FSA Weekly Review No.544 July 7, 2023

FSA Weekly Review No.544: July 7, 2023

What’s New on the FSA Website

Week of June 23, 2023 - June 29, 2023

This page contains the latest in events, developments, and updates to the FSA website.

Public Comments

June 29, 2023	Publication of the draft amendments to the FSA's regulatory notice concerning the "designated IFRSs" for public consultation <Summary> The FSA proposed the draft amendments to the regulatory notice concerning the "designated IFRSs" stipulated in the "Regulation for Terminology, Forms and Preparation of Consolidated Financial Statements" (hereinafter referred to as "the proposal") for public consultation. The proposal is intended to designate the international accounting standards (IAS) issued by the IASB (International Accounting Standards Board) by June 30, 2023, by adding them to the Designated International Accounting Standards stipulated in Article 93 of the Regulation on Consolidated Financial Statements. The accounting standards in this context mainly refer to the Supplier Finance Arrangements issued by the IASB on May 25, 2023, which amended IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures, thereby requiring companies to disclose additional information* about supplier finance arrangements in the notes of financial statements. * This additional information includes the following: - the contractual terms of supplier finance arrangements - the amount of financial liabilities subject to such arrangements, and - the information on liquidity risk of financial instruments, etc. Public comments will be accepted until 5:00 p.m. [JST], July 31, 2023. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/news/r4/sonota/20230629.html
June 23, 2023	Publication of the finalized amendments to the "Comprehensive Guidelines for Supervision of Major Banks, etc." after public consultation <Summary> The FSA finalized the amendments to the "Comprehensive Guidelines for Supervision of Major Banks, etc." after public consultation conducted in April 2023. The finalized amendments introduced a supervisory framework to ensure financial institutions' operational resilience, based on the "Discussion Paper on Ensuring Operational Resilience" published in December 2022 and finalized in April 2023. The finalized amendments took effect on June 23, 2023. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/news/r4/ginkou/20230623-2.html

June 29, 2023

Publication of the draft amendments to the FSA's regulatory notice concerning the "designated IFRSs" for public consultation
<Summary>
The FSA proposed the draft amendments to the regulatory notice concerning the "designated IFRSs" stipulated in the "Regulation for Terminology, Forms and Preparation of Consolidated Financial Statements" (hereinafter referred to as "the proposal") for public consultation.
The proposal is intended to designate the international accounting standards (IAS) issued by the IASB (International Accounting Standards Board) by June 30, 2023, by adding them to the Designated International Accounting Standards stipulated in Article 93 of the Regulation on Consolidated Financial Statements.
The accounting standards in this context mainly refer to the Supplier Finance Arrangements issued by the IASB on May 25, 2023, which amended IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures, thereby requiring companies to disclose additional information* about supplier finance arrangements in the notes of financial statements.

* This additional information includes the following:

- the contractual terms of supplier finance arrangements

- the amount of financial liabilities subject to such arrangements, and

- the information on liquidity risk of financial instruments, etc.

Public comments will be accepted until 5:00 p.m. [JST], July 31, 2023.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r4/sonota/20230629.html open new window

June 23, 2023

Publication of the finalized amendments to the "Comprehensive Guidelines for Supervision of Major Banks, etc." after public consultation
<Summary>
The FSA finalized the amendments to the "Comprehensive Guidelines for Supervision of Major Banks, etc." after public consultation conducted in April 2023 open new window

.
The finalized amendments introduced a supervisory framework to ensure financial institutions' operational resilience, based on the "Discussion Paper on Ensuring Operational Resilience" open new window

published in December 2022 and finalized in April 2023.
The finalized amendments took effect on June 23, 2023.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r4/ginkou/20230623-2.html open new window

Press Releases

International

June 28, 2023	Results of the G7 Cybersecurity Seminar 2023
June 26, 2023	FSA’s Participation in MAS's "Project Guardian" Initiative on Digital Assets

Publication

June 27, 2023	FSA publishes English translation of monthly magazine, Access FSA No.233
June 27, 2023	FSA publishes English translation of monthly magazine, Access FSA No.232

Councils

June 29, 2023	Updated : The Council of Experts Concerning the Follow-up of Japan’s Stewardship Code and Japan’s Corporate Governance Code

Banks

June 28, 2023	Publication of "Progress Report on the Efficiency of Financial Intermediation" (provisional English title) alongside the results of the corporate questionnaire survey and of the corporate questionnaire survey on evaluation of financial institutions’ initiatives in regard to intermediary services offered to their corporate clients <Summary> The FSA published "Progress Report on the Efficiency of Financial Intermediation" (provisional English title) [available only in Japanese], which outlines key initiatives and approaches taken over the past year (program year 2022) by the FSA and the respective Local Finance Bureaus toward the enhancement of the efficiency of financial intermediation by regional financial institutions. The FSA also published the results of a corporate questionnaire survey* and the results of a corporate questionnaire survey on the evaluation of financial institutions’ initiatives mainly in regard to intermediary services offered to their corporate clients [both available only in Japanese]. * Small- and medium-sized enterprises whose main banks are regional financial institutions, etc. were subject to the questionnaire survey and response. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/news/r4/ginkou/20230628/20230628.html https://www.fsa.go.jp/common/about/research/20230628/20230628.html
June 27, 2023	Report on measures for the resolution of failed financial institutions <Summary> The FSA submitted to the National Diet a report on measures for the resolution of failed financial institutions pursuant to the "Act on Emergency Measures for the Revitalization of the Financial Functions." The report covers developments between October 1, 2022, and March 31, 2023. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/news/r4/ginkou/20230627/230627.html
June 23, 2023	Publication of statistics regarding unlawful reimbursement of deposits (as of the end of March 2023) <Summary> The FSA published statistics regarding unlawful reimbursement of deposits caused by counterfeit and stolen cash cards, stolen deposit books, and unlawful Internet banking activities. The statistics include details of incidents and compensation made by financial institutions based on reports from the financial institutions. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/news/r4/ginkou/20230623.html
June 23, 2023	Discussion Paper on Ensuring Operational Resilience

Securities

June 28, 2023	Administrative penalty charge against TOKYO KOKI CO. LTD. for making false statements in its securities reports and so forth <Summary> On June 27, 2023, the FSA issued an order to impose an administrative penalty charge against TOKYO KOKI CO. LTD. for making false statements in its securities reports and so forth, in violation of the "Financial Instruments and Exchange Act." The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/news/r4/shouken/20230627.html
June 23, 2023	Administrative actions against Chibagin Securities Co., Ltd., The Chiba Bank, Ltd., and The Musashino Bank, Ltd. <Summary> The Kanto Local Finance Bureau took administrative actions against Chibagin Securities Co., Ltd., The Chiba Bank, Ltd., and The Musashino Bank, Ltd., ordering the improvement of their business operations pursuant to the "Financial Instruments and Exchange Act." The administrative actions were taken in response to the recommendation (as of June 9, 2023) from the Securities and Exchange Surveillance Commission (SESC) for administrative actions against the said financial institutions, which were ascertained to have been in violation of the FIEA mainly in terms of the following, based on the results of onsite inspection conducted by the SESC: (1) Long-term and continuous solicitation violating the principle of suitability in the sale of structured bonds, and (2) Insufficient systems in place to ensure compliance with the principle of suitability. Business improvement orders against the said financial institutions include the following: - Establishment of a business operational (business conduct) structure that ensures appropriate solicitation of investments and explanatory accountability to customers in accordance with the principle of suitability, and - Formulation and steady implementation of a business improvement plan that refers to the enhancement of business management systems and internal control systems. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/news/r4/shouken/20230623.html

June 28, 2023

Administrative penalty charge against TOKYO KOKI CO. LTD. for making false statements in its securities reports and so forth
<Summary>
On June 27, 2023, the FSA issued an order to impose an administrative penalty charge against TOKYO KOKI CO. LTD. for making false statements in its securities reports and so forth, in violation of the "Financial Instruments and Exchange Act."

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r4/shouken/20230627.html open new window

June 23, 2023

Administrative actions against Chibagin Securities Co., Ltd., The Chiba Bank, Ltd., and The Musashino Bank, Ltd.
<Summary>
The Kanto Local Finance Bureau took administrative actions against Chibagin Securities Co., Ltd., The Chiba Bank, Ltd., and The Musashino Bank, Ltd., ordering the improvement of their business operations pursuant to the "Financial Instruments and Exchange Act."
The administrative actions were taken in response to the recommendation (as of June 9, 2023) from the Securities and Exchange Surveillance Commission (SESC) for administrative actions against the said financial institutions, which were ascertained to have been in violation of the FIEA mainly in terms of the following, based on the results of onsite inspection conducted by the SESC:

(1) Long-term and continuous solicitation violating the principle of suitability in the sale of structured bonds, and

(2) Insufficient systems in place to ensure compliance with the principle of suitability.

Business improvement orders against the said financial institutions include the following:

- Establishment of a business operational (business conduct) structure that ensures appropriate solicitation of investments and explanatory accountability to customers in accordance with the principle of suitability, and

- Formulation and steady implementation of a business improvement plan that refers to the enhancement of business management systems and internal control systems.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r4/shouken/20230623.html open new window

Others

June 29, 2023	New web portal for regulatory information for intermediaries to handle so-called stablecoins <Summary> Following the introduction of a regulatory framework for so-called stablecoins on June 1, 2023, intermediaries of so-called stablecoins are required to register with the FSA pursuant to the "Payment Services Act" and/or the "Banking Act," where applicable. In this context, the FSA launched a new web portal for information on registration application, etc. for intermediaries to handle so-called stablecoins. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/common/shinsei/dendai/dentori.html
June 29, 2023	Publication of "Statistics of NISA and Junior NISA Accounts" as of March 31, 2023 <Summary> The FSA has published "Statistics of NISA (Nippon Individual Savings Account) and Junior NISA Accounts." As of March 31, 2023, there were approximately 18.7 million NISA accounts in total, and approximately 31.6 trillion yen (approximately 219.2 billion USD) was invested through the NISA accounts, among which, 3.2 trillion yen (approximately 22.5 billion USD) was invested through approximately 7.8 million accounts of the Tsumitate NISA (Dollar-Cost Averaging NISA) which has started since January 2018. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/policy/nisa/20230629-2.html
June 29, 2023	Publication of "Statistics of NISA and Junior NISA Accounts" as of December 31, 2022 (revised figures) <Summary> The FSA has published "Statistics of NISA (Nippon Individual Savings Account) and Junior NISA Accounts" (revised figures). As of December 31, 2022, there were approximately 18.0 million NISA accounts in total, and approximately 30.0 trillion yen (approximately 208.3 billion USD) was invested through the NISA accounts, among which, 2.9 trillion yen (approximately 19.8 billion USD) was invested through approximately 7.3 million accounts of the Tsumitate NISA (Dollar-Cost Averaging NISA) which has started since January 2018. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/policy/nisa/20230629.html
June 29, 2023	Updated list of issuers of gift certificates in repayment procedures based on the ’Payment Services Act’
June 28, 2023	Publication of a research report on the development of an environment to ensure customer-oriented business conduct <Summary> The FSA commissioned Nomura Research Institute, Ltd. to conduct research on the development of an environment to ensure customer-oriented business conduct, thereby publishing the compiled research report [available only in Japanese] on June 28, 2023. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/common/about/research/20230628-4/20230628-4.html
June 23, 2023	Publication of the FSA Analytical Notes <Summary> The FSA has been working to enhance data utilization through the improvement of data analysis capabilities and data management for further progress in financial administration. Some case-examples of the data analyses undertaken by the FSA as part of such efforts are published as "FSA Analytical Notes" (FY 2022) [available only in Japanese]. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/common/about/kaikaku/fsaanalyticalnotes/index.html
June 23, 2023	Publication of the agenda and handouts of the 64th Meeting of the Financial Service ADR (Alternative Dispute Resolution) Liaison Group <Summary> The FSA published the agenda and handouts of the 64th Meeting of the Financial Service ADR (Alternative Dispute Resolution) Liaison Group, which was held on June 23, 2023. The liason group members discussed the operational status of the respective designated alternative dispute resolution (ADR) organizations in the latter half of FY2022, as well as the measures taken by financial institutions in response to feedback and so forth from ADR organizations. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/singi/singi_trouble/siryou/20230623.html
June 23, 2023	Results of a third-party assessment of the FSA’s supervisory approaches including monitoring practices <Summary> The FSA sets out in its "JFSA's supervisory approaches" to introduce a third-party assessment of the FSA’s supervisory approaches by experts who are well-versed in business improvement and governance practices for quality improvement in the FSA’s financial administration, such as in respect of working-level supervisory approaches inclusive of monitoring practices. In this regard, the FSA commissioned Protiviti Inc., a third-party consulting service provider, to conduct the assessment of the FSA’s monitoring practices through a series of consultations with financial institutions, and thereafter published on its website the assessment report on the FSA’s monitoring implementation status from the viewpoints of financial institutions, which was compiled by the said consulting service provider. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/common/about/research/monitoring2022 /monitoring2022.html

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