As financial products have grown in complexity and level of risk compounding in recent years, investors have come to find it difficult to assess investment risk. Furthermore, companies managing mutual funds are increasingly expected to perform risk control and thus prevent assumption of unforeseen risk by investors. A related revision to the investment fund legal system in Japan led to establishing what is known as “the rule for investment diversification” in December 2014, without a clear discussion of its expected effects on market price formation having taken place. In this paper, we therefore used an artificial market to investigate its effects on price formation in financial markets where investors follow the rule at the time of a market crash that is caused by the collapse of an asset fundamental price. As results, we found the possibility that when the fundamental price of one asset collapses and its market price also collapses, some asset market prices also fall, whereas other asset market prices rise for a market in which investors follow the rule for investment diversification.