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June 4, 2018
Financial Services Agency

Update on Progress toward Further Efficiency and Transparency in the Screening Procedures for Licensing and Registration of Financial Businesses

  (1) Update on Progress toward Further Transparency in the Screening Procedures (the 2016-2017 Strategic Directions and Priorities)
    As part of efforts toward greater transparency in the licensing/registration procedures, the FSA published “Grounds for Refusing Registration, and Relevant Statutes and Regulations Pertaining to Viewpoints in Registration-Screening as a High Speed Trader (Appendix 1(PDF: 50KB)).” In addition, the FSA added two particular cases in  “Particular Cases from the Past Applications for New License and Registration by Foreign Operators (Appendix 2(PDF: 79KB)),” for foreign operators to understand the screening procedures more clearly.
 (Reference) “For those engaging in High Speed Trading”
The FSA provides “Form and Example/Notes of the Application Document and its Attachments” and other information regarding registration of High Speed Trading.
 
(2) Policy Direction toward Further Efficiency and Acceleration in the Screening Procedures (the 2017-2018 Strategic Directions and Priorities)
 In the 2017-2018 Strategic Directions and Priorities published in Nov. 2017, the FSA indicated the following policy direction: “With respect to applications under laws and regulations, the FSA/Local Finance Bureaus promote greater efficiency, acceleration and transparency of licensing/registration procedures by narrowing down issues to be addressed at an early stage and endeavoring to prevent officials from excessively requesting the submission of documents, through reinforcement of communication with financial institutions.”
Until now, the FSA/Local Finance Bureaus have used the list method to execute proper progress management of applications, including ones at the stage of Consultation Prior to Application (*). Also, responsible screening officers share the screening progress of each application with his/her supervisors. Moreover, the FSA/Local Finance Bureaus share recognition with financial institutions concerning issues to be addressed in the early stages along with the procedural outlook.
 (*) As of Dec. 2017, cases in screening procedures totaled around 600.
As part of efforts toward greater efficiency and acceleration in the licensing/registration procedures, the FSA/Local Finance Bureaus, based on this screening framework and number of applications, etc., began the following approaches, such as extensive introduction of screening methods that reflect the screening complexity of each application.
 
・ In the case of applications for which the complexity of screening is not high, we reduce the screening period through the following methods:
     - If the screening complexity of an application is judged not to be high based on the result of the early stage consultation, the attributes of the applicant, etc., we shorten the screening period by limiting the scope of, or not conducting, in-depth screening for the application.
      - We share the goal of completing screening with an applicant, and conduct screening in close communication.
 
・ In the case of applications for which the complexity of screening is high, we conduct screening so that its period does not become unnecessarily prolonged through the following method:
      - If an application is of a type in which the competent Local Finance Office (or competent Local Finance Bureau) does not have enough screening experience, the Local Finance Office (or Local Finance Bureau) does not proceed with screening on its own, and consults with its counterpart, the Local Finance Bureau (or the FSA), at an early stage. The Local Finance Bureau (or the FSA) is proactively involved in its screening process at an early stage.
 
・ For all applications, we promote greater efficiency and acceleration of the screening process through the following methods:
     - Responsible screening officers endeavor to share the screening progress of each application with his/her supervisors and colleagues through weekly meetings or utilization of shared folders.
  - The Local Finance Bureau strengthens efforts to share information on screening progress with the Local Finance Office. For example, the Local Finance Bureau endeavors to have real-time access to the information of the screening progress of each application through its counterpart, the Local Finance Office.
    - We give detailed advice to each applicant by way of showing concrete examples of application documents or points of attention in preparing them.
    - The supervisors of a screening officer are involved at an early stage in the applications dealt with by the screening officer. We present issues to be addressed in the screening process to each applicant, in a concrete and continuous manner.

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