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FSA Weekly Review No.524 - February 9, 2023
What’s New on the FSA Website
Week of January 27, 2023 - February 2, 2023
This page contains the latest in events, developments, and updates to the FSA website.
Public Comments
| January 31, 2023 | Publication of the draft amendments to the "Comprehensive Guidelines for Supervision for Insurance Companies [Separate Volume] (Supervisory Guidelines for Small-Claims and Short-Term Insurance Businesses Operators)" for public consultation <Summary> The FSA has published the draft amendments (hereinafter referred to as the "proposal") to the "Comprehensive Guidelines for Supervision for Insurance Companies [Separate Volume] (Supervisory Guidelines for Small-Claims and Short-Term Insurance Businesses Operators)" for public consultation. Against the backdrop of the recent increase in the number of registered small-claims and short-term insurance business operators (small-amount and short-term insurance business companies), and of the diversification of their scale, features, and range of products offered, the FSA took several serious administrative actions against small-claims and short-term insurance business operators in 2022 to protect insurance policy holders and other relevant parties. In response to such circumstances, the said  proposal (old and new comparison chart is available only in Japanese) is intended to provide amendments to the Guidelines, mainly aimed at enhancing the monitoring system and other applicable measures to swiftly identify small-claims and short-term insurance business operators with concerns about their financial soundness and operational appropriateness, thereby encouraging them to take appropriate measures.Public comments will be accepted until 05:00 p.m. (JST), March 3, 2023. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/hoken/20230131/20230131.html |
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| January 31, 2023 | Publication of the finalized amendments to the "Cabinet Office Order on Disclosure of Corporate Affairs" and other relevant and applicable cabinet office orders after public consultation <Summary> The FSA finalized the amendments to the "Cabinet Office Order on Disclosure of Corporate Affairs" and other relevant and applicable cabinet office orders after public consultation. In response to the recommendation in the summary report of the "Working Group on Corporate Disclosure" (FY 2021)* of the Financial System Council published in June 2022 to develop a regulatory framework mainly for "disclosure of corporate initiatives regarding sustainability" and "disclosure of corporate governance," the finalized Cabinet Office Order provides amendments to the narrative information to be filled out in the Annual Securities Report and Securities Registration Statement. In this regard, the FSA also finalized the amendments to the "Cabinet Office Order on Special Provisions for Procedures by Use of an Electronic Data Processing System for Disclosure" to allow the filing of disclosure documents using alternative methods as a temporary measure in the event where EDINET is not in operation. The finalized amendments to the Cabinet Office Order took effect on January 31, 2023. * The summary report refers to The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/sonota/20230131/20230131.html |
| January 27, 2023 | Publication of the finalized amendments to the relevant and applicable Cabinet Office Orders, Ministerial Orders, and regulatory notices pertaining to leverage ratio requirements applicable to the Norin Chukin Bank and the Shoko Chukin Bank Limited after public consultation <Summary> The FSA finalized the amendments to the relevant and applicable Cabinet Office Orders, Ministerial Orders, and regulatory notices pertaining to leverage ratio requirements applicable to the Norin Chukin Bank and the Shoko Chukin Bank Limited after a series of public consultations held in July and September 2022, following the corresponding amendments applicable to banks and bank holding companies, promulgated in November 2022. The FSA announced on March 25, 2022, that the temporary measure to exclude the outstanding balance of financial institutions' current accounts at the Bank of Japan (BOJ) from the calculation of leverage ratio exposures would end at the end of March 31, 2024. The finalized amendments to the Cabinet Office Orders, Ministerial Orders, and regulatory notices raise the required level of leverage ratio from 3% to 3.15%, while excluding the outstanding balance of financial institutions' current accounts at the BOJ from the exposure measure in exceptional macroeconomic circumstances from April 2024 onwards, for the post-COVID-19 response framework. The respective Cabinet Office Orders, Ministerial Orders, and regulatory notices will take effect on April 1, 2024. Note: ・ For G-SIBs, an additional 0.05% would be added to the leverage buffer to compensate for the leverage buffer applicable to G-SIBs. ・ The minimum required TLAC ratio on a total leverage exposure basis will be also raised by 0.35% from 6.75% to 7.10%, after excluding the outstanding balance of financial institutions' current accounts at the BOJ. ・ Leverage ratios and total leverage exposure-based TLAC ratios shall continue to be disclosed for both the values that include and exclude the outstanding balance of financial institutions' current accounts at the BOJ. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/ginkou/20230127.html |
| January 27, 2023 | Publication of the draft amendments to the "Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc." and others for public consultation <Summary> The FSA proposed the draft amendments to the "Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.," and others for public consultation. The proposal is mainly intended to provide amendments to the guidelines and others, in regard to books and documents related to the business of financial instruments business operators, etc., for which the obligation to prepare and preserve such books and documents is stipulated in laws and regulations, aimed at clarifying the points to be noted concerning the preservation of such books and documents offshore. Public comments will be accepted until 5:00 p.m. (JST), February 28, 2023. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/shouken/20230127/20230127.html |
| January 27, 2023 | Publication of the draft amendments to the "Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc." for public consultation <Summary> The FSA proposed the draft amendments to the "Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc." for public consultation. The proposal is mainly aimed at providing amendments to the Guidelines in response to recommendations made by the Financial Stability Board (FSB) and the International Organization of Securities Commission (IOSCO) in terms of the following: 1.Updating rules to require fund managers and specially permitted business for qualified institutional investors (SPBQII) to file monitoring reports on the funds they manage. 2.Updating rules to require MRF (Money Reserve Fund) and MMF (Money Market Fund) managers to develop contingency plans to address any vulnerabilities in their MRFs and MMFs. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/shouken/20230127-2/20230127.html |
Press Releases
Councils
| February 2, 2023 | Publication of the agenda and handouts of the seventh meeting of the "Working Group on Legal Institutions for Cash-flow-focused Lending Practices" (provisional English title) of the Financial System Council <Summary> The FSA published the agenda and handouts of the seventh meeting of the "Working Group on Legal Institutions for Cash-flow-focused Lending Practices" (provisional English title) of the Financial System Council, which was held on February 2, 2023. In the seventh meeting, the working group members discussed and compiled the draft "Summary Report of the Working Group on Legal Institutions for Cash-flow-focused Lending Practices" (provisional English title), based on the discussions held at previous meetings. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/singi/singi_kinyu/jigyoyushi_wg/siryou/20230202.html |
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| January 27, 2023 | Publication of the agenda and handouts of the fourth meeting of the "Working Group on Impact Investment" <Summary> The FSA published the agenda and handouts of the fourth meeting of the "Working Group on Impact Investment," which was held on January 30, 2023. Briefings on the gist and key discussion topics of the first to third meetings were given by the secretariat (the FSA) of the Working Group, whereby the Working Group members discussed ways to proceed with topics and issues to be discussed further within the Working Group. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/singi/impact/siryou/20230130.html |
Banks
| January 31, 2023 | Approval of a business adaptation plan for The Higo Bank, Ltd. <Summary> The FSA approved and published a business adaptation plan for The Higo Bank, Ltd. pursuant to the "Industrial Competitiveness Enhancement Act." The implementation period of the adaptation plan will be from February 2023 to March 2027. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/ginkou/20230131/20230131.html |
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| January 31, 2023 | Approval of a business adaptation plan for The Hyakujushi Bank, Ltd. <Summary> The FSA approved and published a business adaptation plan for The Hyakujushi Bank, Ltd. pursuant to the "Industrial Competitiveness Enhancement Act." The implementation period of the adaptation plan will be from February 2023 to March 2027. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/ginkou/20230131-2/20230131-2.html |
| January 30, 2023 | Overview of modifications to lending conditions by financial institutions <Summary> The FSA published an overview of modifications to lending conditions made by financial institutions for the period from March 10, 2020 to December 31, 2022. *The majority of the data reflects the data until December 31, 2022, whereas the data of cooperative financial institutions reflects the data until September 30, 2022. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/ordinary/coronavirus202001/kashitsuke/20200430.html |
Others
| February 1, 2023 | "Regional Banking Summit (Re:ing/SUM)" and "Nikkei Regional Revitalization Forum" jointly organized by the FSA and Nikkei Inc. <Summary> As in the previous year (FY 2021), the FSA and Nikkei Inc. will jointly hold the "Regional Banking Summit (Re:ing/SUM) and "Nikkei Regional Revitalization Forum" online on February 20 and 21, 2023. Particularly with regard to regional banking in the new Japanese era, Reiwa, the Summit (Re:ing/SUM) is an event to encourage attendees to think about the sustainable future that regional leaders/players would like to create by leveraging the potential of regional banking in collaboration with a wide range of stakeholders based on the following concepts: 1. [Release]: Release thoughts/ideas and breakthrough mental barriers to foster mutual and common understanding with stakeholders 2. [Remarkable]: Offer/share remarkable ideas and practices 3. [Redesign]: Aim at redesigning/rebuilding sustainable banking business models toward the further enhancement of regional banking resilience The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/ginkou/20230201-3/20230201-3.html |
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| January 31, 2023 | Publication of the FY 2022 edition of the reference casebook of good practices on the disclosure of narrative information, mainly in terms of corporate sustainability, etc. <Summary> The FSA has been publishing a series of reference casebooks of good practices on the disclosure of narrative information to encourage the disclosure of enhanced corporate narrative information that contributes to constructive dialogue between investors and corporations. Following the final updates to the FY 2021 edition of the reference casebook in March 2022, the FSA has newly published the FY 2022 edition of the reference casebook of good practices on the disclosure of narrative information, mainly in terms of the following, which are considered to be the key items in annual securities reports, in addition to a key narrative information item, "corporate sustainability"*: - (corporate) management's policy, business environment, and issues to be addressed - business risks, and - (corporate) management's discussion and analysis (MD&A) of its financial position, operating results, and cash flow situation. The FY 2022 edition of the reference casebook has been compiled by the "Study Group for Collecting Good Practices on Corporate Disclosure of Narrative Information Based on the Principles Regarding the Disclosure of Narrative Information,"** and it shares the latest collection of favorable practices on the disclosure of narrative information mainly in terms of corporate sustainability. (Updates to the casebook are made as deemed necessary). * Corporate disclosure of sustainability information is a key corporate disclosure element that has been gaining focus and interest in society lately. Relevant initiatives to enhance corporate disclosure of sustainability information are encouraged through amendments to the Corporate Governance Code and other measures. ** The Study Group is to bring investors, analysts and representatives from listed companies together to update the reference casebook. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/singi/20230131/00.html |
| January 31, 2023 | Publication of the updated regulatory notice concerning the designation of related corporations of credit rating agencies (group-based designation concerning explanatory items of unregistered credit ratings) <Summary> The FSA published the updated regulatory notice concerning the designation of related corporations of credit rating agencies (group-based designation concerning explanatory items of unregistered credit ratings), whereby the FSA updated the list of designated credit rating agencies (unregistered credit rating agencies which belong to the same group of registered credit rating agencies and fulfill the requirements). The duty of securities companies to explain certain matters to their customers is partially alleviated when securities companies use credit ratings provided by the credit rating agencies that are on the said list. The updated list took effect on January 31, 2023. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/shouken/20230131/20230131_groupshitei.html |
| January 27, 2023 | Administrative action against HIBISCUS Audit Corporation <Summary> The FSA took an administrative action against HIBISCUS Audit Corporation, ordering the improvement of its business management structure pursuant to the "Certified Public Accountants Act." This administrative action is based on a recommendation from the Certified Public Accountants and Auditing Oversight Board as a result of their on-site monitoring. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/sonota/20230127.html |
| January 27, 2023 | Updated list of entities that are operating financial instruments businesses without proper registration (The Kanto Local Finance Bureau) <Summary> The FSA and the Kanto Local Finance Bureau issued warnings to entities that are operating financial instruments businesses without proper registration. (See the updated lists of  Japan-based entities* and foreign-based entities).These lists also include the warned non-registered entities with untraceable/unidentified addresses. (Postal and/or web addresses on the list of the warned non-registered foreign-based entities reflect those shown on their respective webpages, not necessarily the addresses that could be traced and identified). The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/ordinary/chuui/mutouroku.html |
| January 27, 2023 | Updated list of issuers of gift certificates in repayment procedures based on the ’Payment Services Act’ |
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