulation , areare reported to use algorithms in Japan as well as the United States and Europe in Japan as well the United States and Europein Japan as well in the United States and Europe in Japan as well the United States and Europe in Japan as well the United States and Europe.

The problem are raised.

Based on these discussions, “Law to amend part of the Financial Instruments and Exchange Law” was proposed, passed by the National Assembly, and passed.
Let’s consider the actual incident on these issues and the contents of this revision method with the following entry.

Stock trading in AI era Part1

From the discussion such as” Legal issues of online securities business “(“Shinkyo reports 5 (3), 17 – 31, 2001 – 08) , securities transactions have completely changed their appearance for 15 years. it will be one of the most changed fields by networking society.

Online transactions have become generalized and the securities market has become fragmented (a dark pool is developing, which is a place of business where a large number of markets are established and a private trading system is also opened and transaction information that does not disclose sign information is made) . In addition, autonomous algorithmic trading is developing very closely to the majority of the market.

Algorithmic trading can generally be defined as referring to transactions that decide the timing and quantities of stock trading and make orders, according to the program formulated in advance. Among them, the whole transaction made at high speed and high frequency is called high frequency transaction (HFT). Institutional investors and others are conducting such transactions and are beginning to show an extremely large presence in actual securities transactions.

It is said that such high-frequency trading has merits such as efficiency of price finding function and liquidity. On the other hand, it seems to be pointed out that there are various problems. IOSCO’s “Regulatory Issues Raised by the Impact of Technological Changes on Market Integrity and Efficiency” (outline version in Japanese) are risks of market efficiency, risks on market fairness and robustness, We describe risks to market elasticity and stability. Besides these, it is pointed out that issues regarding best execution, narrowing the scope of market participants, program operation by market, regulation cost problems, etc. are pointed out.

By the way, let us consider this algorithm transaction and the current “Stock trading using AI”.

In the first place, AI is a too generic name, it is a concrete technique, and it itself can not be said to lead something productive conclusions. Among my friends, AI is a childhood name and talks about “AI grown up theory” that when AI grown up  in “the formal clothes”, AI will be  given “Grown Up” name such as natural language analysis or image recognition among the university professors, there are many people who surprisingly support.

Aside from that, when discussing with AI in the form of stock trading, I think that it is possible to think that there are two directions. One is to use artificial intelligence to advise customers on asset management and the other is to make it possible to use the results of analysis by artificial intelligence regarding the behavior of securities trading algorithms .

Regarding the former, it is called a so-called robot adviser / service, and its legal issues are also being studied (Hiroyuki Hasegawa “FinTech and its legal issues in the securities field” NBL 1081, page 71 (Commercial Legal Affairs, 2016)).

Regarding the latter, in terms of using analysis results by artificial intelligence, specifically speaking, from the point of view of what artificial intelligence technology I can do it.

As being published in business
Stock price rise prediction system
A system that analyzes time series stock price data by RNN (recurrent neural network)
And others have been announced.

Also, academically,
Application to momentum trading strategy
Application of event-based stock price prediction using natural language analysis
We will be in the category of this AI technology such as.

Let’s examine in detail what kind of thing can be mentioned as a specific legal problem concerning the application of securities trading of such AI technology.