Financial Services AgencyFSA Weekly Review No.593

July 4, 2024

What’s New on the FSA Website

Week of June 21, 2024 - June 27, 2024

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

Public Comments

June 27, 2024 Publication of draft "Cabinet Orders and Cabinet Office Orders Pertaining to the Amendments to the Financial Instruments and Exchange Act, etc.," and others for public consultation
<Summary>
The FSA has published the draft "Cabinet Orders and Cabinet Office Orders Pertaining to the Amendments to the Financial Instruments and Exchange Act, etc.," and others (hereinafter collectively referred to as the "proposal") for public consultation.
The proposal is mainly intended to provide consequential amendments to the provisions of the said Cabinet Orders and Cabinet Office Orders, etc., in response to the enforcement of the "Act Partially Amending the Financial Instruments and Exchange Act, and Other Acts," which was enacted on November 20, 2023.
In particular, the consequential amendments mainly pertain to the following:

- the development of provisions for the duty of financial business operators, etc. to be sincere and fair to customers, etc., taking into consideration the best interests of customers, etc. in the performance of their services

- a review of analog regulations based on the "Plan for Mass Overhaul of Regulations in Line with Digital Principles" (provisional English title)

- a review of regulations for social lending, etc.

- a review of regulations for security tokens, etc., and

- the duty to post on the Internet ways to publicize the solicitation policies of financial instruments providers, etc.

Public comments will be accepted until 5:00 p.m. [JST], July 27, 2024.

The original press release is available in Japanese.open new window
June 27, 2024 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* (hereinafter collectively referred to as the "proposal") for public consultation. 
The proposal mainly intends to provide necessary amendments to the Comprehensive Guidelines, etc., aimed at promoting consultative support from financial institutions to business owners in terms of M&A (Mergers and Acquisitions), PMI (Post Merger Integration), etc.
Public comments will be accepted until 6:00 p.m. (JST), July 31, 2024. 

*Other relevant and applicable guidelines are as follows:

- Comprehensive Guidelines for Supervision of Major Banks, etc.

- Comprehensive Guidelines for Supervision of Cooperative Financial Institutions (provisional English title), and

- Comprehensive Guidelines for Supervision of Fisheries Cooperatives Engaging in Credit Business (provisional English title).


The original press release is available in Japanese.open new window
June 21, 2024 Publication of the draft amendments to the "Guidelines for Administrative Processes" regarding cryptoasset exchange service providers for public consultation
<Summary>
The FSA proposed the draft amendments to the "Guidelines for Administrative Processes" regarding cryptoasset exchange service providers for public consultation. 
The proposal intends to provide necessary amendments to clarify the scope and applicability of intermediation, etc. for a purchase and sale of cryptoassets, etc. by cryptoasset exchange service providers, etc.
Public comments will be accepted until 5:00 p.m. [JST], July 23, 2023.

The original press release is available in Japanese.open new window
June 21, 2024 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 8,100 yen to 8,200 yen and to an expert witness from the current 7,700 yen to 7,800 yen. 

The finalized Cabinet Orders were enforced on July 1, 2024.

The original press release is available in Japanese.open new window

Press Releases

Policies

June 21, 2024 Public-private initiatives to support new entrants of emerging asset managers (Japanese EMP)

Publication

June 27, 2024 Publication of the list of financial business operators that conducted large-scale OTC derivative transactions in FY 2023
<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 FY2023 was 300 billion yen or more.

The original press release is available in Japanese.open new window
June 27, 2024 Publication of a research report on methodologies for promoting financial and economic education in workplaces, etc.
<Summary>
The FSA commissioned Boston Consulting Group to conduct research aimed at compiling findings (such as suggestions, ideas, and insights) in regard to the roles of and initiatives taken by the Japan Financial and Economic Education Center (J-FLEC) and its stakeholders, and published PDFa research report on methodologies for promotiong financial and economic edcuation in workplaces, etc.open new window (available only in Japanese).

The original press release is available in Japanese.open new window
June 26, 2024 Publication of the assessment report on the FSA's monitoring implementation status from viewpoints of financial institutions based on a series of consultation with financial institutions by a third-party consulting service provider
<Summary>
The FSA sets out in its "JFSA's supervisory approaches" to introduce a third-party assessment of the FSA’s supervisory approaches by experts who are well-versed in business improvement and governance practices for quality improvement in the FSA’s financial administration, such as in respect of working-level supervisory approaches inclusive of monitoring practices.
In this regard, the FSA commissioned Protiviti Inc., a third-party consulting service provider, to conduct the assessment of the FSA’s monitoring practices through a series of consultations with financial institutions, and thereafter published on its website the PDFassessment report on the FSA’s monitoring implementation status from the viewpoints of financial institutionsopen new window, which was compiled by the said consulting service provider.

The original press release is available in Japanese.open new window
June 26, 2024 Publication of an analysis report on financial Institutions' IT system failures
<Summary>
The FSA published an PDFanalysis report on financial institutions' IT system failuresopen new window (available only in Japanese). The report is a compilation of the results of analyses of trends, causes, and countermeasures for system failures based on reports of system failures, etc. received from financial institutions.

The original press release is available in Japanese.open new window
June 25, 2024 Publication of the Research Report, "Study of the Use of the NGFS Scenarios"

Councils

June 27, 2024 Publication of the meeting materials and minutes of twenty-ninth meeting of the Council of Experts Concerning the Follow-up of Japan's Stewardship Code and Japan's Corporate Governance Code which was held on April 18, 2024
June 27, 2024 Publication of the agenda and handouts of the third meeting of the "Working Group on Sustainability Disclosure (Reporting) and Assurance" (provisional English title) of the Financial System Council
<Summary>
The FSA published the agenda and handouts of the third meeting of the "Working Group on Sustainability Disclosure (Reporting) and Assurance" (provisional English title) of the Financial System Council, which was held on June 28, 2024. 
In the third meeting, the secretariat (i.e. the FSA) gave a briefing on the desirable state of the sustainability disclosure standards, and the scope and timing of application of those standards, followed by a discussion among the Working Group members.

The original press release is available in Japanese.open new window
June 26, 2024 Publication of the agenda and handouts of the 66th Meeting of the Financial Service ADR (Alternative Dispute Resolution) Liaison Group
<Summary>
The FSA published the agenda and handouts of the 66th Meeting of the Financial Service ADR (Alternative Dispute Resolution) Liaison Group, which was held on June 27, 2024. 
In the 66th meeting, the FSA presented the implementation status of the service operations rendered by each of the designated alternative dispute resolution (ADR) organizations in FY 2023.

The original press release is available in Japanese.open new window
June 25, 2024 Publication of the agenda and handouts of the third meeting of the "Expert Panel on Venture Capital (VC) Funds"
<Summary>
The FSA published the agenda and handouts of the third meeting of the "Expert Panel on Venture Capital (VC) Funds,"* which was held on June 26, 2024.
 

*The Expert Panel is composed of business, financial, and academic experts, with observers from financial associations, and others. The FSA serves as the secretariat.


The original press release is available in Japanese.open new window
June 25, 2024 Publication of a report for a summary of discussions of the meetings held by the "Expert Panel on Structural Issues and Competition in the Non-Life Insurance Sector" (provisional English title)
<Summary>
The FSA published  a report for PDFa summary of discussions of the meetings held from March through June 2024 by the "Expert Panel on Structural Issues and Competition in the Non-Life Insurance Sector"open new window (provisional English title) [available only in Japanese]. 
The report was compiled from the perspective of ensuring customer-oriented business conduct across the non-life insurance business sector and achieving a healthy competitive environment in Japan's non-life insurance market.

The original press release is available in Japanese.open new window
June 21, 2024 The third meeting of the Working Group on Disclosure and Assurance of Sustainability-related Financial Information (of the Financial System Council)

Banks

June 27, 2024 Publication of a reference casebook of financial institutions' initiatives to further promote lending practices that do not rely on personal guarantee provided by business owners in response to "Reform Program regarding Personal Guarantee Provided by Business Owners" (provisional English title)
<Summary>
The FSA compiled and published PDFa reference casebook of financial institutions' initiatives to further promote lending practices that do not rely on personal guarantee provided by business owners in response to "Reform Program* regarding Personal Guarantee Provided by Business Owners" (provisional English title)open new window (available only in Japanese).

The FSA expects that the reference casebook will serve as a reference for financial institutions in considering various approaches and will further accelerate the establishment of lending practices that do not rely on management guarantees, as well as the use of the "Guidelines for Personal Guarantee Provided by Business Owners." 
 

*The Reform Program was published in December 2022, aimed at further accelerating the establishment of lending practices that do not rely on personal guarantee provided by business owners.


Note: The reference case book is based on materials filed by financial institutions, where the evaluations for the initiatives therein reflect the views of the financial institutions that prepared the materials and do not represent the views of the FSA.

The original press release is available in Japanese.open new window
June 27, 2024 Publication of a statistical report on financing for enterprises by financial institutions in the private sector utilizing the "Guidelines for Personal Guarantee Provided by Business Owners"
<Summary>
The FSA published a statistical report on financing for enterprises by financial institutions in the private sector utilizing the "Guidelines for Personal Guarantee Provided by Business Owners." The report reflects the period between October 1, 2023, and March 31, 2024. (The report is regularly published to further promote the utilization of the Guidelines)

The original press release is available in Japanese.open new window
June 25, 2024 Report on the measures for the resolution of failed financial institutions
<Summary>
The FSA submitted to the National Diet a report (FRC [Financial Reconstruction Commission] report) on measures for the resolution of failed financial institutions pursuant to the "Act on Emergency Measures for the Revitalization of the Financial Functions." The report covers developments between October 1, 2023, and March 31, 2024.

The original press release is available in Japanese.open new window
June 25, 2024 Publication of statistics regarding unlawful reimbursement of deposits (as of the end of March 2024)
<Summary>
The FSA published statistics regarding unlawful reimbursement of deposits caused by counterfeit and stolen cash cards, stolen deposit books, unlawful Internet banking activities and linked services. 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.open new window

Securities

June 24, 2024 Administrative Actions, etc. against Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., Morgan Stanley MUFG Securities Co., Ltd. and MUFG Bank, Ltd.
June 21, 2024 Administrative action against JAPAN Co., Ltd. 
<Summary>
The Tokai Local Finance Bureau took administrative action against JAPAN Co., Ltd. (hereinafter referred to as "the entity"), a type II financial instruments business operator and an investment advisory and agency business operator, ordering the revocation of the entity's registration and the improvement of its business operations pursuant to the "Financial Instruments and Exchange Act" (FIEA).
The administrative action was taken based on facts found to be in violation of the FIEA, such as where the entity failed to file reports in response to the order by the Bureau, and failed to file mandatory business reports ("jigyo-hokokusho" in Japanese). (Details of the administrative action are available only in Japanese on the webpage of the Bureauopen new window).

The original press release is available in Japanese.open new window

Others

June 21, 2024 Establishment of telephone consultation services for corporate borrowers regarding initiatives taken by financial institutions in the private and public sector aimed at forward-looking management improvement and business turnaround, not limited to financial (cash management) support
<Summary>
The FSA’s Counseling Office for Financial Service Users has established telephone consultation services to respond to inquiries and/or consultation requests from corporate borrowers regarding initiatives taken by financial institutions in the private and public sector aimed at forward-looking management improvement and business turnaround, not limited to financial (cash management) support.
The telephone consultation services also accept consultations requiring cooperation with relevant ministries and agencies, such as consultations on installment payments of public taxes and public charges (e.g. social insurance premiums).

The original press release is available in Japanese.open new window
June 21, 2024 "REVICareer Ambassadors" commissioned by Regional Economy Vitalization Corporation of Japan (REVIC)
<Summary>
The FSA announced that Regional Economy Vitalization Corporation of Japan (REVIC), which implements and manages the FSA-subsidized project* for matching human resources for regional corporate management, has appointed two experts as "REVICareer** Ambassadors" aimed at publicizing and promoting REVICareer, a human resources database of REVIC to encourage matching of human resources to support the management of regional businesses.

*The FSA has been promoting the 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.

** "REVICareer"open new window  is designed to match employees of major companies seeking to work for regional companies with regional financial institutions that have identified the need to hire management personnel from small and medium-sized companies. "REVICareer" has a registration web-form for individual employees and officers of major companies.


The original press release is available in Japanese.open new window
June 21, 2024 Publication of new tutorial videos in regard to sustainability-related disclosure, aimed at further enhancement of corporate disclosure of narrative information
<Summary>
The FSA published new tutorial videos in regard to sustainability-related disclosure, etc., pertaining to the compilation of disclosure practices for reference in responding to issues regarding sustainability disclosures, etc., and to the FY 2023 edition of the reference casebook of good practices on the disclosure of narrative information, aimed at further enhancement of corporate disclosure of narrative information.
The newly added videos are available (in Japanese) on YouTube (The FSA Channel).open new window

The original press release is available in Japanese.open new window
June 21, 2024 Updated questionnaire to be filled out by applicants for registration as cryptoasset exchange service providers
<Summary>
From the perspective of requiring financial institutions (including cryptoasset exchange service providers) that fall within the regulatory purview of the FSA to check the implementation status of the points required by the "Guidelines for Anti-Money Laundering and Combating the Financing of Terrorism" prior to the commencement of businesses, the FSA has updated the questionnaire to be filled out by applicants subject to the screening process for applications for registration as cryptoasset exchange service providers.

The original press release is available in Japanese.open new window

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