FSA Weekly Review No.522 January 26, 2023

FSA Weekly Review No.522: January 26, 2023

What’s New on the FSA Website

Week of January 13, 2023 - January 19, 2023

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

Press Conferences

January 19, 2020	Press Conference by the Minister of State for Financial Services (November 18, 2022)

Public Comments

January 19, 2023	Publication of the draft "Cabinet Office Order to Amend the Cabinet Office Order on the Surcharge and Delinquent Charge under the Provisions of Chapter VI-2 (Surcharge) of the Financial Instruments and Exchange Act" alongside the draft "Cabinet Office Order to Amend the Cabinet Office Order on Financial Instruments Firms Association, etc." for public consultation <Summary> The FSA proposed the following draft Cabinet Office Orders for public consultation: (1)The draft "Cabinet Office Order to Amend the Cabinet Office Order on the Surcharge and Delinquent Charge under the Provisions of Chapter VI-2 (Surcharge) of the Financial Instruments and Exchange Act" (hereinafter referred to as the draft "Cabinet Office Order [1]"), and (2)The draft "Cabinet Office Order to Amend the Cabinet Office Order on Financial Instruments Firms Association, etc." (hereinafter referred to as the draft "Cabinet Office Order [2]"). The draft Cabinet Office Order [1] is mainly aimed at providing amendments in response to the government-wide policy to abolish the use of fax machines for administrative operations and procedures, whereas the draft Cabinet Office Order [2] is mainly aimed at providing amendments in response to the enforcement of the "Act Partially Amending the Income Tax Act, etc." (Act No. 4, 2022). Public comments will be accepted until 12:00 p.m. (noon) [JST], February 20, 2023. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/shouken/20230119/20230119.html
January 18, 2023	Publication of the finalized amendments to the regulatory notice pertaining to Pillar 1 and Pillar 3 requirements of capital adequacy applicable to the Norin Chukin Bank and the Shoko Chukin Bank Limited, alongside the amendments to other relevant and applicable regulatory notices and guidelines after public consultation <Summary> As of January 18, 2023, the FSA finalized the amendments to the regulatory notice pertaining to Pillar 1 and Pillar 3 requirements of capital adequacy applicable to the Norin Chukin Bank and the Shoko Chukin Bank Limited, alongside the amendments to other remaining relevant and applicable regulatory notices and guidelines after public consultation. The amendments correspond to the promulgated amendments applicable to banks and bank holding companies, which were published in April and November 2022. The amendments pertain to the implementation of the finalized Basel III framework,* and a series of public consultations were held in March, September, and October 2021, as well as in September 2022. The amendments will take effect on March 31, 2023. As announced on April 28, 2022 in the publication of the finalized amendments to the regulatory notice pertaining to Pillar 1 and Pillar 3 requirements of capital adequacy, the implementation dates of the regulatory notices in conjunction with the finalization of the Basel III framework are scheduled as follows: - Internationally active financial institutions and non-internationally active financial institutions that use internal model-based approaches for measuring risks: March 31, 2024 - Non-internationally active financial institutions that do not use internal model-based approaches for measuring risks: March 31, 2025 - Financial institutions that desire an early implementation on or after March 31, 2023, may do so by submitting a notification to the FSA. *The finalized Basel III framework refers to a consolidated package of the "Basel III framework" (December 2017) and the "market risk capital framework (minimum capital requirements for market risk)" (January 2019). The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/ginkou/20230118.html
January 17, 2023	Publication of draft amendments to the regulatory notice determining the amounts to be accumulated as reserves for outstanding claims pursuant to Article 73, Paragraph 1, Item 2, of the "Regulation for Enforcement of the Insurance Business Act" for public consultation <Summary> The FSA published the draft amendments to the regulatory notice determining amounts to be accumulated as reserves for outstanding claims pursuant to Article 73, Paragraph 1, Item 2, of the "Regulation for Enforcement of the Insurance Business Act" for public consultation. The proposal is aimed at providing amendments to the aforementioned regulatory notice, etc. to allow life insurance companies, foreign life insurance companies, and other applicable entities to take into account the impact from a possible pandemic or major natural disaster on their IBNR (Incurred But Not Reported Loss) reserves.* Public comments will be accepted until 5:00 p.m. (JST), February 17, 2023. * IBNR reserves in this context mean reserves for outstanding claims accumulated by life insurance companies, foreign life insurance companies, and other applicable entities for future losses arising from insured events that have not yet been reported. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/hoken/20230117/20230117.html

Press Releases

International

January 16, 2023	Updated : International Financial Center Website

Councils

January 18, 2023	Publication of the agenda and handouts of the third meeting of the "Working Group on Financial Institutions' Efforts towards the Decarbonization of the Economy" <Summary> The FSA published the agenda and handouts of the third meeting of the "Working Group on Financial Institutions' Efforts towards the Decarbonization of the Economy," which was held on January 19, 2022. Briefings on local initiatives for decarbonization, and on mainly Scope 3 were respectively given by some of the Working Group members and observers and by the secretariat (the FSA) of the Working Group, whereby the Working Group members discussed the respective topics thereof. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/singi/decarbonization/siryou/20230119.html
January 13, 2023	Publication of the agenda and handouts of the 145th meeting of the Council on Automobile Liability Insurance <Summary> The FSA published the agenda and handouts of the 145th meeting of the Council on Automobile Liability Insurance, which was held on January 13, 2023. The results of the conformity examination of insurance premium rates for FY2022 and the use of investment profits for FY2023 were reported at the meeting, followed by a discussion as to whether or not insurance standard rates should be revised. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/singi/singi_zidousya/siryou/20230113.html

January 18, 2023

Publication of the agenda and handouts of the third meeting of the "Working Group on Financial Institutions' Efforts towards the Decarbonization of the Economy"
<Summary>
The FSA published the agenda and handouts of the third meeting of the "Working Group on Financial Institutions' Efforts towards the Decarbonization of the Economy," which was held on January 19, 2022.
Briefings on local initiatives for decarbonization, and on mainly Scope 3 were respectively given by some of the Working Group members and observers and by the secretariat (the FSA) of the Working Group, whereby the Working Group members discussed the respective topics thereof.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/singi/decarbonization/siryou/20230119.html open new window

January 13, 2023

Publication of the agenda and handouts of the 145th meeting of the Council on Automobile Liability Insurance
<Summary>
The FSA published the agenda and handouts of the 145th meeting of the Council on Automobile Liability Insurance, which was held on January 13, 2023. The results of the conformity examination of insurance premium rates for FY2022 and the use of investment profits for FY2023 were reported at the meeting, followed by a discussion as to whether or not insurance standard rates should be revised.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/singi/singi_zidousya/siryou/20230113.html open new window

Banks

January 19, 2023	Statement issued by Japanese Bankers Association requesting its member financial institutions to enhance corporate initiatives/measures, particularly in terms of financing to support start-ups <Summary> In response to a joint statement (available only in Japanese) as of December 23, 2022, issued by the FSA alongside METI (Ministry of Economy, Trade and Industry) and the Ministry of Finance requesting financial institutions to enhance their initiatives/measures toward the establishment of financing practices which do not rely on business owners’ personal guarantees, on January 19, 2023, Japanese Bankers Association issued a statement (available only in Japanese) requesting its member financial institutions to enhance their initiatives/measures, particularly in terms of financing to support start-ups. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/ginkou/20230119.html

January 19, 2023

Statement issued by Japanese Bankers Association requesting its member financial institutions to enhance corporate initiatives/measures, particularly in terms of financing to support start-ups
<Summary>
In response to a joint statement open new window

(available only in Japanese) as of December 23, 2022, issued by the FSA alongside METI (Ministry of Economy, Trade and Industry) and the Ministry of Finance requesting financial institutions to enhance their initiatives/measures toward the establishment of financing practices which do not rely on business owners’ personal guarantees, on January 19, 2023, Japanese Bankers Association issued a statement open new window

(available only in Japanese) requesting its member financial institutions to enhance their initiatives/measures, particularly in terms of financing to support start-ups.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/ginkou/20230119.html open new window

Securities

January 17, 2023	Administrative action against IPR Venture Capital Inc., Yosu Godo Kaisha, and Albatross K.K., notifiers of specially permitted business for qualified institutional investors (SPBQII) <Summary> The Kanto Local Finance Bureau took administrative actions against IPR Venture Capital Inc., Yosu Godo Kaisha, and Albatross K.K., notifiers of specially permitted business for qualified institutional investors (SPBQII), based on facts found to be in violation of the "Financial Instruments and Exchange Act" (FIEA), such as where they failed to file the mandatory business reports with the Bureau, thereby ordering the improvement of their business operations pursuant to the FIEA. Note: As two of the said entities have no English corporate names, the Romanized versions of the Japanese corporate names are stated here. K.K. stated in Albatross K.K. stands for Kabushiki Kaisha, meaning "stock company," whereas Godo Kaisha (Godo Gaisha) stated in Yosu Godo Kaisha means "limited liability company," in Japanese. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/shouken/20230117.html

January 17, 2023

Administrative action against IPR Venture Capital Inc., Yosu Godo Kaisha, and Albatross K.K., notifiers of specially permitted business for qualified institutional investors (SPBQII)
<Summary>
The Kanto Local Finance Bureau took administrative actions against IPR Venture Capital Inc., Yosu Godo Kaisha, and Albatross K.K., notifiers of specially permitted business for qualified institutional investors (SPBQII), based on facts found to be in violation of the "Financial Instruments and Exchange Act" (FIEA), such as where they failed to file the mandatory business reports with the Bureau, thereby ordering the improvement of their business operations pursuant to the FIEA.

Note: As two of the said entities have no English corporate names, the Romanized versions of the Japanese corporate names are stated here. K.K. stated in Albatross K.K. stands for Kabushiki Kaisha, meaning "stock company," whereas Godo Kaisha (Godo Gaisha) stated in Yosu Godo Kaisha means "limited liability company," in Japanese.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/shouken/20230117.html open new window

Others

January 19, 2023	Publication of the main issues raised by the FSA at opinion exchange meetings with relevant associations in the financial sector <Summary> The FSA has published the main issues raised by the FSA at opinion exchange meetings* held with relevant associations in the financial sector in December 2022. (Available only in Japanese). Common topics across the groups were: - Implementation of the price-cap system for Russian crude oil, etc. - Response to the shift from LIBOR - Public relations and promotion* toward potential human resources at major corporations, aimed at enhancing the human resource intermediary functions of regional financial institutions(The FSA has been promoting a project for matching human resources for regional corporate management to create a new inflow of professionals from major corporations to small- and medium-sized enterprises through the human resource intermediary functions of regional financial institutions, thereby encouraging professionals with expertise at major corporations to play an active role in the respective regions.) - Public relations regarding AML (Anti-Money Laundering) measures, etc. - Briefing sessions on CFT (Countering the Financing of Terrorism) measures, etc. - Doubling Asset-based Incomes Plan, and - The participation in "Sanriku- and Joban-Products Network" (provisional [English] title) Notable issues discussed by most but not all groups were: - FY2022 general account supplemental budget for AML (Anti-Money Laundering) measures, etc. and the joint implementation of the AML system across the financial sector, and - The importance of product governance in distributors based on the dialogue regarding "structured bonds" 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 December 2022, opinion exchange meetings were held respectively with three groups: major banks, etc.; the Regional Banks Association of Japan and the Second Association of Regional Banks; and the General Insurance Association of Japan. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/common/ronten/index.html
January 16, 2023	The FSA's initiatives for the reduction of food loss as well as food donation through the effective use of a portion of the government's emergency food reserves <Summary> From the perspective of reducing food loss and supporting people in need, the FSA has been engaging in food donation to food bank (hunger-relief) organizations and other outreach groups since August 2021, by making effective use of a portion of food reserves (mainly non-perishable foods, such as canned goods) that are originally kept for disaster-relief/emergency by the government. The FSA has called for applications for its eighth offering of a portion of its emergency food reserves subsequent to the previous offering made in November 2022. (The offering is for residents in Japan). The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/choutatu/choutatu_j/choutatsu_saigaisyokuhin.html
January 16, 2023	Call for applicants for the "Project for Upgrading Anti-Money Laundering and Other Related Measures" (provisional English title) <Summary> The FSA called for applicants for "Project for Upgrading Anti-Money Laundering and Other Related Measures" (provisional English title). This project is aimed at encouraging the development and implementation of the effectiveness of measures against money laundering, terrorist financing, and proliferation financing in the entire Japanese financial sector in an appropriate and timely manner by subsidizing a portion of the expenses for the development and implementation of a system utilizing AI (Artificial Intelligence) and other technologies that can be jointly used by multiple financial institutions. The eligible applicants shall be business operators that meet the conditions set forth in the subsidy grant outline and implementation guidelines (the outline and guidelines are available only in Japanese). The applications will be accepted until 5:00 p.m. (JST), February 24, 2023. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/sonota/20230116/amlhojokin.html

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