FSA Weekly Review No.520

- Review of the application of registration pertaining to investment advisory business, or of the employee who is to submit the notification.

- Matters to be described in the document for delivery prior to the conclusion of an investment advisory contract and discretionary investment management contract, etc.

- Flexibility of media for documents describing the content of advice based on an investment advisory contract

- Review of exemptions from the prohibition of lending, etc. in regard to investment advisory services, and

- Other required amendments. 

- Clarification of interpretation regarding the applicability of various tokens including items and contents issued on the blockchain as crypto-assets
- Supervisory/regulatory response to crypto-asset exchange service providers in light of the diversification of their business models, and

- Supervisory/regulatory response to crypto-asset exchange service providers in cases where a major shareholder of a crypto-asset exchange service provider sells or transfers the crypto asset exchange business by transferring shares to another business entity, and so forth.

*The majority of the data reflects the data until November 30, 2022, whereas the data of cooperative financial institutions reflects the data until September 30, 2022.

- The entity is not deemed to have concrete prospects for securing working capital, including system outsourcing costs, on an ongoing basis, or for ensuring the safe and stable operation of its trading systems, and so forth

- The establishment of a business execution system at the new office location is scheduled to begin in January 2023, and the system to ensure appropriate and reliable execution of the crypto asset exchange business has been found to be insufficient.

* The suspension of business operations will be lifted if a fundamental review of the entity's business management structure to ensure the crypto-asset exchange business is appropriately and reliably carried out and the status of the review is confirmed by a statutory report to be filed by the entity based on the business improvement order.

*The applicability of "any other quotas similar thereto" must be determined on a case-by-case basis from the perspective of the strictness of the examination and approval procedures, clarity of attribution, and other factors. In recent years, carbon credits certified by the private sector have become mainstream, and the FSA believes that it is important for financial institutions to be able to clearly determine whether or not their business transactions fall under the category of "any other quotas similar thereto" in order to promote carbon neutrality at financial institutions.

- Attentive customer service regarding ongoing customer management

- Comprehensive economic measures to overcome high prices and revitalize the economy

- Cabinet's "Sub-committee for Doubling Asset-based Incomes"

- Response to the introduction of the invoice system (qualified invoice-based method for a business operator to receive tax credit for consumption tax corresponding to multiple tax rates on purchases).

* To enhance the transparency of its administration and to share its awareness of issues in the financial sector in a timely manner, the FSA publishes every month the main issues raised by the FSA at opinion exchange meetings with the relevant associations** in the financial sector. Opinion exchange meetings are held with the respective associations on a regular basis.

** In November 2022, opinion exchange meetings were held respectively with seven groups: major banks, etc.; the Regional Banks Association of Japan and the Second Association of Regional Banks; National Central Society of Credit Cooperatives; the Life Insurance Association of Japan; the Japan Securities Dealers Association (JSDA); Labor banks sector; and Japan Virtual and Crypto assets Exchange Association.