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October 27, 2021
Financial Services Agency

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

Since the 2016 fiscal year, the Financial Services Agency (FSA) has indicated its policy direction to “execute proper progress management for registration/licensing procedures through listing for greater efficiency and transparency of financial regulation,” and has announced its action plan and specific initiatives.*
* https://www.fsa.go.jp/en/news/2020/20201027.html
   https://www.fsa.go.jp/en/news/2017/20170210-1.html(FSA website)
(1) Major initiatives since the last announcement on October 27, 2020, are as follows:
○ From the viewpoint of revising report frequency and abolishing reports:
・Abolished the annual report on "Utilization Status of New Financing Methods," (*) one of the financial results materials required to be reported by regional banks.
 * Requests for reports on the balance of loans secured by movables and accounts receivable and loans utilizing financial restriction clauses.
・Decided to integrate and abolish some forms of financial statements and reports regularly submitted by financial institutions to the FSA and the Bank of Japan at "The Task Force on Strengthening Coordination between FSA Inspections and Bank of Japan Examinations," and promoted efforts to centralize the submission destinations.(https://www.fsa.go.jp/news/r2/20210322/20210322.html)
○ From the viewpoint of optimizing, expediting, and clarifying the approval examination process:
・The FSA and the Local Finance Bureaus and Local Finance Offices held joint hearings on the approval for local financial institutions, from the time of receiving prior consultation from regional financial institutions.
(2) Since November 2018, the FSA took a survey of financial institutions that have been registered regarding the examination response of the relevant authorities.
○ The questionnaire was sent to over 100 financial institutions, and 95 replies were received from June last year to May this year. The questionnaire response rate was approximately 87%.
○ The questionnaire contained the following five questions. Responses were numbered from 1 to 4, with 1 being the highest rating.
1. Did you receive an easy-to-understand explanation of the application procedure (including the writing style of the written application)?
2. Did you find that consideration was taken to avoid making the task of filling out and presenting the written applications overly burdensome (example: applicant scale, location in Japan taken into consideration)?
3. Did you receive an easy-to-understand explanation of the main points of the examination (example: systems prioritized for establishment)?
4. Was the viewpoint of the examination reasonable (example: you felt that the unified opinion of the organization was being indicated, as opposed to the opinion of the individual person in charge)?
5. Did the person in charge of the examination make an effort to quickly answer the applicant’s inquiries, where there were no special circumstances?

○ The average score of responses was 1.5, with the breakdown as follows (the average score of responses last year was also 1.5):
  Respondents who answered 1 Respondents who answered 2 Respondents who answered 3 Respondents who answered 4 Average score
Q.1 54 35 5 0 1.5
Q.2 44 43 5 2 1.6
Q.3 54 35 6 0 1.5
Q.4 61 30 2 2 1.4
Q.5 62 30 3 0 1.4
Total 275 173 21 4 1.5

○ In the free answer section, regarding the examination response of the relevant authorities, there were comments such as, "The review was able to be carried out smoothly even in the COVID-19 pandemic," while there were others such as, "The burden of submitting materials is heavy."
※ Since some respondents did not answer all the questions, the number of respondents per question may not be the same.
We intend to use the answers and opinions we have received in our future financial administration to make the examination process more efficient.


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