Financial Services AgencyFSA Weekly Review No.533

April 13, 2023

What’s New on the FSA Website

Week of March 31, 2023 - April 6, 2023

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

Public Comments

April 5, 2023 Publication of the draft amendments to the "Comprehensive Guidelines for Supervision of Small- and Medium-Sized and Regional Financial Institutions" alongside the draft amendments to other relevant and applicable comprehensive guidelines for public consultation
<Summary>
The FSA proposed the draft amendments to the "Comprehensive Guidelines for Supervision of Small- and Medium-Sized and Regional Financial Institutions" alongside the draft amendments to other relevant and applicable comprehensive guidelines for public consultation.
In response to requests from financial institutions to establish a category of "advanced banking service companies," the proposal is aimed at clarifying perspectives in conducting proof-of-concept trials to verify the corporate profitability and business continuity/sustainability of "advanced banking service companies" in a banking group, including the main banking service company.
Public comments will be accepted until 12:00 p.m. [noon] (JST), May 8, 2023. 

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/ginkou/20230405/20230405.htmlopen new window
March 31, 2023 Publication of the draft amendments to the "Points to Note on Disclosure of Corporate Affairs, etc. (Guidelines for Disclosure of Corporate Affairs, etc.)" (provisional English title) for public consultation
<Summary>
The FSA published the draft amendments (hereinafter referred to as the "proposal") to the "Points to Note on Disclosure of Corporate Affairs, etc. (Guidelines for Disclosure of Corporate Affairs, etc.)" (provisional English title) for public consultation.
In response to the recommendation made in the report on a review of the IPO public offering price setting process compiled and published in February 2022 by the "Working Group on Optimizing the Public Offering Price-Setting Process" [provisional English title] of the Japan Securities Dealers Association (JSDA) that IPO (Initial Public Offering) prices be set forth outside the scope of preliminary (provisional) pricing terms as a matter related to disclosure regulations, the proposal is intended to provide corresponding amendments to "Points to Note on Disclosure of Corporate Affairs, etc. (Guidelines for Disclosure of Corporate Affairs, etc.)"
Public comments will be accepted until 05:00 p.m. (JST), May 1, 2023.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/sonota/20230331/20230331.htmlopen new window
March 31, 2023 Publication of the finalized amendments to the "Comprehensive Guidelines for Supervision for Insurance Companies [Separate Volume] (Supervisory Guidelines for Small-Claims and Short-Term Insurance Businesses Operators)" after public consultation 
<Summary>
The FSA finalized the amendments to the "Comprehensive Guidelines for Supervision for Insurance Companies [Separate Volume] (Supervisory Guidelines for Small-Claims and Short-Term Insurance Businesses Operators)" after 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 finalized amendments mainly enhance 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.
The finalized amendments took effect on April 1, 2023.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/hoken/20230331-2/20230331-2.htmlopen new window
March 31, 2023 Response to the FSA’s Consulation on the Proposed Amendment of the Comprehensive Supervisory Guidelines for Financial Instruments Business Operators, etc. regarding ESG Investment Trusts 
March 31, 2023 Publication of the finalized amendments to the "Guidelines for Administrative Processes" regarding funds transfer service providers after public consultation
<Summary>
The FSA finalized the amendments to the "Guidelines for Administrative Processes" regarding funds transfer service providers after public consultation.
The finalized amendments to the said Guidelines set forth supervisory measures to be taken for funds transfer service providers, in response to the "Ministerial Order to Amend the Regulation for Enforcement of the Labor Standards Act to Allow Wage Payment to the Accounts of Funds Transfer Service Providers Designated by the Minister of Health, Labor and Welfare" (provisional English title) [promulgated on November 28, 2022].
The finalized amendments took effect on April 1, 2023.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/sonota/20230331-2/20230331-2.htmlopen new window
March 31, 2023 Publication of the updated regulatory notice of the "Mutual Fund for Tsumitate NISA (Dollar-Cost Averaging NISA)" to specify certain requirements
<Summary>
The FSA published the updated regulatory notice of the "Mutual Fund for Dollar-Cost Averaging NISA (individual saving account for periodic investment)" to specify certain requirements. The updates were enforced on April 1, 2023.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/20230331/20230331.htmlopen new window
March 31, 2023 Publication of the finalized "Cabinet Office Order to Amend the Enforcement Regulation of the Insurance Business Act," etc. after public consultation
<Summary>
The FSA published the finalized "Cabinet Office Order to Amend the Enforcement Regulation of the Insurance Business Act" alongside the finalized amendments to the relevant and applicable Order, regulatory notices, and "Comprehensive Guidelines for Supervision of Insurance Companies" after public consultation.
The finalized Cabinet Office Order provides amendments to the said Enforcement Regulation, so that various disclosure regulations under the "Insurance Business Act" can be applicable to IFRS (International Financial Reporting Standards) when an insurance business group voluntarily adopts IFRS and other regulations.
The finalized Cabinet Office Order was enforced on April 1, 2023. The finalized amendments to the relevant and applicable Orders, regulatory notices, and to comprehensive guidelines for supervision were enforced or took effect on April 1, 2023.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/hoken/20230331/20230331.htmlopen new window

Press Releases

International 

April 5, 2023 G7 High-Level Corporate Governance Roundtable
April 5, 2023 Japan and Vietnam Sign Letters on Cooperation Framework regarding Innovation
in the Financial Sector 

Councils

April 5, 2023 Publication of the agenda and handouts of the plenary meeting of the Business Accounting Council
<Summary>
The FSA published the agenda and handouts of the plenary meeting of the Business Accounting Council, which was held on April 7, 2023.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/singi/singi_kigyou/siryou/kaikei/20230331.htmlopen new window
March 31, 2023 Publication of the agenda and handouts, as well as the outlines of proceedings of the third meeting of "Advisory Council on Scenario Data for Climate Change Risk and Opportunity Assessment" (provisional English title)
<Summary>
The FSA, as a co-host member of the secretariat* of the "Advisory Council on Scenario Data for Climate Change Risk and Opportunity Assessment" (provisional English title), published the agenda and handouts, as well as the outlines of proceedings of the third meeting of the Advisory Council, which was held on March 9, 2023.
In the third meeting, companies from the private sector participating in the Advisory Council gave presentations on their current initiatives and efforts, challenges, and requests in terms of climate change risk assessment, followed by a Q&A session and exchange of opinions among the meeting participants.
 

* The secretariat of the Advisory Council** is co-hosted by the FSA, Ministry of Education, Culture, Sports, Science and Technology, Ministry of Land, Infrastructure, Transport and Tourism, and Ministry of the Environment, with the representatives from the financial and non-financial sectors as Advisory Council members, and representative officials from the relevant government ministries and agencies as observers.

** The Advisory Council is aimed at exchanging opinions on climate change-related data among stakeholders in the public and private sectors regarding their needs, challenges, and future directions to appropriately use climate change-related data, thereby effectively responding to climate change.


The original press releases are available in Japanese at the following URLs.
https://www.fsa.go.jp/singi/scenario_data/siryou/20230309.htmlopen new window
https://www.fsa.go.jp/singi/scenario_data/gijiyousi/20230309.htmlopen new window

Banks

March 31, 2023 Approval (and validation) of business adaptation plans (in terms of reduction of environmental burden associated with energy usage) for The Joyo Bank, Ltd., The Bank of Yokohama, Ltd., and The Daishi Hokuetsu Bank, Ltd.
<Summary>
The FSA approved (and validated) the business adaptation plans (in terms of reduction of environmental burden associated with energy usage) for The Joyo Bank, Ltd., The Bank of Yokohama, Ltd., and The Daishi Hokuetsu Bank, Ltd., pursuant to the "Industrial Competitiveness Enhancement Act."
The implementation period of the adaptation plan for The Joyo Bank, Ltd. will be from March 2023 to March 2024, while the implementation period for The Bank of Yokohama, Ltd., and The Daishi Hokuetsu Bank, Ltd. will be from March 2023 to March 2025.

The original press releases are available in Japanese at the following URLs.
https://www.fsa.go.jp/news/r4/ginkou/20230331-2/20230331-2.htmlopen new window
https://www.fsa.go.jp/news/r4/ginkou/20230331-4/20230331-4.htmlopen new window
https://www.fsa.go.jp/news/r4/ginkou/20230331-5/20230331-5.htmlopen new window

Insurance

March 31, 2023 Approval of the amendments to the business adaptation plan for TAIYO LIFE INSURANCE COMPANY
<Summary>
The FSA approved and published the amended business adaptation plan for TAIYO LIFE INSURANCE COMPANY regarding its initiatives to achieve carbon neutrality, and so forth, based on the "Industrial Competitiveness Enhancement Act." The implementation period of the adaptation plan is scheduled from March 2022 to March 2024.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/hoken/20230331-3/20230331.htmlopen new window

Others

April 4, 2023 Updated FSA's web portal for the information on tax measures for financial securities, and so forth by sharing the response from the NTA (National Tax Agency) to a written inquiry filed by the FSA in regard to incentive payments under the "Workplace Dollar-Cost Averaging NISA"
<Summary>
The FSA updated its web portal for the information on tax measures for financial securities and so forth, by sharing the URL (the webpage of the National Tax Agency (NTA)open new window) of the response from the NTA to a written inquiry filed by the FSA in regard to the treatment of tax incentives (tax measures) for the promotion of wage increases (under the FY2022 tax reform) in terms of incentive payments to employees under the "Workplace Dollar-Cost Averaging NISA."

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/policy/shokenzeisei/index.htmlopen new window
April 3, 2023 Warning against uninvited fraudulent investment solicitations related to financial products, such as FX (foreign exchanges), binary options, crypto-assets (virtual currencies), and so forth through SNS (Social Network Services) and/or other services/apps
<Summary>
The FSA issued a warning against uninvited fraudulent investment solicitations related to financial products, such as FX (foreign exchanges), binary options, crypto-assets (virtual currencies), and so forth through SNS (Social Network Services), and/or other services/apps.
While solicitation of investments in FX, binary options, crypto assets, and so forth without obtaining a customer's consent/approval is prohibited, there has been an increasing number of cases of uninvited fraudulent investment solicitations related to the said financial products reported, where people are solicited to invest in such products through pushy recommendations to join investment seminars and/or to use automated trading software by friends and/or the people they meet particularly on SNS, and/or other services/apps, and are having trouble withdrawing their funds, etc. as a result of trading with the foreign business operators they have been introduced to therein.
The FSA alerts the public to use a skeptical eye, and make prudent judgment when they receive such investment solicitations from a person/entity they have met through SNS, and/or other services/apps, thereby checking whether the person/entity soliciting investment is registered as a crypto asset exchange service provider or financial instruments business operator, etc., by referring to the "List of Licensed (Registered) Financial Institutions."

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/ordinary/chuui/husyouseikanyuu.htmlopen new window
April 3, 2023 Warning against fraudulent investment solicitations, etc. by entities involving the name of the FSA
<Summary>
The FSA issued a warning against fraudulent investment solicitations, etc. by entities involving the name of the FSA. It has been reported that the FSA's name is being used in investment solicitations to create the appearance of credible financial products, events, etc. as if they are endorsed by the FSA.
The FSA stresses that the events the FSA sponsors or co-sponsors are limited to non-profit events and so forth conducted by public organizations of the state or municipalities, non-profit organizations such as public interest corporations, and media organizations, whereby the FSA does NOT sponsor or co-sponsor any commercial events or products conducted by individuals or entities.
The FSA alerts people to beware of such fraudulent attempts, thereby encouraging people to report to (and/or consult with) the authorities (such as the FSA’s Counseling Office for Financial Services Users) whenever any hint of fraudulence is detected.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/ordinary/chuui/kinnyuuchounona.htmlopen new window
April 3, 2023 Publication of the updated examination criteria for dispositions under the "Act on the Protection of Personal Information"
<Summary>
The FSA updated the examination criteria for dispositions under the "Act on the Protection of Personal Information." The updates were provided mainly in response to the enforcement of the "Act on the Arrangement of Related Laws for the Formation of a Digital Society" that partially amends the "Act on the Protection of Personal Information" (enforced on April 1, 2023).
The updates mainly pertain to technical amendments, and no public consultation was conducted, for the updates fall under cases prescribed in the "Administrative Procedures Act" as being insignificantly changed and not requiring the implementation of procedures for public consultation, such as the arrangement of the necessary provisions in accordance with the establishment, amendment or repeal of other laws and regulations.
The updated examination criteria was enforced on April 1, 2023.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/sonota/20230403/230403.htmlopen new window
April 3, 2023 Updated certain fill-in requirements of the designated reporting format pertaining to the status of financial institutions' initiatives and efforts that have been taken so far and are to be taken based on the "Principles for Customer-Oriented Business Conduct"
<Summary>
From the perspective of furthering the implementation of customer-oriented business conduct by financial institutions, the FSA updated the certain fill-in requirements of the designated reporting format pertaining to the status of financial institutions' initiatives and efforts that have been taken so far and are to be taken based on the "Principles for Customer-Oriented Business Conduct."
The updates will apply to the reports filed from June 30, 2023, onwards.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/kokyakuhoni/20230401/fd_20230401.htmlopen new window
April 3, 2023 Establishment of "Hotline on Personal Guarantees Provided by Business Owners" (provisional English title)
<Summary>
The FSA established "Hotline on Personal Guarantees Provided by Business Owners" (provisional English title) as a contact point to hear from guarantors, including business owners by telephone. Information received through the hotline will be used for monitoring and supervision, including feedback to financial institutions.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/receipt/k_hotline/k_hotline.htmlopen new window
March 31, 2023 Renewal of the FSA's web portal for the information on the Basel Framework
<Summary>
In Japan, financial institutions are allowed to apply the finalized Basel III standards on or after March 31 2023. The FSA renewed its web portal for the information on the Basel Framework by (1) consolidating relevant and applicable regulatory notices, Comprehensive Guidelines for Supervision, and Q&As to make the web portal more accessible and comprehensible, and by (2) publishing the list of financial institutions that apply the new standards.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/policy/basel_ii/index.htmlopen new window
March 31, 2023 Publication of a report, titled "Survey of Corporate Lending and Business Revitalization Practices Utilizing All-Asset Collateral in the United States" (provisional English title)
<Summary>
The FSA commissioned the JAPAN INSTITUTE OF BUSINESS LAW, a public interest incorporated association, to conduct a survey of the systems and practices of financing utilizing all-asset collateral in the United States and the United Kingdom, and to conduct a study of how corporate lending practices and utilization should be when new collateral systems are introduced in Japan in light of the characteristics of the systems and practices in those countries, thereby publishing the compiled report, titled "Survey of Corporate Lending and Business Revitalization Practices Utilizing All-Asset Collateral in the United States" (provisional English title) on March 31, 2023.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/common/about/research/20230331/20230331.htmlopen new window
March 31, 2023 Administrative action against PKF Hibiki Audit Corporation
<Summary>
The FSA took an administrative action against PKF Hibiki 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/20230331.htmlopen new window
March 31, 2023 Publication of statistics regarding unlawful reimbursement of deposits (as of the end of December 2022)
<Summary>
The FSA published statistics regarding unlawful reimbursement of deposits caused by counterfeit and stolen cash cards, stolen deposit books, and unlawful Internet banking activities. The statistics include details of incidents and compensation made by financial institutions based on reports from the financial institutions.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/ginkou/20230331.htmlopen new window
March 31, 2023 Warnings issued to Bitget Limited, MEXC Global, Bybit Fintech Limited, and Bitforex Limited that are operating crypto-asset (virtual currency) exchange business without proper registration
<Summary>
Based on the "Guidelines for Administrative Processes," the FSA issued warnings to Bitget Limited, MEXC Global, Bybit Fintech Limited, and Bitforex Limited that are operating crypto-asset (virtual currency) exchange business without proper registration in violation of the "Payment Services Act."

The original press releases are available in Japanese at the following URLs.
PDFhttps://www.fsa.go.jp/policy/virtual_currency02/BitgetLimited_
keikokushiryo.pdf
open new window
PDFhttps://www.fsa.go.jp/policy/virtual_currency02/MEXCGlobal_
keikokushiryo.pdf
open new window
PDFhttps://www.fsa.go.jp/policy/virtual_currency02/BybitFintechLimited2_
keikokushiryo.pdf
open new window
PDFhttps://www.fsa.go.jp/policy/virtual_currency02/BitforexLimited2_
keikokushiryo.pdf
open new window
March 31, 2023 Trends in High-Speed Trading

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