FSA Weekly Review No.534 April 20, 2023

FSA Weekly Review No.534: April 20, 2023

What’s New on the FSA Website

Week of April 7, 2023 - April 13, 2023

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

Public Comments

April 10, 2023	Publication of the draft "Cabinet Office Order to Amend the Cabinet Office Order on the System for Ensuring the Adequacy of Documents on Financial Calculation and of Other Information" for public consultation <Summary> The FSA proposed the draft "Cabinet Office Order to Amend the Cabinet Office Order on the System for Ensuring the Adequacy of Documents on Financial Calculation and of Other Information" (hereinafter referred to as the "proposal") for public consultation. The proposal was made in response to the revision* of the "Standards and Practice Standards for Management Assessment and Audit concerning Internal Control over Financial Reporting" (provisional English title) (hereinafter referred to as the "Internal Control Standards and Practice Standards"), which was conducted by the Business Accounting Council** at its plenary meeting on April 7, 2023, from the perspective of improving the effectiveness of internal control over financial reporting. The proposal is mainly aimed at providing corresponding amendments to the said Cabinet Office Order, and relevant and applicable laws and regulations following the recent revision of "Internal Control Standards and Practice Standards." Public comments will be accepted until 5:00 p.m. (JST), May 12, 2023. * The revision mainly pertains to the addition of items to be included in the "Internal Control Report," "Amended Internal Control Report," and "Internal Control Audit Report." ** The Business Accounting Council is comprised of external experts and stakeholders, wherein the FSA serves as the secretariat. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/sonota/20230410/20230410.html

April 10, 2023

Publication of the draft "Cabinet Office Order to Amend the Cabinet Office Order on the System for Ensuring the Adequacy of Documents on Financial Calculation and of Other Information" for public consultation
<Summary>
The FSA proposed the draft "Cabinet Office Order to Amend the Cabinet Office Order on the System for Ensuring the Adequacy of Documents on Financial Calculation and of Other Information" (hereinafter referred to as the "proposal") for public consultation.
The proposal was made in response to the revision* of the "Standards and Practice Standards for Management Assessment and Audit concerning Internal Control over Financial Reporting" (provisional English title) (hereinafter referred to as the "Internal Control Standards and Practice Standards"), which was conducted by the Business Accounting Council** at its plenary meeting on April 7, 2023, from the perspective of improving the effectiveness of internal control over financial reporting.
The proposal is mainly aimed at providing corresponding amendments to the said Cabinet Office Order, and relevant and applicable laws and regulations following the recent revision of "Internal Control Standards and Practice Standards."
Public comments will be accepted until 5:00 p.m. (JST), May 12, 2023.

* The revision mainly pertains to the addition of items to be included in the "Internal Control Report," "Amended Internal Control Report," and "Internal Control Audit Report."

** The Business Accounting Council is comprised of external experts and stakeholders, wherein the FSA serves as the secretariat.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/sonota/20230410/20230410.html open new window

Press Releases

International

April 7, 2023	EU-Asia Pacific Forum on Financial Regulation

Councils

April 13, 2023	Publication of the agenda and handouts of the sixth 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 sixth meeting of the "Working Group on Financial Institutions' Efforts towards the Decarbonization of the Economy," which was held on April 14, 2023. In the sixth meeting, the secretariat (the FSA) gave a briefing on the key topics to be included in the (draft) report for a summary of discussions of the Working Group, whereby a guest practitioner presented the findings from a research* commissioned by the FSA regarding climate change responses of regional SMEs and the corresponding support provided by regional financial institutions, followed by a discussion among the Working Group members. * This research was compiled as a report [available only in Japanese]. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/singi/decarbonization/siryou/20230414.html
April 11, 2023	The Council of Experts Concerning the Follow-up of Japan's Stewardship Code and Japan's Corporate Governance Code: Twenty-Eighth Meeting

April 13, 2023

Publication of the agenda and handouts of the sixth 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 sixth meeting of the "Working Group on Financial Institutions' Efforts towards the Decarbonization of the Economy," which was held on April 14, 2023.
In the sixth meeting, the secretariat (the FSA) gave a briefing on the key topics to be included in the (draft) report for a summary of discussions of the Working Group, whereby a guest practitioner presented the findings from a research* commissioned by the FSA regarding climate change responses of regional SMEs and the corresponding support provided by regional financial institutions, followed by a discussion among the Working Group members.

* This research was compiled as a report [available only in Japanese].

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/singi/decarbonization/siryou/20230414.html open new window

April 11, 2023

The Council of Experts Concerning the Follow-up of Japan's Stewardship Code and Japan's Corporate Governance Code: Twenty-Eighth Meeting

Banks

April 28, 2022	Publication of brochures for business owners to publicize "Reform Program regarding Personal Guarantee Provided by Business Owners" (provisional English title) <Summary> Following the "Reform Program regarding Personal Guarantee Provided by Business Owners"* (provisional English title) [available only in Japanese], which was published in December 2022 to further accelerate the establishment of lending practices by financial institutions that do not rely on personal guarantee provided by business owners, the FSA has created a brochure for business owners to widely publicize the said reform program particularly among them. * This reform program was developed by the FSA in collaboration with METI (Ministry of Economy, Trade and Industry) and MoF (Ministry of Finance). The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/ginkou/20230413.html
April 11, 2023	Results of a questionnaire survey on financial institutions' sales and product management systems for financial instruments, such as investment trusts <Summary> The FSA regularly conducts comprehensive monitoring of financial institutions' sales and product management systems for financial instruments, such as investment trusts, to ensure "customer-oriented business conduct" thereof, aimed at developing an environment enabling stable asset formation of the public. As part of this monitoring, the FSA conducted a questionnaire survey of 100 regional banks regarding the current status of sales and their internal control systems for sales of financial instruments, such as investment trusts, and published its results (available only in Japanese). The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/kokyakuhoni/20230411/fd_20230411.html

April 28, 2022

Publication of brochures for business owners to publicize "Reform Program regarding Personal Guarantee Provided by Business Owners" (provisional English title)
<Summary>
Following the PDF

"Reform Program regarding Personal Guarantee Provided by Business Owners"* (provisional English title) [available only in Japanese], which was published in December 2022 to further accelerate the establishment of lending practices by financial institutions that do not rely on personal guarantee provided by business owners, the FSA has created a brochure for business owners to widely publicize the said reform program particularly among them.

* This reform program was developed by the FSA in collaboration with METI (Ministry of Economy, Trade and Industry) and MoF (Ministry of Finance).

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/ginkou/20230413.html open new window

April 11, 2023

Results of a questionnaire survey on financial institutions' sales and product management systems for financial instruments, such as investment trusts
<Summary>
The FSA regularly conducts comprehensive monitoring of financial institutions' sales and product management systems for financial instruments, such as investment trusts, to ensure "customer-oriented business conduct" thereof, aimed at developing an environment enabling stable asset formation of the public.

As part of this monitoring, the FSA conducted a questionnaire survey of 100 regional banks regarding the current status of sales and their internal control systems for sales of financial instruments, such as investment trusts, and published its

results (available only in Japanese).

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/kokyakuhoni/20230411/fd_20230411.html open new window

Securities

April 7, 2023	Administrative penalty charge against an individual for communicating insider information to a non-insider (retail investor) based on insider information obtained as an employee of N.Field Co., Ltd. in regard to the implementation of a tender offer for the shares of the entity <Summary> On April 6, 2023, the FSA issued an order to impose an administrative penalty charge against an individual who communicated insider information to a non-insider (retail investor) in violation of the "Financial Instruments and Exchange Act," regarding the implementation of a tender offer for the shares of the entity, based on what the individual obtained as an employee of N.Field Co., Ltd. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/shouken/20230406-2.html
April 7, 2023	Administrative penalty charge against an individual (non-insider/retail investor) for committing insider trading regarding stocks of N.Field Co., Ltd., by using information received from an employee of the entity <Summary> On April 6, 2023, the FSA issued an order to impose an administrative penalty charge against an individual (non-insider/retail investor) for committing insider trading regarding stocks of N.Field Co., Ltd., in violation of the "Financial Instruments and Exchange Act," by using information received from an employee of the entity. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/shouken/20230406-1.html

April 7, 2023

Administrative penalty charge against an individual for communicating insider information to a non-insider (retail investor) based on insider information obtained as an employee of N.Field Co., Ltd. in regard to the implementation of a tender offer for the shares of the entity
<Summary>
On April 6, 2023, the FSA issued an order to impose an administrative penalty charge against an individual who communicated insider information to a non-insider (retail investor) in violation of the "Financial Instruments and Exchange Act," regarding the implementation of a tender offer for the shares of the entity, based on what the individual obtained as an employee of N.Field Co., Ltd.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/shouken/20230406-2.html open new window

April 7, 2023

Administrative penalty charge against an individual (non-insider/retail investor) for committing insider trading regarding stocks of N.Field Co., Ltd., by using information received from an employee of the entity
<Summary>
On April 6, 2023, the FSA issued an order to impose an administrative penalty charge against an individual (non-insider/retail investor) for committing insider trading regarding stocks of N.Field Co., Ltd., in violation of the "Financial Instruments and Exchange Act," by using information received from an employee of the entity.

The original press release is available in Japanese at the following URL.
https://www.fsa.go.jp/news/r4/shouken/20230406-1.html open new window

Others

April 11, 2023	Stewardship Code : 323 institutional investors have signed up to the Principles for Responsible Institutional Investors as of March 31, 2023
April 11, 2023	Results of a survey on investor satisfaction with NISA <Summary> The FSA commissioned Nomura Research Institute, Ltd. to conduct a survey on investor satisfaction with NISA, and published the compiled report (available only in Japanese). The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/common/about/research/20230407_2/20230407_2.html
April 7, 2023	Publication of a research report on internationally credible transition towards decarbonization by financial institutions <Summary> Amid acceleration of international initiatives and efforts aimed at decarbonization, the FSA commissioned KPMG AZSA LLC to conduct research on international discussions on transition towards decarbonization and forward-looking initiatives and efforts taken by domestic and foreign companies and financial institutions, thereby publishing the compiled research report [available only in Japanese] on April 7, 2023. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/common/about/research/20230407/20230407-1.html
April 7, 2023	Publication of a research report on climate change responses of regional SMEs and the corresponding support provided by regional financial institutions <Summary> The FSA commissioned EY Strategy and Consulting Co., Ltd. to conduct research on climate change responses of regional small- and medium-sized enterprises (SMEs) and the corresponding support provided by regional financial institutions. The FSA published the compiled research report [available only in Japanese] on April 7, 2023. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/common/about/research/20230407/20230407-2.html
April 7, 2023	Finalization of the revisions to "Standards and Practice Standards for Management Assessment and Audit concerning Internal Control over Financial Reporting" (provisional English title) after public consultation <Summary> The FSA finalized the revisions to "Standards and Practice Standards for Management Assessment and Audit concerning Internal Control over Financial Reporting" (council opinion) [provisional English title] compiled by the Internal Control Committee of the Business Accounting Council after public consultation. The finalized revisions are based on the discussions held since October 2022 in the Internal Control Committee, as well as the discussion held on the plenary meeting of the Business Accounting Council on April 7, 2023, following the public consultation, mainly in regard to the basic framework of internal control, assessment and reporting of internal control by corporate management, internal control audit by auditors, and actions to be taken when an internal control report is revised, aimed at improving the effectiveness of internal control. The finalized revisions took effect on April 7, 2023. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r4/sonota/20230407/20230407.html
April 7, 2023	Updated statistics of money lending business

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