FSA Weekly Review No.543 June 30, 2023

FSA Weekly Review No.543: June 30, 2023

What’s New on the FSA Website

Week of June 16, 2023 - June 22, 2023

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

Public Comments

June 16, 2023	Publication of the finalized "Cabinet Order to Amend the Cabinet Order on Travel Expenses and Allowances Payable to Witnesses and Expert Witnesses in Trial Procedures, etc. under the Financial Instruments and Exchange Act" alongside the finalized "Cabinet Order to Amend the Cabinet Order on Travel Expenses and Allowances Payable to Witnesses and Expert Witnesses in Trial Procedures of the Certified Public Accountants Act" after public consultation <Summary> The FSA published the finalized "Cabinet Order to Amend the Cabinet Order on Travel Expenses and Allowances Payable to Witnesses and Expert Witnesses in Trial Procedures, etc. under the Financial Instruments and Exchange Act" alongside the finalized "Cabinet Order to Amend the Cabinet Order on Travel Expenses and Allowances Payable to Witnesses and Expert Witnesses in Trial Procedures of the Certified Public Accountants Act" after public consultation. In light of recent changes in economic conditions, and in accordance with the applicable provisions of the "Financial Instruments and Exchange Act" and the "Certified Public Accountants Act," the finalized Cabinet Orders increase the maximum daily allowance to be paid to a witness in a trial procedure pertaining to an administrative monetary penalty payment order from the current 8,050 yen to 8,100 yen and to an expert witness from the current 7,650 yen to 7,700 yen. The finalized Cabinet Orders will be enforced on July 1, 2023. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/news/r4/sonota/20230616/20230616.html

June 16, 2023

Publication of the finalized "Cabinet Order to Amend the Cabinet Order on Travel Expenses and Allowances Payable to Witnesses and Expert Witnesses in Trial Procedures, etc. under the Financial Instruments and Exchange Act" alongside the finalized "Cabinet Order to Amend the Cabinet Order on Travel Expenses and Allowances Payable to Witnesses and Expert Witnesses in Trial Procedures of the Certified Public Accountants Act" after public consultation
<Summary>
The FSA published the finalized "Cabinet Order to Amend the Cabinet Order on Travel Expenses and Allowances Payable to Witnesses and Expert Witnesses in Trial Procedures, etc. under the Financial Instruments and Exchange Act" alongside the finalized "Cabinet Order to Amend the Cabinet Order on Travel Expenses and Allowances Payable to Witnesses and Expert Witnesses in Trial Procedures of the Certified Public Accountants Act" after public consultation.

In light of recent changes in economic conditions, and in accordance with the applicable provisions of the "Financial Instruments and Exchange Act" and the "Certified Public Accountants Act," the finalized Cabinet Orders increase the maximum daily allowance to be paid to a witness in a trial procedure pertaining to an administrative monetary penalty payment order from the current 8,050 yen to 8,100 yen and to an expert witness from the current 7,650 yen to 7,700 yen.
The finalized Cabinet Orders will be enforced on July 1, 2023.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r4/sonota/20230616/20230616.html open new window

Press Releases

Councils

June 21, 2023	Publication of the agenda and handouts of the 17th meeting of the "Expert Panel on Sustainable Finance" <Summary> The FSA published the agenda and handouts of the 17th meeting of the "Expert Panel on Sustainable Finance,"* which was held on June 22, 2023. The secretariat of the expert panel gave a briefing on the (draft) report for a summary of discussions of the expert panel meetings held so far [available only in Japanese] and other relevant (draft) reports, followed by discussions on the respective topics thereof. *The Expert Panel is composed of business, financial, and academic experts with observers of officials from pertinent ministries and agencies. The FSA (Strategy Development Division, Strategy Development and Management Bureau) serves as the secretariat. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/singi/sustainable_finance/siryou/20230622.html
June 16, 2023	Publication of the finalized "Follow-up Guidance on Transition Finance – Towards Better Dialogue with Fundraisers" (provisional English title) [available only in Japanese] after public consultation <Summary> The FSA, METI (Ministry of Economy, Trade and Industry), and MoE (Ministry of the Environment) jointly published the finalized "Follow-up Guidance on Transition Finance – Towards Better Dialogue with Fundraisers" (provisional English title) [available only in Japanese] for financial institutions and investors, based on discussions held by the "Study Group on Environmental Improvement for Effective Transition Finance" (provisional English title) and comments received through public consultation. The finalized Follow-up Guidance focuses on the post-implementation of transition finance, aimed at enhancing efforts and initiatives in line with fundraisers' transition strategies toward decarbonization through post-implementation follow-up by fund providers, thereby summarizing the basic perspectives and points of the follow-up for practical use by practitioners. The finalized Follow-up Guidance took effect on June 16, 2023. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/news/r4/singi/20230616.html

June 21, 2023

Publication of the agenda and handouts of the 17th meeting of the "Expert Panel on Sustainable Finance"
<Summary>
The FSA published the agenda and handouts of the 17th meeting of the "Expert Panel on Sustainable Finance,"* which was held on June 22, 2023.
The secretariat of the expert panel gave a briefing on the

(draft) report for a summary of discussions of the expert panel meetings held so far open new window

[available only in Japanese] and other relevant (draft) reports, followed by discussions on the respective topics thereof.

*The Expert Panel is composed of business, financial, and academic experts with observers of officials from pertinent ministries and agencies. The FSA (Strategy Development Division, Strategy Development and Management Bureau) serves as the secretariat.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/singi/sustainable_finance/siryou/20230622.html open new window

June 16, 2023

Publication of the finalized "Follow-up Guidance on Transition Finance – Towards Better Dialogue with Fundraisers" (provisional English title) [available only in Japanese] after public consultation
<Summary>
The FSA, METI (Ministry of Economy, Trade and Industry), and MoE (Ministry of the Environment) jointly published the finalized PDF

"Follow-up Guidance on Transition Finance – Towards Better Dialogue with Fundraisers" open new window

(provisional English title) [available only in Japanese] for financial institutions and investors, based on discussions held by the "Study Group on Environmental Improvement for Effective Transition Finance" (provisional English title) and comments received through public consultation.
The finalized Follow-up Guidance focuses on the post-implementation of transition finance, aimed at enhancing efforts and initiatives in line with fundraisers' transition strategies toward decarbonization through post-implementation follow-up by fund providers, thereby summarizing the basic perspectives and points of the follow-up for practical use by practitioners.
The finalized Follow-up Guidance took effect on June 16, 2023.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r4/singi/20230616.html open new window

Banks

June 20, 2023	Publication of a progress report on Business Revitalization Plans <Summary> The FSA published a report on the progress of business revitalization by SBI Shinsei Bank, Limited* as of March 31, 2023, pursuant to the "Act on Emergency Measures for Early Strengthening of Financial Functions" and the "Deposit Insurance Act." * This trade name was formerly Shinsei Bank, Ltd., and was changed to SBI Shinsei Bank, Limited on January 4, 2023. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/news/r4/ginkou/20230620/20230620.html
June 16, 2023	Overview of financial results of major insurance companies as of March 31, 2023

June 20, 2023

Publication of a progress report on Business Revitalization Plans
<Summary>
The FSA published a report on the progress of business revitalization by SBI Shinsei Bank, Limited* as of March 31, 2023, pursuant to the "Act on Emergency Measures for Early Strengthening of Financial Functions" and the "Deposit Insurance Act."

* This trade name was formerly Shinsei Bank, Ltd., and was changed to SBI Shinsei Bank, Limited on January 4, 2023.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r4/ginkou/20230620/20230620.html open new window

June 16, 2023

Overview of financial results of major insurance companies as of March 31, 2023

Securities

June 21, 2023	Publication of the list of financial business operators that conducted large-scale OTC derivative transactions in FY 2022 <Summary> The FSA published, complying with the "Cabinet Office Order on Restrictions on Over-the-Counter Derivatives Transactions," the list of financial instruments business operators whose average monthly total notional principal amount of OTC derivative transactions in FY2022 was 300 billion yen or more. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/status/torihikikibo/index.html
June 16, 2023	Administrative action against Ronnaru Forex Co., Ltd. <Summary> The Shikoku Local Finance Bureau took administrative action against Ronnaru Forex Co., Ltd, a financial instruments business operator, ordering the revocation of the entity’s registration pursuant to the "Financial Instruments and Exchange Act" (FIEA). This administrative action was taken in response to the recommendation (as of May 26, 2023) from the Securities and Exchange Surveillance Commission (SESC) for an administrative action against Ronnaru Forex Co., Ltd, which was found to have been in violation of the FIEA, based on results of onsite inspection* conducted by the SESC. * Ronnaru Forex Co., Ltd. was found to have (1) filed false business reports (i.e. "jigyo-hokokusho" in Japanese), etc., (2) fallen below the statutory standards in terms of its net assets and capital adequacy ratio, etc., and (3) failed to have a sufficient personnel structure as well as other necessary systems in place to appropriately conduct Type I financial instruments business. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/news/r4/shouken/20230616/20230616.html

June 21, 2023

Publication of the list of financial business operators that conducted large-scale OTC derivative transactions in FY 2022
<Summary>
The FSA published, complying with the "Cabinet Office Order on Restrictions on Over-the-Counter Derivatives Transactions," the list of financial instruments business operators whose average monthly total notional principal amount of OTC derivative transactions in FY2022 was 300 billion yen or more.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/status/torihikikibo/index.html open new window

June 16, 2023

Administrative action against Ronnaru Forex Co., Ltd.
<Summary>
The Shikoku Local Finance Bureau took administrative action against Ronnaru Forex Co., Ltd, a financial instruments business operator, ordering the revocation of the entity’s registration pursuant to the "Financial Instruments and Exchange Act" (FIEA).
This administrative action was taken in response to the recommendation (as of May 26, 2023) from the Securities and Exchange Surveillance Commission (SESC) for an administrative action against Ronnaru Forex Co., Ltd, which was found to have been in violation of the FIEA, based on results of onsite inspection* conducted by the SESC.

* Ronnaru Forex Co., Ltd. was found to have (1) filed false business reports (i.e. "jigyo-hokokusho" in Japanese), etc., (2) fallen below the statutory standards in terms of its net assets and capital adequacy ratio, etc., and (3) failed to have a sufficient personnel structure as well as other necessary systems in place to appropriately conduct Type I financial instruments business.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r4/shouken/20230616/20230616.html open new window

Others

June 22, 2023	Publication of the list of financial institutions satisfying the certain fill-in requirements of the designated reporting format pertaining to the status of their initiatives and efforts that have been taken so far and are to be taken based on the "Principles for Customer-Oriented Business Conduct" (as of the end of March 2023), and the publication of an analysis report on the common KPIs comparable across investment trust distributors reported by the respective financial institutions on the said list (as of the end of March 2022) <Summary> The FSA updated the list of financial institutions satisfying the certain fill-in requirements of the designated reporting format pertaining to the status of their initiatives and efforts that have been taken so far and are to be taken based on the "Principles for Customer-Oriented Business Conduct" as of the end of March 2023, in order to visualize financial institutions' initiatives and efforts. The FSA aims at encouraging financial institutions to further visualize their customer-oriented business conduct by requesting them to meet the fill-in requirements of the format to report their initiatives and efforts based on the said Principles. The FSA also published an updated trend analysis report on the common KPIs comparable across investment trust distributors reported by the respective financial institutions as of the end of March 2022. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/news/r4/kokyakuhoni/fd_20230622/fd_20230622.html
June 21, 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 list of foreign-based entities). The list also includes 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
June 20, 2023	Publication of a research report on Phase III of the NGFS (Network for Greening the Financial System) scenarios <Summary> In 2022, the FSA conducted a study and published a report, "Study on Climate-related Scenarios Analysis: Characteristics of NGFS Scenarios and their Applications in Climate-related Financial Risk Analysis" (excerpted version in English), summarizing Phase II of the NGFS* scenarios and providing a detailed analysis of key variables, as well as indicating and suggesting points requiring attention in the context of climate change-related risk analysis in Japan. The FSA commissioned Central Research Institute of Electric Power Industry to update the aforementioned study based on Phase III of the NGFS Scenarios published in September 2022 and published the compiled research report [available only in Japanese] on June 20, 2023. *NGFS stands for Network of Central Banks and Supervisors for Greening the Financial System. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/common/about/research/20230620/20230620.html
June 20, 2023	Publication of "Progress Report 2023 for Enhancing Asset Management Business in Japan"
June 16, 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 May 2023. (Available only in Japanese). Common topics across the groups were: - Requests (by the FSA to financial institutions and associations) for financial measures to deal with disasters caused by the earthquake in the Noto region of Ishikawa Prefecture [in 2023] - Draft revisions to the “Discussion Paper on Dialogues and Practices Regarding Financial Institutions’ IT Governance” for consultation (issued by the FSA) - Basic Guidelines for Ensuring Stable Provision of Core Infrastructure Services Based on the Economic Security Promotion Act (provisional English title) - A statement by the Minister of State for Financial Services, SUZUKI Shunichi, at the Council on Economic and Fiscal Policy - "Progress Report on Enhancing Asset Management Business 2023" (published by the FSA), and - Promotion of the use and dissemination of "My Number Card" (personal identification card) [including efforts and initiatives that have been taken in the financial sector to promote the acquisition of "My Number Card"]. Notable issues discussed by most but not all groups were: - Promotion of loans for startups and business establishments that do not ask for personal guarantees from business owners - 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), and - G7 Finance Ministers and Central Bank Governors' meeting held in May 2023. * To enhance the transparency of its administration and to share its awareness of issues in the financial sector in a timely manner, every month the FSA publishes 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 May 2023, opinion exchange meetings were held respectively with the following four groups: major banks, etc.; the Regional Banks Association of Japan and the Second Association of Regional Banks; The National Association of Shinkin Banks; and the Labor banks sector. The original press release is available in Japanese at the following URL: https://www.fsa.go.jp/common/ronten/index.html

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