FSA Weekly Review No.569

The FSA finalized the amendments to the "Regulation for Enforcement of the Act on the Advancement of Government Administration Processes That Use Information and Communications Technology Pertaining to the Finance-Related Laws and Regulations That Fall Under the Jurisdiction of the Cabinet Office" (provisional English title), and others after public consultation.

In line with the government-wide efforts and measures to conform to digital principles for administration procedures, the finalized amendments mainly provide reasonable and necessary amendments to the relevant and applicable Cabinet Office Orders, etc. that fall under the jurisdiction of the FSA in terms of the following: 

- Updating rules/provisions for designating recording media, such as floppy disks, and

- Developing rules/provisions on the use of cloud services, etc.

The finalized amendments were enforced on December 27, 2023.

The FSA has been publishing a series of reference casebooks of good practices on the disclosure of narrative information to encourage corporate initiatives to accumulate and instill good practices toward the enhancement of disclosure of narrative information. 

The FSA has newly published the FY 2023 edition of the reference casebook of good practices on the disclosure of narrative information, a compilation of good practices in the disclosure of corporate sustainability*-related concepts and initiatives disclosed in annual reports, including the following:

- "Overall Requirements"

- "Climate Change-related Issues, etc." 

- "Human Capital and Diversity" 

- "Human Rights," and 

- "Other specifics."

 

The FY 2023 edition of the reference casebook has been compiled by the "Study Group for Collecting Good Practices on Corporate Disclosure of Narrative Information Based on the Principles Regarding the Disclosure of Narrative Information,"** and it shares the latest collection of favorable practices on the disclosure of narrative information mainly in terms of corporate sustainability. (Updates to the casebook are made as deemed necessary).

 

* Corporate disclosure of sustainability information is a key corporate disclosure element that has been gaining focus and interest in society lately. Relevant initiatives to enhance corporate disclosure of sustainability information are encouraged through amendments to the Corporate Governance Code and other measures.

** The Study Group is to bring investors, analysts, experts, and representatives from listed companies together to update the reference casebook.

The FSA published the amendments to the “Order on the Special Provisions for the Duties of Deposit Insurance Corporation of Japan (DICJ) pertaining to the enforcement of the Act on Utilization of Dormant Deposits to promote Public Interest Activities by the Private Sector.” 

While the grants (funded by dormant deposits, etc.) from DICJ to JANPIA (Japan Network for Public Interest Activities) [an organization designated to utilize dormant deposits] are currently provided after the settlement of accounts every year, the amendments additionally allow the provision of grants within a certain limit from April to June.

The amendments were enforced on December 22, 2023.

 

Note: No public consultation was conducted, for the amendments fall under cases prescribed in the "Administrative Procedures Act" as being insignificantly changed and not requiring the implementation of procedures for public consultation, such as administrative orders, etc. pertaining to finances and accounts, and other matters concerning organization, operation and management of the DICJ. 

The Kanto Local Finance Bureau took administrative action against VIXO Kabushiki Kaisha, a notifier of specially permitted business for qualified institutional investors (SPBQII) that manages investments in “VIXO Fund,” in which the notifier serves as an operating partner, based on facts found to be in violation of the "Financial Instruments and Exchange Act" (FIEA), such as where the entity filed investment reports with deficiencies and failed to file further reports in response to the order by the Bureau, thereby ordering the suspension of the notifier's business in terms of sales and solicitation of private placement of funds from December 26, 2023, to January 25, 2024, and the improvement of its business operations, pursuant to the FIEA.

 

The business improvement order includes the following:

(1) To promptly explain to all investors who have acquired fund interests in all funds involved in the notifier's specially permitted business for qualified institutional investors in regard to the facts and reasons for the administrative action taken by the Bureau against the said notifier

(2) To keep track of the status of the fund asset management and custody services, and take all possible measures to protect investors

(3) To promptly formulate and implement a policy regarding the return of fund assets, etc., while giving due consideration to fairness for investors, and

(4) To report in writing on the status of actions and implementation of (1) through (3) above until completion (as soon as improvement measures are formulated and implemented).

 

Note: As the said entity has no English corporate name, the Romanized version of the Japanese corporate name is stated here. Kabushiki Kaisha (Kabushiki Gaisha) stated in the corporate name means "stock company" in Japanese.