Financial Services AgencyFSA Weekly Review No.387

April 10, 2020

What’s New on the FSA Website

Week of March 30, 2020 - April 3, 2020

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

Public Comments

(The following public comments are available in Japanese)

April 3, 2020 Publication of the finalized "Order to Amend the Ordinance for Enforcement of the Act on Collective Liquidation of Specified Financial Transactions Conducted by Financial Institutions, etc."open new window
<Summary>
The FSA finalized the "Order to Amend the Ordinance for Enforcement of the Act on Collective Liquidation of Specified Financial Transactions Conducted by Financial Institutions, etc." The amendments mainly pertain to the enforcement of the "Act on the Partial Revision of the Payment Services Act to Respond to the Diversification of Financial Transactions Associated with the Development in Information Communication Technology" (provisional English law title). The amendments will be enforced on May 1, 2020.
April 3, 2020 Publication of the finalized amendments to the cabinet orders and cabinet office orders pertaining to the 2019 revision of the "Payment Services Act," etc.open new window
<Summary>
The FSA finalized the amendments to the cabinet orders and cabinet office orders pertaining to the 2019 revision of the "Payment Services Act." In accordance with the enforcement of the "Act for the Partial Revision of the Payment Services Act, etc., to Address the Diversification of Financial Transactions based on Advances in Information Technology" (Act No. 28 of 2019) (provisional English law title), which was enacted on May 31, 2019, the amendments mainly update the relevant applicable cabinet orders and cabinet office orders to reflect amendments of the Act in regard to the development of the system for, and regulation of, the crypto-asset (virtual currency) exchange business. The amended Act,* cabinet orders and cabinet office orders will be enforced on May 1, 2020.
* The amended Act in this context means the "Act for the Partial Revision of the Payment Services Act, etc., to Address the Diversification of Financial Transactions based on Advances in Information Technology" (Act No. 28 of 2019) (provisional English law title).
April 1, 2020 Publication of the finalized amendments to the regulatory notice designating cases for the provision of specific personal information where financial business operators (financial institutions) are required when the FSA deems necessary, and designating specific personal information that is to be provided to corporate bond issuers pursuant to the provisions of Article 62 of the "Order on Book-Entry of Company Bonds, Shares, etc."open new window
<Summary>
The FSA has finalized the amendments to the regulatory notice designating cases for the provision of specific personal information where financial business operators (financial institutions) are required when the FSA deems necessary, and designating specific personal information that is to be provided to corporate bond issuers pursuant to the provisions of Article 62 of the "Order on Book-Entry of Company Bonds, Shares, etc." The amendments allow book entry transfer agencies to provide specific personal information to their contractors (including corporate bond issuers) only when such information is obtained from the Japan Agency for Local Authority Information Systems. The amended regulatory notice has been enforced on April 1, 2020.
April 1, 2020 Publication of the finalized amendments to the "Cabinet Office Order on Financial Instruments Business"open new window
<Summary>
The FSA has finalized the amendments to the "Cabinet Office Order on Financial Instruments Business."
Financial instruments business operators are currently required to deliver annually a paper (booklet), "Document for Delivery Prior to Conclusion of Contract" prior to the conclusion of contracts with their customers, which contains information on risks, fees and such pertaining to the financial instruments and services they provide. The amendments expressly set forth that the delivery of the said Document to customers may also be carried out online (from the second delivery onwards), with a view to providing material information therein to customers in a more rational and comprehensive manner without compromising the statutory objective of delivering the Document. The amended Cabinet office Order has been enforced on April 1, 2020.
March 31, 2020 Publication of the finalized "Core Issues for Contributing to the Enhancement of Regional Financial Institutions' Business Management and Governance – The Shift from the 'Formalities-Oriented' Approach to 'Substance-Oriented (Future-Oriented)' Approach" (provisional English title)open new window
<Summary>
The FSA finalized the "Core Issues for Contributing to the Enhancement of Regional Financial Institutions' Business Management and Governance – The Shift from the 'Formalities-Oriented' Approach to 'Substance-Oriented (Future-Oriented)' Approach" (provisional English title). The finalized paper is for the presidents and the boards of directors of regional banks to assess and review the state of their business management and governance by outlining the core issues for contributing to the enhancement of the effectiveness of their business management and governance.
The "Comprehensive Guidelines for Supervision of Regional Financial Institutions" are also updated in response to requests from regional financial institutions to share examples of quantitative indicators which are deemed useful in developing and implementing their business strategies.
March 31, 2020 Publication of the finalized amendments to the regulatory notices pertaining to Pillar 1 requirements of capital adequacy
<Summary>
The FSA finalized the amendments to the regulatory notices pertaining to Pillar 1 requirements of capital adequacy. The amendments mainly revise the capital adequacy regulation on double gearing (restriction on banks' investments in other banks), which exempts banks' investments contributing to the effective and ongoing financial intermediary function of regional banks. The amended regulatory notices have been in force since March 31, 2020.
March 30, 2020 Publication of the finalized "Cabinet Office Order to Amend the Ordinance for the Enforcement of the Banking Act, etc."open new window
<Summary>
The FSA has finalized the "Cabinet Office Order to Amend the Ordinance for the Enforcement of the Banking Act, etc." The said Cabinet Office Order mainly provides technical amendments in response to the finalization of transitional arrangements for implementing Basel III capital requirements, which were originally introduced at the adoption of Basel III capital requirements, and in response to the revisions of the Audit Standards (as of July 5, 2018, and of September 3, 2019). The said Cabinet Office Order and other relevant applicable Orders have been enforced on March 31, 2020.
March 30, 2020 Publication of the finalized amendments to the "Cabinet Office Order on Financial Instruments Business"open new window
<Summary>
The FSA has finalized the amendments to the "Cabinet Office Order on Financial Instruments Business." The amendments mainly update the appended form of the said Cabinet Office Order in accordance with the amendments to the regulatory notices pertaining to Pillar 1 requirements of capital adequacy (promulgated on March 15, 2019). The amended Cabinet Office Order has been enforced on March 31, 2020.

Press Releases

(The following press releases are available in English)

International 

April 3, 2020 BG2C put off further to be rescheduled after Covid-19 subsides

 

Publication

March 31, 2020 PDFFSA publishes English translation of monthly magazine, Access FSA No.199

 

Others

April 3, 2020 Preparation for permanent cessation of LIBOR
April 2, 2020 Updated list of issuers of gift certificates in repayment procedures based on the "Payment Services Act"
April 1, 2020 Appointment of the Director of the Financial Research Center
March 30, 2020 Updated statistics of money lending business

 


(The following press releases are available in Japanese)

Securities

April 3, 2020 Administrative action against Eastspring Investments, Limitedopen new window
<Summary>
The FSA took an administrative action against Eastspring Investments, Limited, ordering the suspension of its investment management business in terms of concluding a new contract from April 3 to June 2, 2020 and the improvement of its business operations pursuant to the "Financial Instruments and Exchange Act." This administrative action is based on a recommendation from the Securities and Exchange Surveillance Commission (SESC) as a result of its on-site inspection.
March 31, 2020 Updated list of entities that are operating financial instruments businesses without proper registration (The Kanto Local Finance Bureau)open new window
<Summary>
The FSA and the Kanto Local Finance Bureau issued warnings to entities that are operating financial instruments businesses without proper registration. (See updated lists of PDFJapan-based entitiesopen new window* and PDFforeign-based entitiesopen new window).

* This list also includes the warned non-registered entities with untraceable/unidentified addresses.
March 31, 2020 Administrative penalty charge against an individual for committing insider trading regarding stocks of Kozosushi Co.,LTD. by using received insider informationopen new window
<Summary>
On March 30, 2020, the FSA issued an order to impose an administrative penalty charge against an individual for committing insider trading regarding stocks of Kozosushi Co.,LTD. by using information received as an employee of the entity.
March 31, 2020 Administrative penalty charge against an individual for committing insider trading regarding stocks of Japan Drilling Co., Ltd. by using received insider informationopen new window
<Summary>
On March 30, 2020, the FSA issued an order to impose an administrative penalty charge against an individual for committing insider trading regarding stocks of Japan Drilling Co., Ltd*. by using information received as an employee of the entity.

* Japan Drilling Co., Ltd. was delisted in July 2018.
March 31, 2020 Administrative penalty charge against J-LEASE CO.,LTD. for making false statements in its securities reportsopen new window
<Summary>
On March 30, 2020, the FSA issued an order to impose an administrative penalty charge against J-LEASE CO.,LTD. for making false statements in its securities reports.

 

Insurance

April 1, 2020 Publication of the FSA's response to an inquiry made through "No Action Letter System," a system to seek a prior confirmation from the FSA on the application of laws and regulationsopen new window
<Summary>
The FSA published its response as of April 1, 2020, to an inquiry dated March 10, 2020, from an inquirer about the regulatory applicability of the "Insurance Business Act" in regard to a certain service the inquirer expects to introduce to its customers. The inquiry was submitted to the FSA through the FSA's No Action Letter System, a system to seek a prior confirmation from the FSA on the application of laws and regulations. (Please refer to PDFthe response detailsopen new window [available only in Japanese]).

 

Others

April 3, 2020 Notifications to the FSA to be filed by virtual currency (crypto-asset) exchange service providers seeking registration pursuant to the "Act for the Partial Revision of the Payment Services Act, etc., to Address the Diversification of Financial Transactions Based on Advances in Information Technology" (Act No. 28 of 2019) (provisional English law title)open new window
<Summary>
The FSA has published the registration-related notification forms to be filed by virtual currency (crypto-asset) exchange providers to the FSA pursuant to the "Act for the Partial Revision of the Payment Services Act, etc., to Address the Diversification of Financial Transactions based on Advances in Information Technology" (Act No. 28 of 2019, hereinafter referred to as "the Act") (provisional English law title) scheduled to be enforced on May 1, 2020. With the enforcement of the Act, business operators whose responsibilities are limited solely to the management (safekeeping) of virtual currency assets (crypto-assets) are now required to be registered as virtual currency (crypto-asset) exchange service providers, whereas derivative business operators dealing with virtual currency assets (crypto-assets) are now required to be registered as financial business operators. Service providers / business operators intending to carry on their businesses after the enforcement of the Act are required to file the designated notifications to the FSA within two weeks from the date of enforcement of the Act.
April 3, 2020 Updated questionnaire to be filled out by applicants for registration as virtual currency (crypto-asset) exchange service providersopen new window
<Summary>
The FSA has updated the questionnaire to be filled out by applicants subject to the screening process of applications for registration as virtual currency (crypto-asset) exchange service providers. The updated questionnaire primarily reflects updates from the "Act for the Partial Revision of the Payment Services Act, etc., to Address the Diversification of Financial Transactions Based on Advances in Information Technology" (Act No. 28 of 2019) (provisional English law title), which is scheduled to be enforced on May1, 2020. The updated questionnaire also reflects the findings from on- and off-site monitoring and registration screening practices, and is expected to further enhance the efficiency in the registration screening process, particularly in terms of screening applicants' risk management systems.
April 3, 2020 Establishment of the "Liaison Council on Corporate Year-End Closing of Accounts and Auditing in Response to the Increasing Impact of Coronavirus Disease 2019 (COVID-19)" (provisional English title)open new window
<Summary>
The FSA has established the "Liaison Council on Corporate Year-End Closing of Accounts and Auditing in Response to the Increasing Impact of Coronavirus Disease 2019 (COVID-19)" (provisional English title). Considering that many listed companies and such may have significant decreases in sales and may not be able to forecast future performances due to the increasing impact of COVID-19, the Liaison Council aims to share with stakeholders the views and the best approaches in addressing issues pertaining to corporate year-end closing operations and auditing.
March 31, 2020 Publication of the updated "Manual on the Consultation on Multiple-Debt Problems Associated with Gambling Addiction" (provisional English title)open new window
<Summary>
The Consumer Affairs Agency (CAA) and the FSA jointly updated the "Manual on the Consultation on Multiple-Debt Problems Associated with Gambling Addiction" (provisional English title), which was originally published in March 2018. The manual primarily shows how relevant competent authorities should respond to inquiries from persons having or assumed to have gambling problems, or from persons affected by their family members/relatives/friends with a gambling addiction. The updates further enrich the manual in line with the basic plan to promote measures against gambling addiction, etc., stipulated in the "Basic Act on Measures Against Gambling Addiction, etc." (provisional English law title), which was enforced in April 2019.
March 31, 2020 Development of the FSA's facilitation scheme for online administrative procedureopen new window
<Summary>
The FSA published the development of its facilitation scheme for online administrative procedure as of March 31, 2017, March 31, 2018, and March 31, 2019 pursuant to the "Act on Utilization of Information and Communication Technology in Administrative Procedure."
March 31, 2020 Publication of the updated FAQ in regard to the capital adequacy requirements for the treatment of securitization exposuresopen new window
<Summary>
The FSA published the updated FAQ in regard to the capital adequacy requirements for the treatment of securitization exposures which were amended in March 2019. The updates mainly pertain to the amendments to the treatment of the respective securitization instruments to reflect capital treatment criteria for STC (simple, transparent and comparable) securitizations integrated into Basel III capital adequacy requirements.
March 30, 2020 Publication of the updated "Cabinet Office Order on Definitions Under Article 2 of the Financial Instruments and Exchange Act"open new window
<Summary>
The FSA published the updated "Cabinet Office Order on Definitions Under Article 2 of the Financial Instruments and Exchange Act (FIEA)." The updates mainly pertain to technical amendments in accordance with the enforcement of the amendments to the "Act to Partially Revise the School Education Act, etc." The updated Cabinet Office Order has been enforced on April 1, 2020.
March 30, 2020 Considerations in regard to business continuity planning (BCP)-related responses in line with the "Basic Policies for Novel Coronavirus Disease Control" (provisional English title)open new window
<Summary>
The FSA issued a request to financial institutions (including financial associations) to remain committed to the "Basic Policies for Novel Coronavirus Disease Control" (provisional English title) published by the Novel Coronavirus Response Headquarters on February 25, 2020. Although the outlook remains uncertain, financial institutions are required to take flexible measures to secure continuity of operations that are necessary depending on regional circumstances, as well as their businesses, scale, and characteristics to ensure the functioning of financial system and protect consumers. In this context, the FSA additionally requests financial institutions to further develop operational structures to prepare for an emergency, by taking into account the business continuity planning (BCP)-related considerations listed by the FSA as well as the "Basic Policies for Novel Coronavirus Disease Control by the Government of Japan" (provisional English title) published by the Headquarters on March 28, 2020.
March 30, 2020 Implementation schedule for capital adequacy requirements and other relevant applicable requirements in Japanopen new window
<Summary>
The FSA announced its implementation schedule for capital adequacy requirements and other relevant applicable requirements in Japan as follows:
  1. Implementation of finalized Basel III standards in Japan is scheduled to begin in March 2023, in line with the revised schedule agreed internationally; and
  2. Net Stable Funding Ratio will not be implemented in Japan for the next one year from April 2020 onward, taking into account the implementation status in other countries.
March 30, 2020 Publication of the minutes of the Expert Panel on Policy Assessmentopen new window
<Summary>
The FSA published the minutes of the Expert Panel on Policy Assessment held on February 28, 2020.

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