IBSJ FAQs

Interactive Brokers Securities Inc. is a Japanese securities firm that is a member of the Japan Securities Dealers Association and an affiliate of the Interactive Brokers Group in the United States.

The securities and money entrusted to us by our clients are kept strictly separate from our own assets (segregated management). In addition, we are a member of the Japan Investor Protection Fund, which provides financial compensation to our clients in the event that we are unable to return the securities or money entrusted to us due to default.

JIPF website: https://jipf.or.jp/en/index.html

Currently Tokutei account is not offered. Therefore, clients are required to file their own taxes.

There is no account maintenance fee.

Yes, for English assistance please call 03-4590-0711.

Please log in to Client Portal (IBKR's account management system) here and update your address via the following. Click on the head and shoulders symbol in the upper right corner > Settings > Account Settings > Account Profile > Profile > Edit Profile > update your address on the page that follows. You will be required to submit documents as proof of your new address. See list of accepted proof of address documents.

Important: Clients who hold trading permissions for Japanese stocks and Japanese stock options are required to update their information with JASDEC whenever they change their address. To update your information, please log in to Client portal and go to Get Help > JASDEC.

You may begin trading once funds have been deposited and credited to your account. Please log in to Client Portal and apply for trading permissions via the following. Click on the head and shoulders symbol in the upper right corner > Settings > Trading > Trading Permissions.

Important: You must be registered with JASDEC to trade Japanese stocks and stock options. To register with JASDEC, please log in to Client Portal and click Help > Support Center > Information and Tools > JASDEC Please note that JASDEC registration typically takes 3-business days to complete after submission. You may begin trading once registration is completed.

Please confirm that your application for registration with JASDEC is complete. Contact Client Services if you require additional assistance.

Yes, we offer margin accounts for margin trading. For details, please refer to the “Margin Account” section below.

Yes, short selling is available with a margin account under certain conditions. Please refer to the Margin Account section below for more details.

One demo account is granted per account. We refer to demo accounts as paper trading accounts. When logging in to our platforms, please select Paper Trading on the login screen and log in with your live trading user ID and password. The account number for the paper trading account will begin with DU. Please do not confuse this with your live account.

We do not allow double trades. A buy or sell order will be offset by an equivalent opposite trade. Cross trading is also not allowed on the IBSJ platform.

There are no position limits as long as IBSJ margin requirements are met. However, please note that if our own risk assessment deems a client's position to be too risky, a margin requirement that significantly exceeds the legal margin amount will be required.

It is not possible to specify lots. The average price of positions is used to calculate realized gains/losses on the trading tools. Additionally, gains and losses on trading statements (Activity Statements) are calculated using the first-in, first-out (FIFO) method.

Since the account is a domestic account, fund transfers from Japanese banks will be domestic remittances.

You can withdraw the funds three business days after the funds' arrival.

Withdrawal requests cannot be immediately submitted. Withdrawal requests can be submitted the day after the settlement date (US Eastern Time).

Quick Deposit is not supported.

We offer two free withdrawal requests per calendar month. After the second withdrawal (of any kind), IBSJ will charge JPY 1760 (+ tax) for any additional withdrawals.

No. Only deposits in the name of the account holder are accepted. For individual accounts, only deposits from bank accounts in the same individual's name are accepted. For corporate accounts, we only accept deposits from bank accounts in the same corporate name.

Yes, you can deposit/withdraw USD, EUR and GBP to/from your IBSJ account. Transfers for these non-JPY currencies are an international wire, not a domestic wire. Please check with your bank transfer fees, including lifting charges.

Fund transfers from a joint bank account are not permitted. Please send funds from a bank account held in your name.

As of July 1, 2026, Japanese regulators mandate the use of Passkey as the standard authentication method. For additional details, please visit: https://www.interactivebrokers.co.jp/jp/general/activate-passkey.php

SMS is sent to the mobile phone number registered when applying for an account. Though you can edit the phone number in Client Portal, you must call our Client Service desk to make any changes to your registered phone number.

No. As of July 1, 2026, Passkey is the required authentication method at IBSJ and cannot be disabled.

We offer three types of accounts: a Cash Account, a Margin Account, and NISA Accounts (GNISA + ANISA).

A Cash Account and a Margin Account can be held independently of one another, and you do not need a Cash Account to open a Margin Account. If you already hold a Cash Account, you may open a Margin Account separately.

A Cash Account is required to open a NISA Account. If you hold only a Margin Account and wish to open a NISA Account, you may open a Cash Account and a NISA Account simultaneously. If you already have a Cash Account, you may open a NISA Account at any time.

Stocks available for margin trading at IBSJ are at its sole discretion. In principle, they are all the stocks listed on TSE, and US stocks qualified for margin trading under Japanese rules. Detailed information on these stocks including margin rates applicable, etc., are available after log-in.

While the margin regulations in Japan give IBSJ the right to use (including pledging or loaning) the securities used as margin collateral, the regulations do not grant the right to use fully paid stocks in the margin account. Instead, IBSJ enters into stock borrow/lending agreements with its margin clients under which it has the right to borrow securities in the clients account. It does this in order to finance client margin trades and enable your ability to trade on margin. When IBSJ exercises its right of borrow, IBSJ will deposit JPY cash collateral into your account.

IBSJ will only exercise its right of borrow over stocks in the client's margin account up to the margin amount for both securities (i.e., the margin loan) and derivatives trading (i.e., the margin requirement for derivatives positions). IBSJ determines which stock to use based on a number of factors including availability of and demand for borrow, etc. Any stock not available for use is segregated (Note: If client has elected to participate in the Stock Yield Enhancement Program (SYEP), stock may be borrowed under that program).

The daily statement will show which stocks are segregated and not segregated. For the stocks that are not segregated, it will show which stocks IBSJ has borrowed. The daily statement also shows which stocks are being lent under the Stock Yield Enhancement Program (SYEP).

When opening new stock long positions in your IBSJ margin account, cash is used first to purchase fully-paid stock, and that fully-paid stock is then used as a security deposit (Initial Margin) on which you can borrow, and thus buy more stock on margin. Only qualified Japan and USA listed stocks can be used for margin trading at this time. See Margin Trading Examples

In order to maintain your portfolio, you must maintain adequate margin, via having enough Net Liquidation Value (NLV) in your portfolio. NLV is generally calculated as the value of the positions in your portfolio minus the amount of borrow.

The Initial Margin (i.e. to open the position) and Maintenance Margin (i.e. to keep a position open) are calculated and received independently for stocks and derivatives. For Japanese products, the existence of a hedged position may reduce your market risk but does not reduce your margin requirement. For foreign securities options, having a hedged position may reduce the margin requirement for the derivative. In all cases, a hedged position does not reduce the amount of stock IBSJ has the right to use. Please utilize the trading platform’s Check Margin function to confirm the margin requirements for specific positions.

The Margin Statement is used to explain how IBSJ calculates the necessary Initial Margin (IM) and Maintenance Margin (MM) required to hold the positions in your margin account. The details show the IM and MM requirements for holding positions in the given securities as calculated on a split between margin collateral (those stocks purchased with funds borrowed from IBSJ) and security deposit (those stocks being used to ensure the IM and MM requirements are being met in the account).

Note that these will not necessarily match to what is shown on the Collateral Statement, as that shows what stocks are actually being used by IBSJ vs segregated.

However, the economic totals will always match; the Collateral Statement will always show a balance of segregated securities that is at least equal to the necessary security deposit (IM / MM) to maintain the margin loan.

The Collateral Statement shows, on an End of Day basis, what stocks are being borrowed by IBSJ (typically to be lent out in order to generate revenue to fund the margin loan provided by IBSJ to the client):

1. segregated
2. not segregated (i.e. can or are being used by IBSJ),
3. used/borrowed by IBSJ (i.e. lent out to a 3rd party, etc.), and
4. used/borrowed by IBSJ under SYEP (for which client will be paid a borrow fee)

The value of segregated stocks will always be at least equivalent to the security deposit (IM/MM) necessary to maintain the margin loan. Note that the number of shares in #2 may be greater than #3 and #4, in that some stocks may have been un-segregated but not yet used by IBSJ; for example, if IBSJ is about to lend out a stock to a 3rd party but has not done so yet, or lent out stock has been returned to IBSJ but not yet segregated.

Note, in regards to Japan stocks, in nearly all cases the number of Japanese stocks in #2 will be the same as those in #3 / #4, i.e. IBSJ will typically only remove stocks from segregation specifically to use them. This is not necessarily the case with USA stocks.

Also note that any margin-trading related stocks not being used or otherwise not segregated, will indeed be segregated (i.e. #2 + #1 will always equal the total number of stocks in the portfolio.)

Leveraged forex trading is not permitted in a margin account. If your account is long currency A and short currency B on a given settlement date, IBSJ will automatically convert currency A into currency B to extinguish the currency B debit balance for that settlement date. These trades will display as forex trading on your statement.

Clients are allowed to trade out of gross balances themselves. However, if the settlement cycles of these FX trades are not aligned with the securities or derivatives trading activity that cause them, then IBSJ will book FX trades into your account to reduce the gross currency balances for each settlement date.

At the end of each day, IBSJ will automatically convert any non-JPY settled debit balances into JPY.

IBSJ requires cash used to secure short security positions to be in the same currency the underlying security is traded in. If an account has sufficient overall balance across all currencies to secure a short security position, but the balance in the short position's trading currency is insufficient, IBSJ will automatically convert other currency balances into the short position's trading currency until there is sufficient balance in that trading currency to secure it.

IBSJ's margin compliance policy does not provide for an extension to a margin call. In the case of a margin violation/deficit, the account in deficit will be immediately subject to liquidation (e.g. closing positions). Automated liquidations are accomplished with market orders and any/all positions in the account can be liquidated. There are cases where, due to specific market conditions, a deficit is better addressed via a manual liquidation.

Any open position, including non-base currency, can be closed by IBSJ when the account is in a real or projected margin deficit. A liquidation is done automatically, and the liquidation algorithm decides what to close. Please remember that IBSJ's liquidation system is designed to close positions to reduce margin requirements and ensure the account becomes margin compliant.

If you want to decide what positions to close, then you need to actively monitor your account values and add funds or reduce positions when your account's Margin Cushion is low.

You have the ability to request one position be considered to 'Liquidate Last' but that is a request only and not a guarantee for what will be liquidated when the account is in a margin deficit. To choose a specific symbol to 'Liquidate Last', while logged into TWS, right click over the desired symbol, and then select 'Set Liquidate Last'.

Please note:

While IBSJ provides clients the opportunity to pre-request the order of liquidation in the event of a margin deficiency in their account, such requests are not binding on IBSJ. In the event of a margin deficiency in a client’s IBSJ account, IBSJ retains the right, at its sole discretion, to determine the assets to be liquidated, the amount of assets liquidated, as well as the order and manner of liquidation. Clients are encouraged to consult the terms of the applicable client agreement and the disclosures for further information.

IBSJ will enter liquidation orders in your account to reduce margin requirements when an account is in a margin deficit. In addition, IBSJ will convert residual currency balances less than USD 5 or the non-USD equivalent.

When in doubt, check your Open Orders screen or the TWS Audit Trail. It is also recommended to check your open orders before logging off. Please note, open orders/open position issues are time sensitive. Please call IBSJ immediately and select Trade Issues if you have a question regarding an order, execution or position.

When you invest in a product denominated in a currency other than what you are holding in your Margin account, you do not necessarily need to convert currencies to place the order.

• If you enter an order to open a position in a foreign product (and this results in a trade in that product) and do not have sufficient cash in the product's currency to fund the trade, you will open a margin loan in the currency of denomination of the product. As mentioned above in "What currencies are allowed to have a negative settled balance in a margin account?", the loan balance will be converted into JPY on a settled balance basis.

In the end, it is a trading decision and you are responsible for managing the risk in your account and should, if you consider it appropriate, obtain professional advice about your trading decisions.

The amount of Buying Power available for a given trade in your IBSJ Margin Account depends upon a number of factors, particularly the type of product traded.

The following illustrates an example assuming an account with a balance consisting solely of JPY 1,000,000 in cash, purchasing stocks:

• Japanese stocks and ETFs - Eligible stocks and ETFs are available for margin trading and require an Initial Margin of at least 33%. For example, with JPY 1,000,000 you may purchase Japanese stocks outright and use those holdings as a security deposit, potentially allowing you to borrow up to approximately JPY 2,000,000 for margin trading.
• US-listed stocks and ETFs - Qualified stocks and ETFs are available for margin trading and require an Initial Margin of at least 50%. For example, with JPY 1,000,000 equivalent in US stocks purchased outright and used as a security deposit, you can buy JPY 1 million equivalent worth of stock outright, and use that as a security deposit, you may be able to borrow up to approximately JPY 1,000,000 equivalent for margin trading.
• Other stocks - Stocks listed in Europe and other markets are not eligible for margin trading may only be purchased with cash (i.e., both Initial Margin and Maintenance Margin are equivalent to 100% of the market value).

Important Notice:
The above figures are illustrative estimates only. Actual Buying Power will vary depending on account conditions, the specific security, and market conditions. Margin trading involves leverage and may result in losses exceeding the initial investment. Please ensure you fully understand the risks involved before trading, and make all trading decisions based on your own judgment and responsibility.

The maximum leverage offered for any given stock depends upon a variety of factors, including the listing exchange, any regulatory minimums required by the exchange or its primary regulator, and any house margin requirements imposed by IBSJ.

The maximum leverage allowed on Japanese stocks is 3x (33% Initial Margin requirement) and on USA stocks is 2x (50% Initial Margin requirement.)

Please refer to the Margin Requirements page for more details.

The Initial Margin requirement is the minimum amount which is required to open a new position. Initial Margin may be a component used in various calculations, such as Available Funds. For U.S. stocks, this is 50%. For Japanese stocks, this is 33%.

This is the minimum portion of a new security purchase that an investor must provide as a security deposit. For U.S. stocks, this is 50% of the purchase value. For Japanese stocks, this is 33% of the purchase value. Since IBSJ calculates margin on a real-time basis, IBSJ performs an initial margin requirement check when an order is placed.

NOTE: The stock used as Initial Margin will be valued with a haircut (20% for Japan stocks, 30% for USA stocks).

To ensure an IBSJ Margin Account remains margin compliant, a cash withdrawal request is limited to the amount of Available Funds in the account. In addition, the funds available to withdraw must be settled from any clearing activity and have passed any applicable hold period. If an account holds non-base currencies, then those currency balances may also limit the amount of funds available to withdraw due to any related margin requirement. Note that IBSJ accounts only support cash withdrawals in the following currencies: USD, JPY, EUR, GBP.

Please note:

• IB Securities Japan accounts are not allowed to withdraw funds on margin.

Establishing, and subsequently maintaining, a margin loan requires the following preconditions:

• The client must maintain a "Margin" type account (borrowing is not allowed in a "Cash" type account) and enter into a margin account agreement. Your account type can be found in the Account Information section of your statements. To access recent statements, log in to Client Portal and select Performance & Reports followed by Statements;
• The client must maintain equity of at least JPY 300,000 (or USD equivalent) in the account in which loans are maintained;
• The account maintains sufficient Net Liquidation Value (NLV) to sustain the loan.

Assuming those conditions are met, a margin loan is created by:

• Purchasing a security without having sufficient cash (in the same currency denomination as that in which the security settles) to fully pay for that security at settlement;
• Assessment of a fee in an amount which exceeds the settled funds on hand (in the same currency denomination as that in which the fee was assessed).

NOTE: IBSJ does not issue margin calls and clients whose accounts are no longer margin-compliant are subject to forced liquidation (e.g. sale) of positions to restore margin compliance.

Buying on margin is borrowing cash to open a new position. If the aggregate cash balance in a given account is a debit (negative balance), then funds are being borrowed and the margin loan is subject to interest charges. Note that even if the aggregate cash balance is a credit, a loan may still exist as a result of balance netting or timing differences.

IBSJ does not make margin calls. Real-time liquidations occur when your account has a margin deficiency. Generally, accounts will not have time to deposit funds to meet a margin deficiency. IBSJ sends margin deficit notifications on a best-efforts basis, but this is not always possible in a fast-moving market. In order to determine if your account is margin compliant you should monitor its Excess Liquidity. You can see these values in TWS from menu > Account > Account Window in section Available for Trading.

Assuming the client meets the necessary requirements which consider age, investment objectives, and financial qualifications, they can apply for a margin account.

A margin account will be granted margin on eligible positions as long as the account’s Net Liquidation Value (NLV) remains above JPY 300,000 (or equivalent in USD). Accounts with equity above JPY 300,000 (or equivalent in USD) are eligible for margin trading. How much margin is available to the client for a new order is determined by the account’s NLV and the margin requirement on the positions associated with the new order.

Current Available Funds is what you have available to open a new position. The Available Funds is the Net Liquidation Value (NLV) less the total Initial Margin Requirements (NLV - Initial margin). Upon submission of an order, a check is made against real-time available funds for all open orders plus the order being submitted. If Available Funds after the order request would be greater than or equal to zero, the order is accepted. If Available Funds would be negative, the order is rejected.

Buying Power suggests the value of securities you can purchase without depositing additional funds. Buying Power depends on the Initial Margin requirements of the stocks you wish to purchase on margin.

Maintenance Margin is the amount of funds which must be maintained in order to continue holding a position. This is typically 30% for Japanese stocks and 30% for USA stocks, although brokers can add any amount of a 'house margin' requirement in excess of that, particularly where the security is considered low-priced or subject to volatile price changes. You can monitor your margin values in real time using your TWS/Mosaic Account Window.

A "Margin Violation Warning" is a message that indicates your account is at or close to a margin violation. Whenever an account's Excess Liquidity as a percentage of the account's Net Liquidation Value falls below 10%, the system automatically sends a margin warning message. This message is sent as a courtesy for the account holder to check the account as it is their responsibility to ensure the account does not fall into an Excess Liquidity deficit. Accounts with negative Excess Liquidity are subject to liquidation.

A margin account has the ability to borrow against marginable securities, creating a loan that can be used for trading in additional securities. You can borrow funds to open new positions as long as the account retains enough funds to continue to meet your current margin requirements. When you later deposit (or receive) funds back into your account, that will reduce a negative cash balance in that currency and effectively be repaying a cash loan.

Please note, borrowing on margin and holding a position with a value larger than your own funds increases risk to the account as detailed in the Margin Disclosures.

If you would like to reduce your margin debit balance, you can do so by depositing more funds or by closing a position denominated in that currency.

The Account window of the TWS lets you monitor every aspect of your account activity. Use the Available for Trading section to monitor your account values. Traders should review any line that is highlighted to ensure margin compliance. A securities account is considered to be in margin violation when the Maintenance Margin Requirement is above the Net Liquidation Value (NLV).

When you open a margin account you have the ability to borrow from IBSJ. You cannot set a limit or set only a specific amount of margin to use in a margin account. If the account has sufficient Available Funds, then a new order would be accepted. There is a calculated margin requirement for positions in a margin type account displayed as an Initial margin and Maintenance margin requirement. There are tools available so you can monitor your account’s margin requirements and cash balances in real time or as a daily snapshot.

This situation typically occurs in a Margin account and is often related to the use of margin. There are several reasons why you might see negative balances in some currencies while your overall account balance remains positive:

• Foreign Currency Purchases: If you purchase securities in foreign currencies without first converting your base currency, it can result in negative balances in those specific currencies.
• Automatic Margin Loans: The system may create a margin loan to cover transactions in a specific currency when you don't have sufficient funds in that particular currency.
• Depleted Currency-Specific Balances: When you use up all available cash in one currency but still have positive balances in other currencies, charges such as fees or interest can lead to a negative balance in the depleted currency.

It is important to note that while you may see negative balances in individual currencies, your overall account balance can still be positive due to positive balances in other currencies or the total value of your portfolio.

To manage this situation, you can:

• Monitor your currency-specific balances regularly.
• Be aware of the margin implications when trading in multiple currencies.

Short sale proceeds are included as part of cash held in the account. However, short sale proceeds reduce the withdrawable amount. A withdrawal will not be permitted if the withdrawal would create or increase a debit balance excluding short sale proceeds.

Cash will only be used as security deposit for short sales if the account has a net credit balance across all currencies and the account has insufficient margin-eligible stock to meet the margin requirements of the short sales. IBSJ requires cash used to meet margin requirements of short security positions to be in the same currency the underlying security is traded in. If an account has sufficient overall balance across all currencies to meet the margin requirements of a short security position, but the balance in the short position's trading currency is insufficient, IBSJ will automatically convert other currency balances into the short position's trading currency until there is sufficient balance in that trading currency to meet the margin requirements.

Margin-eligible stock is split between security deposit and margin transactions based on the ratio of (Net cash – short sale proceeds – unrealized losses on CFDs) / cost of long margin-eligible stock.

Initial and maintenance margin for security deposit stock represent the substitute price for securities in lieu of cash at the time of the trade and to maintain margin positions, respectively.

Margin accounts can trade the same CFDs available in cash accounts.

Margin requirements on CFDs can be met with credit cash balances in the account, security deposit stock not currently used to meet margin requirements on other products, unrealized gains on CFDs, and/or realized unsettled gains on CFDs.

Please note:
Unrealized gains and realized unsettled gains on CFDs can be used meet margin requirements on CFDs, but cannot be used to meet margin requirements on other products.

No. Only cash or eligible stocks can be used as security deposits for margin trading or trading derivatives.

No. Withdrawals cannot be made based on excess option value over margin requirements.

The stock exchange may have imposed short-selling restrictions on the issue in question.

Issues subject to such restrictions are updated by the exchanges from time to time. Please check the exchange website for the latest information.

While exchange regulations exempt short-sell orders of less than 50 shares placed by individual margin trading accounts from such restrictions, IBSJ margin accounts do not support this exemption.

The exchange may have implemented enhanced margin requirements for the issue in question.

For issues subject to enhanced margin requirements by the exchanges, IBSJ sets the required margin ratio at 100%. As a result, such issues become effectively ineligible for margin trading, and only cash transactions are permitted.

The 100% margin requirement will apply to existing positions as well after the regulation takes effect. This may result in a margin deficiency. If the deficiency is not resolved, your positions may be subject to forced liquidation in accordance with IBSJ's procedures. Please be advised accordingly.

"Two-story" risk (also called "double-decker" risk) is a Japanese market term describing concentration risk that occurs when an investor uses assets as collateral to borrow funds to purchase more of the same or similar assets. The basic structure is:

Asset A → Used as Collateral → Obtain Loan → Buy More of Asset A
Or:
Assets A & B → Used as Collateral → Obtain Loan → Buy More of Assets A & B

IBSJ's margin account structure operates differently from conventional Japanese margin accounts, which makes understanding two-story risk important.

When you open long positions in your IBSJ margin account, cash (in the same currency as the stock) is first used to purchase fully-paid stock (if applicable). That fully-paid stock then serves as collateral against which you may borrow to purchase additional securities. Unlike conventional margin arrangements where cash itself can serve as collateral, IBSJ's model primarily uses securities as collateral for margin transactions. This means that if you deposit securities and use margin to purchase additional shares of the same stock you already hold as collateral, you automatically create a ‘two-story position’.

Cash deposited into your margin account will automatically reduce any outstanding loan balance in the same currency, with the result that your existing margin positions decrease and your fully-paid securities increase. Those fully-paid securities may then become collateral base for potential further margin transactions.

Because of this structure, two-story positions can arise more readily on the IBSJ platform than on platforms where cash serves directly as margin collateral.

An investor with USD 100,000:

1. Purchases USD 100,000 of Stock A
2. Uses Stock A as collateral to borrow USD 50,000 on margin
3. Uses the borrowed funds to purchase an additional USD 50,000 of Stock A
4. Total exposure: USD 150,000 of Stock A with only USD 100,000 of equity

Impact of a 20% decline in Stock A:

• Total position value: USD 150,000 → USD 120,000 (loss of USD 30,000)
• Loan amount: Remains USD 50,000
• Account equity: USD 100,000 → USD 70,000
• Result: 20% market decline = 30% loss to your equity

Impact of a 40% decline in Stock A:

• Total position value: USD 150,000 → USD 90,000 (loss of USD 60,000)
• Loan amount: Remains USD 50,000
• Account equity: USD 100,000 → USD 40,000
• Result: 40% market decline = 60% loss to your equity
• Likely outcome: Automatic liquidation due to margin requirements

Yes. Two-story positions can arise unintentionally. If you deposit cash, purchase Stock A with that cash, and later use margin to buy more of Stock A, you have created a two-story position—even if that was not your intent. You should regularly review your account to identify whether you hold the same securities in both your fully-paid holdings (serving as collateral) and your margin positions.

Two-story positions amplify losses for the following reasons:

• Both layers decline together: Your initial position and leveraged position both lose value from the same market movement
• Collateral shrinks while debt remains constant: The assets securing your loan decrease in value, but you still owe the full loan amount
• Losses are magnified: Market declines have a greater percentage impact on your equity than on the underlying asset
• Margin calls become more likely: Declining asset values trigger margin requirements that can force liquidation

Yes. Using stocks from the same sector or correlated assets as collateral to buy more of the same sector creates similar amplified risk.

While the examples above focus on long positions, concentration risk also arises in short selling scenarios.

Cash will only be used as a security deposit for short sales if your account has a net credit balance across all currencies and insufficient margin-eligible stock to meet the margin requirements of the short sales. IBSJ requires cash used to meet the margin requirements of short security positions to be denominated in the same currency as the underlying security's trading currency.

If your account has sufficient overall balance across all currencies to meet the margin requirements of a short security position, but insufficient balance in the short position's trading currency, IBSJ will automatically convert other currency balances into the short position's trading currency until there is sufficient balance in that currency to meet the margin requirements.

This automatic currency conversion means that your account's currency composition may change (consistent with the terms governing your margin account) which could affect your overall risk exposure if you hold concentrated positions in securities denominated in a particular currency.

IBSJ continuously monitors:

• Your positions and margin requirements
• Concentration in single securities or sectors
• Use of assets as collateral for margin loans

To limit two-story and concentration risks, IBSJ applies:

• Increased margin requirements for concentrated positions
• Reduced loan value for concentrated holdings
• Position limits for certain securities
• Higher margin rates when positions exceed concentration thresholds

CRITICAL: If your account violates margin requirements:

• Positions will be automatically liquidated in real time without prior notice
• You cannot choose which positions are closed
• Liquidations occur at prevailing market prices, which may be unfavorable
• In two-story scenarios, liquidations can create cascading effects as both your position and collateral are reduced
• You remain responsible for any deficits in your account

IB Risk Navigator™ is a free tool you can use to monitor and manage two-story risk.

Key Features

• View concentration by position and sector
• Monitor margin utilization and leverage
• Run stress tests (e.g., "What if Stock A drops 20%?")
• Set alerts for concentration thresholds
• Analyze correlation between positions

How to Identify Two-Story Risk:

• Check if single positions exceed a safe percentage of your portfolio (e.g., >10–15%)
• Review margin utilization to see how much you've borrowed
• Determine if you're using concentrated positions as collateral for margin loans
• Run decline scenarios on your concentrated holdings

You are solely responsible for:

• Understanding when you create two-story risk (using Asset A as collateral to buy more of Asset A)
• Monitoring your concentration levels and margin usage
• Using Risk Navigator and other tools to assess your risk
• Maintaining adequate margin at all times
• Managing appropriate position sizing and diversification
• Understanding that positions may be liquidated without warning

NO MARGIN CALL GUARANTEE: IBSJ is not required to issue margin calls or provide advance warning before liquidating positions. Do not rely on receiving a warning.

YOU ARE RESPONSIBLE FOR YOUR RISK: IBSJ's risk parameters and tools are designed to protect the firm and maintain orderly markets. They do not relieve you of responsibility for managing your own risk.

TWO-STORY RISK AMPLIFIES LOSSES: Using assets as collateral to buy more of the same assets magnifies the impact of market declines on your account equity.

LIQUIDATIONS CAN CASCADE: In two-story scenarios, selling positions to meet margin requirements reduces both your holdings and your collateral, potentially triggering additional liquidations.

LEVERAGE MAGNIFIES LOSSES: Market declines will have proportionally greater impact on your account equity than on the underlying asset value when you use margin.

TOOLS ARE NOT ADVICE: Risk management tools are informational only and do not constitute investment advice. Tool availability does not transfer risk management responsibility from you to IBSJ.

PARAMETERS CAN CHANGE: IBSJ may adjust margin requirements, concentration limits, and position parameters at any time without prior notice.

SYSTEM LIMITATIONS: No risk management system is perfect. Technical issues or extreme market conditions may affect system performance.

For complete terms, review your client agreement and the disclosures provided by Interactive Brokers Securities Japan.

This disclosure does not constitute the complete terms and conditions of your margin account. Please consult all applicable agreements and disclosures.

At domestic Japanese brokerages, margin trading accounts are typically limited to Japanese equities and a select range of US stocks eligible for margin trading.

IBSJ's margin account, by contrast, offers access to a board range of asset classes from a single account. In addition to Japanese and eligible US stocks, clients may also trade futures, options, and single-stock CFDs, as well as access a wide variety of overseas markets - all from one account.

IBSJ's margin account supports deposits and withdrawals in Japanese Yen (JPY), US Dollar (USD), Euro (EUR), and British Pound (GBP).

If your account balance in the trading currency is insufficient to settle a transaction, other currencies held in your account will be automatically converted to cover the shortfall. There is therefore no need to convert currencies in advance.

On IBSJ's trading platforms, margin for derivatives (such as futures and options) and the margin required for Japanese and US stock margin trading are displayed on a combined basis. This is because IBSJ’s account structure is designed to handle multiple asset classes from a single account, with margin calculated on an integrated basis across asset classes. For a detailed breakdown of margin requirements by asset class, please refer to the Margin Report available in the Client Portal.

At most domestic Japanese brokerages, a margin call system is in place whereby clients are requested to deposit additional funds when account assets fall below a certain threshold.

At IBSJ, the process works as below. We conduct continuous real-time margin monitoring across all asset classes. If the net liquidating value of your account falls below the maintenance margin requirement, forced liquidation may be carried out.

Important Notice:
Forced liquidation may apply across all asset classes. Clients are solely responsible for monitoring their account balances and maintenance margin requirements at all times.

Securities eligible for use as substitute securities (collateral securities) for derivative transactions are limited to Japanese and U.S. stocks that are eligible for margin trading. At the time of order placement, substitute securities are subject to a haircut of at least 50% for U.S. stocks and at least 33% for Japanese stocks (i.e., they are valued at no more than 50% and 67% of market value, respectively). For position maintenance, both U.S. and Japanese stocks are subject to a haircut of at least 30% (i.e., valued at no more than 70% of market value).

Please note that the stocks eligible for lending within your account may change on a daily basis depending on market conditions. Therefore, if Japanese stocks purchased with cash in your account are subsequently lent out and continue to be lent out as of the record date, you will not be entitled to receive shareholder benefits. We appreciate your understanding in advance.

We manage margin on a portfolio basis, so Genbiki for individual positions is not supported.

To replicate the economic effect of Genbiki, please follow these steps:

1. Open a cash account if you don't already have one.
2. Deposit additional cash or other securities to ensure that your remaining positions in the margin account are sufficiently margined after a withdrawal of a specific security(ies).
3. Once the additional deposits are reflected, transfer the specific security(ies) to your cash account.

Note: Available funds may fluctuate due to market movements or margin requirements from other positions, which could prevent the transfer or require additional deposits.

If you hold a long position at your IBKR Cash account, please perform an internal transfer via the Client Portal from the Cash account to the Margin account where you hold your short position. Once the transfer is done, the long and the short position would offset automatically.

If you hold a long position at another broker under your name, please request for a position transfer via the Client Portal to the Margin account where you hold the short position. Once the long position settles at the Margin account, it will offset the short position.

Gaika+ is a voluntary benefit program offered by IBSJ, wherein IBSJ will share some of the benefit with you from the currency swaps it undertakes.

Gaika+ allows you to share in the return IBSJ earns when it swaps your eligible, non-JPY free cash balances into and out of JPY daily. A more detailed explanation for how Gaika+ works is available here.

All clients of IBSJ can enroll in the program. There are no eligibility restrictions.

No, there is no charge for enrolling in Gaika+.

No, there is no penalty for choosing not to enroll in Gaika+. Should you not wish to participate, you will not be eligible to earn any amounts on the swaps IBSJ undertakes.

Yes, you can re-enroll at any time.

Manage Gaika+ Participation

Clients who are eligible and wish to enroll or terminate their participation in Gaika+ can use the button above or follow the below procedure:

1. Log in to Client Portal.
2. Click the User menu (head and shoulders icon in the top right corner) followed by Settings.
3. Under Account Settings find the Trading section.
4. Click Gaika+.
5. Enroll in Gaika+ by checking the box and signing the required agreements and/or disclosures. After you enroll, you may terminate participation at any time by unchecking the same box.
6. Click CONTINUE and follow the prompts on the screen.

For the purposes of interest charges and Gaika+, cash balances are adjusted by subtracting short stock value. Stock borrow fee rebates are issued based on short stock value. Thus, gains on short stock positions (decrease in price) will result in an increase in cash eligible for Gaika+ and a decrease in short stock value eligible for stock borrow fee rebates.

Manage Stock Yield Enhancement Program Participation

Clients who are eligible and wish to enroll or terminate their participation in the Stock Yield Enhancement Program (SYEP) can use the button above or follow the below procedure:

1. Log in to Client Portal.
2. Click the User menu (head and shoulders icon in the top right corner) followed by Settings.
3. Under Account Settings find the Trading section.
4. Click Stock Yield Enhancement Program.
5. Enroll in the Stock Yield Enhancement Program by checking the box and signing the required agreements and/or disclosures. After you enroll, you may terminate participation at any time by unchecking the same box.
6. Click CONTINUE and follow the prompts on the screen.

Yes, as a participant of the Stock Yield Enhancement Program you are free to sell calls against your loaned stock at any time. You may also buy and exercise put options.

Disclaimer

• Options involve risk and are not suitable for all investors. Refer to IBSJ's website for a copy of the risk disclosures related to options for more information.

The Stock Yield Enhancement Program provides customers with the opportunity to earn additional income on fully paid securities positions which would otherwise be segregated by permitting IBSJ and affiliates to lend out those securities to third parties. Clients who participate in the program receive 50% of the market-based rate (%) as income.

The loan value for the security loan via the Stock Yield Enhancement Program that is used for determining fee payments is calculated using standard industry convention. For example, in the US market, the closing price of the stock is multiplied by 102% and then rounded up to the nearest whole dollar. The loan value is marked-to-market daily and the activity will be displayed on your statement.

Example

The collateral mark price of a stock which closed at $98 would be $100.

Calculation: 98 closing price * 1.02 = 99.96. Rounded up to the nearest whole dollar = 100

For an SYEP loan of 100 shares, the loan value will be $10,000 (100 mark price * 100 shares on loan).

The fee rate will be paid based on $10,000 of loan value, not $9,800.

The full list of mark price calculations for other currencies is available here.

Warning: These figures are estimates only. They are not a reliable guide to the future performance of this program.

Clients with a stated Liquid Net Worth greater than or equal to JPY 4,000,000 at the time of application, with a Margin and/or Cash Accounts, are eligible for SYEP.

There is no guarantee that all eligible shares in a given account will be loaned through the Stock Yield Enhancement Program as there may not be demand for certain securities, IBSJ and affiliates may not have access to a market with willing borrowers, IBSJ and affiliates may not want to loan your shares, or securities may not be considered to be excess margin (fully paid) securities.

Common stock, ETFs and preferred shares denominated in USD, CAD, CHF, EUR, GBP, HKD and SEK. This includes securities listed on TSX Venture and CSE.

Yes. Clients who cancel participation in SYEP can re-enroll in the program but must wait at least 90 calendar days from the cancellation date before doing so.

Loan value, shares outstanding, activity and income from the Stock Yield Enhancement Program is reflected in the following 6 statement sections:

1. Cash Report: This shows the starting loan value, net change resulting from loan activity (positive if new loans initiated; negative if net returns) and ending loan balance.
2. Net Stock Position Summary: This section displays the lending details for each stock. Net Shares = Shares at IBKR and affiliates - Shares Lent.
3. Fee Accruals: SYEP income is included in the Fee Accrued section and is treated like any other fee accrual (aggregated but only displayed as an accrual when exceeding USD 1 and credited to cash monthly). For year-end reporting purposes, fee income generated from SYEP will be reported on Form 1099 issued to U.S. taxpayers.
4. Stock Yield Enhancement Program Securities Lent: This section displays all securities the account is lending as of the statement date, along with the fee rates and loan amounts.
5. Stock Yield Enhancement Program Securities Lent Activity: Displays the loan activity for each security including newly initiated loans (New Loan Allocation), terminated loans (Loan Return Allocation), the quantities and loan values.
6. Stock Yield Enhancement Program Securities Lent Fee Details: Shows the income received on an individual loan basis including the security, quantity lent, loan value, the market-based rate and the fee amount paid to the account. Fee Paid to Customer is calculated by multiplying the Loan Value by the Fee Rate on Customer Collateral and dividing by 360 days. Please note: This section will only be displayed if the fee accrual earned by the client exceeds USD 1 for the statement period.
7. Fee: The fee is credited to the account on the third business day of the month in the amount of fee accrued the previous month.

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The fee income which a client receives in exchange for shares lent through the Stock Yield Enhancement Program depends on the market-based rate. The market-based rate is determined by taking into account the rates on shares IBSJ and affiliates has loaned to or borrowed from others, and third-party market data. The rate can vary significantly, not only by the particular security loaned but also by the loan date. To determine the customer’s portion of these fees, the market-based rate (%) is applied to the loan value. The resulting amount is then split equally between IBSJ and affiliates and the client. IBSJ and affiliates is allocated a portion of the amount in exchange for initiating, managing, and terminating transactions.

For example, assume loan value of $10,000 and an annualized market-based rate of 15%. The daily fee accrual would be $2.08 accrual.

Warning: These figures are estimates only. They are not a reliable guide to the future performance of this program.

There is no way to prevent a specific stock from being lent out if you are currently participating in SYEP. The program is entirely managed by IBSJ who determines which if any securities it may lend having regard to customer's margin and security deposit obligations, and has the discretion to determine whether any securities can be loaned out and to initiate the loans.

If you wish to restrict some or all of the stocks from being lent out under SYEP, you would need to opt out of the program.

IBSJ determines what are securities eligible are eligible to be borrowed under SYEP with reference to several factors, the two key factors include whether there is any existing margin loan in the relevant account and whether any securities are being used to satisfy margin obligations on any derivative positions in the account (e.g. futures or options positions).

For example, if a client with a cash balance of $60,000 buys securities with a market value of $100,000, their account's margin loan debit balance after the purchase will be $40,000. Under regulation and the terms of its agreement with customers, IBSJ may borrow up to 100% of the account's debit balance's worth of securities from the account ($40,000 in this example). Any securities held by the client in excess of that amount ($60,000 in this example) are eligible to be borrowed under SYEP.

The margin loan cash debit balance is determined by first converting all non-USD denominated cash balances to USD and subtracting any short stock sale proceeds (that is, proceeds realised from any short sales undertaken by customer in a margin account and converted to USD as necessary). For a more detailed explanation on how IBSJ determines the margin loan balance and how the right to borrow works, please see here.

In the event of any of the following, a stock loan created through the Stock Yield Enhancement Program will be automatically terminated in the event of:

• The client electing to terminate program participation
• Transfer of shares
• Sale of shares
• Call assignment or Put exercise
• Account closure

There is no guarantee that all eligible shares in a given account will be loaned through the Stock Yield Enhancement Program because there may not be demand in the securities lending markets for certain securities, IBSJ and affiliates may not have access to a market with willing borrowers or IBSJ and affiliates may not want to loan your shares.

If a client maintains fully paid securities which have been loaned through the Stock Yield Enhancement Program (SYEP) and subsequently initiates a margin loan, the SYEP loan will be terminated to the extent that the securities do not exceed the value of the margin loan. Similarly, if a client increases the existing margin loan, the SYEP loan may again be terminated.

Yes, as a participant of the Stock Yield Enhancement Program you are free to sell your loaned stock at any time.

There is no impact from lending stock through the Stock Yield Enhancement Program on the calculation of your margin and your excess liquidity. Your ability to borrow is still based on your overall portfolio.

In the event that the demand for borrowing a given security is less than the supply of shares available to lend from participants in the Stock Yield Enhancement Program, loans will be allocated on a pro-rata basis.

Example

If IBSJ and affiliates' aggregate SYEP supply is 20,000 shares and demand is 10,000 shares, each participating account will be eligible to have 50% of its shares borrowed.

The loan will be terminated on T+1 of the action date (trade, assignment, exercise) which closed or decreased the position.

Disclaimer

• Options involve risk and are not suitable for all investors. Please refer to IBSJ's website for further information and disclosures on the risks of options.

Shares borrowed through the Stock Yield Enhancement Program may be loaned to counter-parties and are not limited solely to IBSJ and affiliates and affiliates' clients.

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A halt or delisting has no direct impact upon the ability to lend the stock through the Stock Yield Enhancement Program. As long as IBSJ and affiliates can continue to loan the stock, the loan will remain in place regardless of whether the stock is halted or delisted.

If the stock is fully paid, the Stock Yield Enhancement Program will benefit you the same whether or not it has call options written against it.

Yes. IBSJ and affiliates marks-to-market all positions nightly, which is the industry convention.

No, participants in the Stock Yield Enhancement Program do not retain voting rights for shares loaned out. The borrower of the securities has the right to vote or provide any consent with respect to the securities if the Record Date or deadline for voting, providing consent or taking other action falls within the loan term.

No. IBSJ and affiliates may borrow any quantity of shares from your account. However, IBSJ and affiliates will not borrow fractional shares.

Your account was lending shares of stock on the stock's dividend record date. Instead of being paid a dividend, you were paid a Payment-in-Lieu of a dividend, or "PIL." You may experience adverse tax consequences from receiving PIL, instead of the dividend directly from the issuer, while shares were on-loan. This payment is your compensation for potential adverse tax consequences, and is called a "Gross-Up."

Please Note

• Since Interactive Brokers does not know the particulars of your tax situation, the payment is an estimate and the payment amount is final.

IBSJ will take steps to return shares you have lent to us before the record date for any dividends payable in respect of the shares, however IBSJ does not guarantee it will be able to do this. Accordingly, you may not receive dividends, but instead receive a PIL of a dividend which may have a different (and potentially negative) tax treatment for you compared to if you had received the dividend.

Stock loans to IBSJ under the SYEP are technically not “collateralized” in accordance with applicable Japanese regulations.

As explained above, IBSJ lends the shares it borrows from customers to its stock loan counterparty, and when IBSJ undertakes this loan, it obtains a security interest over either US treasures or cash for each loan undertaken with you and lent to its stock loan counterparty. The security interest that IBSJ holds in respect of the US Treasuries or cash is collateral under US laws purposes; it also acts as surety of the stock loan counterparty’s obligations to IBSJ; in particular IBSJ, is able to take control of (and sell, if required) the US Treasures or cash if the stock loan counterparty defaults in its obligations to IBSJ or becomes bankrupt/insolvent.

IBSJ keeps records to:

• Accurately reflect how many shares have been borrowed from each of its clients, and this is the same as the loans IBSJ undertakes with its stock loan counterparty
• Accurately reflect a proportional allocation (equivalent to the number of shares borrowed from each customer) of the security interest it has in respect of the US treasuries or cash (provided by IBSJ’s stock loan counterparty) which it notes as being held in respect of the loan from its customer.

In this way, IBSJ maintain protection for the stock loans it undertakes with its customers via the SYEP.

The only way to prevent IBSJ from borrowing stocks under SYEP is to hold those stocks in an account that is not enrolled for SYEP. For example if you have both Margin and Cash accounts, and agree to SYEP only for the Margin Account, then any stocks in the Cash Account will never be borrowed under SYEP.

The overnight trading session allows you to trade on your timetable and capture more market opportunities by submitting orders for a wide range of US ETFs and more popular US stocks.

The current securities available to trade during the US overnight trading session.

See the exchange listing page by clicking the "Exchange" tab and searching "Overnight" for a complete listing of the available US stocks and ETFs.

Interactive Brokers is now offering the ability to trade US ETF Securities and more popular US stocks during Asia-Pacific (APAC) trading hours.

Please Note

• US stocks are not allowed to be traded on the Overnight trading venue the day before or the day after a corporate action.
• To place orders using TWS, you need TWS build 10.20.1c or later.

The US overnight trading hours are 8pm ET to 3:50am ET Sunday to Friday.

• First trading session of week: Sunday 8pm to Monday 3:50am
• Last trading session of week: Thursday 8pm to Friday 3:50am

Please Note

• Trades executed between 8:00 pm and 12:00 am will carry a trade date of the following trade day.

Market data is provided free of charge during the US overnight trading session.

No, orders from Regular Trading Hours (RTH) and those orders marked to work outside RTH will not be eligible for the overnight session.

When you submit an overnight stock or ETF order, the "overnight" parameter is considered a destination.

Please Note

• To place orders using TWS, you need TWS build 10.20.1c or later.

The commission charged during the US overnight session for IBKR Pro accounts is the same commission you are charged during regular trading hours. For an overview of the pricing structure for US Stocks and ETFs, please refer to our website under the Pricing menu followed by Commissions.

Please Note

• Overnight trading will be treated as SMART routed for commission purposes.

Only Day Limit orders are allowed in the US overnight trading session. In this scenario, "DAY" implies the time during which the overnight market is open. Orders will only be active during the overnight trading hours and will expire automatically at 3:50am ET if not executed.

Trading in fractions is not permitted in the US overnight trading session.

The Overnight venue comprises multiple destinations. We display the best bid and ask from the included providers.

IBKR’s US overnight trading sessions observe the New York Stock Exchange’s ("NYSE") holiday schedule in that IBSJ will not operate an overnight trading session when the NYSE is closed the next day (e.g., if the NYSE is closed on a Friday, we will not operate a trading session that Thursday evening/Friday morning). IBSJ does not adjust the overnight trading hours of operation on days the NYSE has a scheduled early close.

The US Overnight trading venue employs price bands throughout each trading session. It will reject any order with a limit price outside the relevant price bands. Except where otherwise identified, the price band for a given security is the narrower of (i) 90% of FINRA’s clearly erroneous thresholds for after-hours trading (the “FINRA Band”) and (ii) the CME Group U.S. equity index price limits (the “CME Band,” the narrower of the FINRA Band and the CME Band for a given security, the “Outer Price Band”). IBSJ will not apply a price band that is wider than the Outer Price Band.

IBSJ may, in its discretion, apply a price band that is narrower than the Outer Price Band due to unanticipated market conditions. We may elect to apply a price band to a security that is narrower than the security’s Outer Price Band prior to the start of the trading session or after the US overnight trading venue has commenced trading. If we narrow a price band during a trading session, orders resting in the US overnight trading venue that are priced outside the narrowed price band will be cancelled.

For the US overnight trading price bands, the reference price is the security’s closing price as disseminated by the security’s primary listing exchange or, whereas such a closing price was not disseminated, the last disseminated trade for the security during regular trading hours. Except where IBSJ elects to narrow the price band for a security after the start of the US overnight trading venue session, a security’s price band remains static for the relevant trading session.

IBSJ resets the US overnight trading venue price band for each trading session.

You cannot transfer your positions in your NISA accounts to another financial institution. Your NISA positions we hold will be managed by us, and you will also be required to sell them through us.

Our system will confirm funds again up to two business days after the scheduled purchase date and continue the purchase process. If sufficient funds are not confirmed within two business days of the scheduled purchase date, the scheduled purchases for the month will not be made. The purchase will be processed again on the next month's purchase date.

You can sell foreign stocks yourself using our trading tool. For Japanese stocks, please contact Client Services during our business hours (weekdays: 08:30 - 17:30 ). We will purchase them from you at the price we specify. Please note that you cannot sell odd lots of Japanese stocks using the trading tool.

With a NISA account, dividends and trading profits are tax-free, but these trading losses are not considered to exist. Therefore, it is not possible to offset these losses against the dividends and trading profits and losses of other listed stocks held in a general account (taxable account). In addition, it is not possible to carry forward losses (for three years).

It will be treated as if there was no loss in a NISA account with us. Also, it cannot keep being held in the NISA account, so it will be moved to the general account.

You can still hold them in your NISA account until the date of delisting. You can also move them to a general account (taxable account).

Trading gains and losses incurred in a NISA account cannot be offset against gains and losses incurred in a general accounts.

The heir must submit a “Hikazei Kouza Kaisetusha Shibo Todokedesho (Notification of Death of Tax-Exempt Account Holder)” to us without delay after the date of death. We will then proceed to pay out the positions held by the deceased in the NISA account to the general account held by the heir. Please note that, at present, we do not handle mutual funds in general accounts, so you will need to settle the transaction.

Shares held in a taxable account (general account) cannot be transferred to a NISA account (growth investment limit or savings account). If you wish to invest tax-free, please consider making new purchases in your NISA account.

With the new NISA system ( Since 2024 ), the concept of a lifetime tax-free limit has been introduced, meaning that you can invest up to 18 million yen over the course of your lifetime using the NISA system.

You can trade up to a total of 3.6 million yen per year, with 2.4 million yen in the growth investment limit and 1.2 million yen in the accumulated investment limit. For example, if you invest 3.6 million yen each year, you will reach the new NISA lifetime tax-free limit of 18 million yen in the fifth year, and so you will not be able to make any more purchases in your NISA account from the sixth year onwards.

However, Under the new NISA system, if you were to sell all the assets you had invested in NISA in the fifth year, the available balance for the following year (sixth year) would be 18 million yen due to the tax-free limit being reinstated, and you would be able to continue investing 3.6 million yen from the sixth year onwards.

In other words, once you have sold the assets in your NISA accounts, you will be able to continue using NISA even if the cumulative purchase amount exceeds 18 million yen. The amount of tax-free investment that can be made through the sale of assets will be restored and can be reused for assets purchased in the new NISA framework from 2024 onwards. Even if you sell assets purchased under the old NISA framework, they will not be eligible for restoration or reuse. The annual investment limit is 3.6 million yen (1.2 million yen for the investment accumulation framework + 2.4 million yen for the growth investment framework), and even if you have a restored framework, you cannot use it for more than 3.6 million yen per year.

If you lose the “Kanjyo Haishi Tsuchisho (Notice of Cancellation of Account)” before submitting it to another financial instruments firm, etc., you will need to fill in the prescribed items on the “Haishi Tsuchishotou Saikoufu Shinseisho (Application for Reissuance of Cancellation Notice, etc.)” and submit it to us. If the document is not lost but damaged or soiled, you will need to attach the actual document to the reissuance application and submit it to us. For details, please contact Tokyo Client Service.

In order to change NISA providers, you need to submit a "Kinyushohin Torihikigyosha-tou Henko Todoke (Broker Change Form)" to the existing NISA provider. Once the submission is completed, you need to begin your NISA application at IBSJ. You must begin your NISA application at least by 15 September if you wish to complete the change within the same year. You need to submit either a "Kanjo Haishi Tsuchisho (Abolition Notice)" or "Hikazei Koza Haishi Tsuchisho (NISA Closure Notice)" issued by your current NISA provider.

Please submit "Kinyushohin Torihikigyosha-tou Henko Todoke (Broker Change Form)" via Client Portal. After checking the details, we will issue a "Kanjo Haishi Tsuchisho (Abolition Notice)" or "Hikazei Koza Haishi Tsuchisho (NISA Closure Notice)". So once you receive one of them from us, please submit it to the financial institution you are changing to.

To receive tax-free dividends from Japanese stocks, you must choose the "Kabushikisuu Hireihaibun Hoshiki" as your dividend receipt method. It is a method of receiving stock dividends in your securities broker account. In this method, dividends are allocated in proportion to the number of shares held at each securities company and received in a general securities account. Once you select the "allocation based on the number of shares" method at a securities company, the "allocation based on the number of shares" method will be automatically selected for all dividends for listed shares held at the same securities company or other securities companies in a specific or general account (you cannot select a different receiving method at each securities company).

If you wish to receive dividends of listed stocks through the "allocation in proportion to the number of shares method," you must complete the procedures by the record date of dividends for the stocks you own. This procedure takes about 3-5 business days, but please contact Client Services for details.Please note that if you choose the "Registered Dividend Receiving Account Method," you will be subject to taxation when receiving dividends regardless of your NISA account.

With regard to dividends from foreign stocks, the amount of tax withheld at the source in the country of issue is not tax-exempt, but it is tax-exempt in Japan.

You can check your NISA annual and lifetime investment limits in the “Account Window” of the trading tool. Please note that the NISA lifetime investment limit displayed is the tax-exempted investment limit that we are aware of, and it might be recalculated based on the figures of your NISA investment limit released by the National Tax Agency in February each year. In the unlikely event that you purchase shares in excess of your NISA quota, in the case of shares, the excess will be transferred to and retained in your general account as a general account transaction. In the case of mutual funds, the excess will be transferred to the general account as general account transactions. However, mutual funds cannot be held in the general account, so we will ask you to complete the cancellation procedures.

If, after a purchase has been executed in a NISA account, it is discovered that the total purchase amount exceeds your annual tax-free limit or lifetime limit, the following will happen. In the case of stocks, the excess will be transferred to and retained in the general account as a general account transaction. In the case of mutual funds, the excess will be transferred to the general account as general account transactions. However, mutual funds cannot be held in the general account, and the client must take the necessary procedures to cancel the account.

Purchases made through NISA accounts are made by automatic money transfer from a general account. Proceeds from the sale of securities and dividends, etc. in NISA accounts are credited to the NISA account on the date of transfer, and are automatically transferred to a general account.

At our company, you will need to go through the procedure for closing your NISA account after being transferred overseas. Please be sure to submit the “Tax-Free Account Departure Notification Form” by the day before you leave the country.

You are required to transfer or close positions held in your NISA account. Stock positions must be transferred to a general account or closed in your NISA account. You will need to close mutual fund positions in your NISA accounts. After confirming that there are no positions in your NISA account, please complete the NISA account closure procedure through the Client Portal.

With a Growth NISA account, you can trade mutual funds, individual stocks and certain ETFs.

To see which mutual funds are available, go to the "Trading" menu, then click on "Products and Exchange Search," and look under the "Mutual Funds" section. Click on the Launch Mutual Fund Search Tool.

To check available stocks, go to the same "Trading" menu, then click on "Symbol and Exchange Search", and look under the Stocks section.

To check approved ETFs, go to the "Trading" menu, then click on "Symbol and Exchange Search," and look under the ETFs section.

Please note: The "Stocks" section also shows ADRs, REITs, JDRs, and all approved ETFs available for trading in general (non-NISA) accounts. However, these products are currently not available for trading in NISA accounts except for certain ETFs.

You can trade the mutual funds we offer for accumulated NISA account. For details, please see the product page of mutual funds.

You must complete the setup by 13:00 JST to place an order by the order cut-off time on the day.

NISA accounts cannot be funded directly. Funds are drawn from your general investment account.

Each NISA application consists of both a Tsumitate and Seicho account. It is not possible to apply for just one.

The NAV (Net Asset Value) is the price of the mutual fund calculated on a daily basis. The total value of assets is calculated by valuing all the stocks and government bonds, etc. included in the mutual fund at market value, adding in income such as interest on government bonds and dividends on stocks, and then deducting necessary expenses such as trust fees, etc. The NAV is the asset value per unit of beneficiary right, calculated by dividing this total value of assets by the number of beneficiary rights. Depending on the mutual fund, in the case of many mutual funds, the value of 10,000 units is displayed in general.

In order to maintain fairness for investors, investment trusts are not executed at the NAV of the previous business day, which is known at the time of the order. In investment trust transactions, investors place orders to buy or sell without knowing the NAV at which the order will be executed or the valuation of the assets included in the trust. This is called the “blind method”. Therefore, when you buy an investment trust, the number of units calculated using the previous day's NAV may differ from the number of units actually executed when the order is executed.

The prices of assets incorporated in mutual funds, such as stocks and bonds, fluctuate due to various factors. Therefore, the NAV, which reflects the value of the assets included in the mutual fund, will also fluctuate accordingly. In addition, the payment of distributions and the payment of trust fees for investment trusts are also factors that may cause the NAV to fluctuate.

Mutual funds have a trust period (investment period) set by the trust agreement. Some investment trusts do not have a trust period and have an indefinite term. However, if the conditions stipulated in the trust agreement are met, the investment management company may stop managing the trust assets even in the middle of the trust period and return them to the beneficiaries (investors) ahead of schedule. This is called early redemption of the investment trust. The terms and conditions of the trust can be confirmed in the prospectus for request.

The following are typical cases of early redemption:

• When the number of units remaining in the mutual fund falls below a specific size
• When the mutual fund's total net asset value decreases and it becomes difficult to continue asset management.
• When it is recognized that termination of the trust (early redemption) is advantageous to the beneficiaries.

When an early redemption is to be made, the investment management company is generally required to give a public notice or deliver a written notice to all beneficiaries. Beneficiaries are given a period of time to file an objection and may oppose the early redemption in writing. However, if the conditions for early redemption are clearly stated in advance in the trust agreement, redemption can be made regardless of the beneficiary's objection. Therefore, reading the trust agreement is essential.

We only offer mutual funds in our NISA account. Your mutual funds are held using your NISA quota and cannot be transferred to other companies.

The structure of mutual funds ensures that the money deposited by beneficiaries (investors) is systematically protected regardless of the amount invested, even if the respective institutions fail.

In the event of the failure of the distributor
The distributor acts as a contact point for mutual fund transactions and handles funds with beneficiaries. Funds are deposited into a trust bank via the distributor, and the trust bank manages the funds as trust assets, so there is no impact on trust assets even if the distributor fails.

In the event of the failure of the management company
The asset management company only provides investment instructions and does not store or manage trust assets. Since trust assets are kept in a trust bank, separate from the asset management company, there is no direct impact on trust assets even if the asset management company goes bankrupt. The investment trust will either be taken over by another investment management company or redeemed early.

In the event of trust bank failure
An investment trust's trust assets are managed by a trust bank, which is required by law to manage trust assets separately from the trust bank's own assets (segregated management). Therefore, the trust assets are unaffected even if the trust bank fails. Investors can continue to hold their investment trusts as long as the trust assets are either cancelled at the NAV at the time of the failure or transferred to another trust bank.

When purchasing a mutual fund, the client pays the distributor an "initial purchase fee" (we do not charge an initial purchase fee). In addition, "trust fees" are indirectly deducted from the trust assets during the investment period. This fee covers investment management costs and is allocated among the asset management company, distributor, and trust bank. In addition, "audit fees," "brokerage commissions," and other expenses are deducted from the trust assets. In addition, some funds charge a "retained trust asset amount" when purchased or cancelled.

When trading mutual funds, it is necessary to confirm in the prospectus or other documents what costs will be incurred. Knowing how much costs will be incurred is very important when trading mutual funds, so please check carefully. Below is a list of common costs associated with mutual fund transactions. In addition to the costs listed below, there may be other costs, so you should always read through the prospectus before purchasing a mutual fund.

Purchase commission: A fee paid by the client directly to the distributor at the time of purchase. (A sales commission may also be paid at the time of sale.) Some mutual funds and distributors do not charge this fee (no-load). We do not charge a purchase or sales charge, but some funds may charge a fee to retain trust assets.

Trust fee: An investment management fee paid indirectly daily according to the amount of mutual funds held by the client while the client holds the mutual funds. How much you pay on an annual basis is stated in the prospectus.

Audit fees: As a general rule, mutual funds are required to have their accounts audited by an auditing firm, etc., each time the accounts are closed.

Brokerage commissions: Expenses incurred when buying and selling stocks and other securities in which the investment trust invests are paid indirectly from the trust assets each time they are incurred. Since these expenses are incurred due to investment management, it is not possible to indicate how much they will cost in advance.

The amount of money retained in trust assets: These are expenses collected separately from commissions when purchasing or cancelling investment trusts. The distributor does not receive it, but it is retained in the trust assets. Some mutual funds deduct this amount, while others do not.

We do not charge transaction fees when buying or selling. However, some funds that charge a fee for retained trust assets.

This is a fee paid by the client when canceling a mutual fund. The client does not pay it directly, but it is usually deducted from the cancellation fee as a percentage of the NAV. The amount deducted varies depending on the type of mutual fund and is generally around 0.3%. Not all mutual funds deduct the difference between the money held in trust and the amount retained in trust. Many mutual funds do not charge a retained trust fund asset fee.

In some cases, the amount of money retained in trust assets may have been deducted from the mutual funds that have been cancelled. Please check the prospectus to confirm whether or not the amount of money retained in trust assets is deducted.

We do not offer mutual funds in a general account. Mutual funds can only be traded in NISA accounts.

The minimum purchase amount is 10,000 yen. The minimum sale amount is 1 unit.

Switching is selling a mutual fund and purchasing another mutual fund belonging to the same group. Switching between mutual funds with and without currency hedging or between mutual funds with different settlement periods, such as monthly and annual settlements, are examples. Normally, there is no purchase fee for switching, or the fee is lower than when purchasing individual funds. For funds that charge a fee for retained trust assets, a fee for retained trust assets will be charged. However, we do not offer mutual fund transfer (switching) services. We also do not recommend switching.

When purchasing mutual funds, please carefully check the prospectus and make sure to purchase mutual funds that are appropriate for your investment objectives. Although it may be worrisome when the price of an investment trust declines after purchase, there is a possibility that the base price will be equal to or higher than the price before the decline during the medium- to long-term holding period due to favorable market conditions, changes in government policies, or other factors. In addition, even if the price of a mutual fund that has fallen in value increases in the future, the gain on the price increase up to the acquisition price of the mutual fund is not subject to taxation. On the other hand, if a transfer is made, gains on the newly purchased mutual fund will be subject to taxation. (The gain is not subject to taxation in a NISA account.)

Switching mutual funds usually involves a purchase fee, but there are also preferential measures that offer either a free purchase fee or a discounted purchase fee, but we do not offer this service.

In the case of mutual funds that primarily invest overseas, fluctuations in foreign exchange rates affect the price movements of the NAV. Currency hedging is the act of avoiding losses caused by a decline in the currency's value (appreciation of the yen). It is suitable for customers who wish to earn income without being affected by the exchange rate. However, currency hedging has the disadvantages of incurring the cost of hedging (hedging cost) and not enjoying the price appreciation of a weakening yen. No currency hedging is suitable for those who wish to invest not only in the value of foreign stocks and bonds but also expect to earn income from the appreciation of foreign exchange rates.

The NAV of the No Currency Hedged Fund is affected by the exchange rate, so a strong yen will cause the NAV to fall, while a weak yen will cause the NAV to rise.

Loss of principal of a mutual fund means that the NAV of the mutual fund purchased falls below the original investment amount.

Please refrain from short-term trading or short-term switching of mutual funds, as this may lead to higher fees and lower investment results. Holding mutual funds for an extended period has advantages such as a reduced risk of loss of principal, the effect of compound interest, and a reduced cost burden. Therefore, when purchasing mutual funds, please read the prospectus carefully and select the one that best suits your investment objectives.

It is an investment strategy in which mutual funds are purchased and held for a long time. Mutual funds are suitable for long-term holding and profit because the risk is reduced through diversification. Although investments are subject to the risk of loss of principal, mutual funds are one of the financial instruments that allow you to manage your assets efficiently while minimizing the risk of loss of principal.

Orders can be cancelled before the cut-off time for order acceptance for the mutual funds you have placed. Orders cannot be cancelled after the cut-off time. You can check the cut-off time for order acceptance in the Trading Tools.

In principle, mutual funds can be cancelled at any time. However, in the case of mutual funds that invest overseas, there may be times when cancellation cannot be applied due to overseas holidays, etc. Please check the Trading Tools for the dates when cancellation cannot be applied. Please note that it generally takes 4 to 5 business days from the date of application for cancellation until the money is transferred to your account. Some mutual fund issues have a "closed period" during which cancellation is not possible for a specific period. However, there are some cases in which you may be able to cancel even during the closed period. Please check the prospectus carefully before canceling during the closed period.

We do not offer an automatic reinvestment service for distributions. Therefore, you will receive your distributions.

Mutual fund distributions are money (dividends) returned to beneficiaries (investors) in proportion to the number of units held from the income earned by managing the mutual fund. There are two types of mutual funds: those with distributions and those without distributions. There are two types of distributions: ordinary distributions, which are subject to taxes, and principal repayments (special distributions), which are not subject to taxes. Ordinary distributions are paid out of the mutual fund's investment income and are fully taxable. On the other hand, principal repayment (special distribution) is paid out of a portion of the principal and is not subject to tax.

In general, distributions are paid at the time of account settlement in many cases. However, the investment management company determines whether or not distributions are paid, taking into consideration the mutual fund's investment performance and future investment strategies. The investment management company also determines the amount of distributions. The method of distribution can be confirmed in the prospectus.

There are two types of mutual funds: those that pay distributions and those that do not. Mutual funds that pay distributions are usually divided into two types: those that receive distributions as they are and those that reinvest distributions. However, IBSJ does not provide a service to reinvest distributions. Depending on the mutual fund, distributions are received 4 to 5 business days after the settlement date and paid into the client's account.

Mutual funds settle accounts every predetermined calculation period (1 year, 6 months, 3 months, 2 months, monthly, etc.) and pay distributions to beneficiaries (investors) (however, in some cases, depending on investment conditions, distributions may not be paid in the fiscal period).

Notes

• Since distributions are paid out of trust assets, the mutual fund's net asset value decreases as distributions are paid. Since the mutual fund's NAV is determined based on this value, the decrease in net asset value causes the NAV to fall.
• Mutual funds with high distributions do not necessarily have high total returns. The total return is the sum of all income earned from the mutual fund, including gains from the sale of the mutual fund, distributions and changes in NAV.
• The rules of The Investment Trusts Association, Japan, determine the maximum distribution amount. The management company determines the amount of distribution within that limit. Some investment managers may pay out distributions in excess of earnings during the calculation period, resulting in a large drop in the mutual fund's NAV. Even if the distribution amount is high, the total return may not be high, so it is important to compare both when selecting a mutual fund.

More is better is not necessarily the case with mutual fund distributions. Mutual fund distributions are paid out of the trust assets used to manage the mutual fund. When distributions are paid, the trust assets are reduced, and the mutual fund's NAV falls by that amount. It is important to compare good and bad mutual funds based on total return, which includes not only the amount of distribution but also the mutual fund's NAV.

We do not currently offer a distribution reinvestment course. Therefore, you will always receive your distributions.

Investment trust distributions include principal refunds (special distributions), which are paid out of a portion of the principal, and ordinary distributions, which are paid out of the investment trust's investment income. Ordinary distributions are taxable and subject to 20.315% income tax and inhabitant tax as dividend income. Currently, we only offer mutual funds in NISA accounts, so both principal return (special distributions) and ordinary distributions are tax-exempt.

It is difficult to say whether purchasing a mutual fund "before" or "after" distributions are paid is better. Since distributions are paid out of the trust assets at the time of settlement of accounts, the higher the distribution amount, the lower the NAV of the mutual fund. If you purchase a mutual fund just before a distribution payment, you can receive the distribution, but the NAV will be higher. Even if you purchase the mutual fund immediately after the distribution is paid, if the NAV rises more than the distribution paid, you will purchase the mutual fund at a higher NAV.

Considering the total return from the distribution and NAV combined, whether you purchase the mutual fund "before" or "after" the distribution payment will have little or no effect on your investment.

The cutoff time for placing mutual fund orders is 15:30 JST. Orders placed after 15:30 will be processed on the next business day.

Per guidance from Japan's Financial Services Agency, foreigners (non-Japanese citizens) residing in Japan must have a valid Residence Card to open and operate a brokerage account.

As such, all non-Japanese applicants must provide the details and a copy of their Residence Card (front and back sides) when opening their account.

If the card's Expiry Date is within 3 months (2 months for Special Permanent Resident Certificate), clients will be asked to provide evidence that the renewal process is in progress by submitting a copy of their existing Residence Card, containing a renewal chop from the Immigration Office. Once the new Residence Card is issued, clients must upload a copy via Portal.

After the account is opened, in accordance with the Customer Agreement, non-Japanese clients are required to keep their Residence Card details updated. If the Residence Card on-record expires, trading and cash transfer restrictions will be imposed on the account until such time a copy of a valid Residence Card is provided.

To update your personal details on record, existing clients can login to the Portal, click on Settings > Profile and edit Identification details. If the Japanese Residence Card details are updated, clients will be requested to upload a copy of their new Residence Card via Pending Items.

90 days before the Residence Card on-record is due to expire, foreigners residing in Japan will receive a notification requesting an updated copy of their Residence Card to be uploaded via the Pending Items in Portal.

• To view this task, clients can login to the Portal, click on the bell icon on the top-right and click on 'Document Submission' from the drop-down list. The list of Pending Items on the account would be displayed.
• Locate the 'Proof of Residence Card' Task, click 'View' to open and upload the front & back side of your Residence Card.
• If there are multiple users on your account, check the name of the user whose Residence Card is required.

• Login to the Portal, click on the bell icon on the top-right and click on 'Document Submission' from the drop-down list. The list of Pending Items on the account would be displayed.
• Locate the 'Proof of Residence Card' Task, click 'View' to open and upload the front & back side of your Residence Card.
• If there are multiple users on your account, check the name of the user whose Residence Card is required.

If the card's Expiry Date is within 3 months (2 months for Special Permanent Resident Certificate), clients will be asked to provide evidence that the renewal process is in progress by submitting a copy of the existing Residence Card, containing a renewal chop from the Immigration Office. Once the new Residence Card is issued, clients must upload a copy via Portal.

In accordance with the Customer Agreement, clients are required to keep their Japanese Residence Card details up-to-date. If the Residence Card on-record expires, trading and cash transfer restrictions will be imposed on the account until such time a copy of a valid Residence Card is provided. It may take 1-2 business days to remove restrictions following submission of a valid Residence Card.

Also, see the FAQs above "How can I update my Residence Card details on record?" and "My Japan Residence Card is under renewal. What should I do?".

Clients who are unable to provide a renewed Residence Card or are no longer a resident of Japan should contact our Client Services at their earliest convenience.

Clients must keep account user information up-to-date.

If the user with an expired Japan Residence Card is no longer associated with the account, a primary user can remove that user via Settings > Users & Access Rights or contact our Client Services for assistance.

Foreigners residing in Japan must wait to receive their Residence Card from the Immigration Office before submitting an application.

As Foreign (Non-Japanese Citizen) Ownership of certain stocks is limited by "Civil Aviation Act," "Radio Law," "The Broadcast Act," and "The NTT Law," you may not be entitled to the shareholders benefits, as well as be listed as a shareholder, in case such foreign ownership exceeds the upper limit.

Please click here for details on holding ratio and other related information.

We accept transfers of Japanese stocks from other Japanese brokers. Please apply for registration from Client Portal by going to Transfer & Pay > Transfer of Positions > Deposit > All Other Regions > Free of Payment (FOP) Transfer of Global Securities.

Please enter your 21-digit JASDEC participant account code （Kanyushakoza Code）at the delivering broker in the "Client Account Number at Financial Institution" field. After submitting the application via Client Portal, please be sure to submit the request and instructions to the delivering broker.

Accounts held with Interactive Brokers Securities Japan, Inc. are for Japanese residents and cannot be used overseas. Please apply for a new account at your overseas address after you have moved. After opening an account, you will be able to transfer your positions manually. Please submit a request via Help > Secure Message Center from Client Portal.

Interactive Brokers Securities (IBSJ) accounts do not permit currency conversions, except those made to the account's base currency (JPY). IBSJ accounts are enabled to perform auto-conversion transactions, allowing trades to execute when an account does not hold a sufficient balance of a product's denominated currency.