FSA Weekly Review No.614 December 5, 2024

FSA Weekly Review No.614: December 5, 2024

What’s New on the FSA Website

Week of November 22, 2024 - November 28, 2024

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

Press Conferences

November 28, 2024	Press Conference by the Minister of State for Financial Services (November 15, 2024)
November 25, 2024	Press Conference by the Minister of State for Financial Services (November 12, 2024)
November 25, 2024	Press Conference by the Minister of State for Financial Services (November 8, 2024)

Public Comments

November 26, 2024	Publication of the draft amendments to the "Cabinet Office Order on Disclosure of Corporate Affairs" (in regard to corporate disclosure on cross-shareholdings), etc. for public consultation <Summary> The FSA proposed the draft amendments to the "Cabinet Office Order on Disclosure of Corporate Affairs" and to "Points to Note on Disclosure of Corporate Affairs, etc. (i.e. Guidelines for Disclosure of Corporate Affairs, etc.)" [provisional English title] (hereinafter collectively referred to as the "proposal" or the "Cabinet Office Order and the Guidelines") for public consultation. The proposal is mainly intended to amend the said Cabinet Office Order pertaining to the disclosure of "shareholdings" in an annual securities report and a securities registration statement,* and to clarify the notion of shareholdings for "pure investment (net investment) purposes" in the said Guidelines based on the responses to previous public consultations, etc. * In particular, the proposal is intended to request disclosure of the following regarding shares (limited to those held at the end of the current fiscal year) whose purpose of holding has been changed from cross-shareholding to pure investment within the last five fiscal years including the current fiscal year: - The issue - Share units - Amounts recorded on the balance sheet - The year in which the purpose of shareholding changed, and - The reason for changing the purpose of shareholding and policy on holding or selling shares after the change. Public comments will be accepted until 6:30 p.m. (JST), December 26, 2024 The original press release is available in Japanese.
November 26, 2024	Publication of the draft "Cabinet Order to Amend the Order for Enforcement of the Financial Instruments and Exchange Act" and others for public consultation <Summary> The FSA published the draft "Cabinet Order to Amend the Order for Enforcement of the Financial Instruments and Exchange Act" and others (hereinafter collectively referred to as the "proposal") for public consultation. The proposal is mainly intended to develop the relevant and applicable Cabinet Orders, etc. in order to encourage financing for startups, etc. and the provision of various investment products according to the risk-bearing capacity of investors, in order to: 1. review disclosure regulations in terms of: (1) revising disclosure regulations pertaining to stock-based compensation (2) enhancing the scope of information to be provided in private placements to professional investors via the Internet, and (3) simplifying the content of disclosure in securities registration statements for small-amount offerings. 2. review the business scope of type-I small amount electronic public offering service, etc., and 3. ease the prohibition on acquisition of own investment equity by investment corporations, etc. Public comments will be accepted until 5:00 p.m. (JST), December 26, 2024. The original press release is available in Japanese.
November 22, 2024	Publication of the finalized amendments to "Points to Note for the Financial Instruments and Exchange Act (FIEA), etc." (i.e. "Guidelines for the FIEA, etc.) [provisional English title], and others after public consultation <Summary> The FSA finalized the amendments to the following after public consultation: - "Points to Note for the Financial Instruments and Exchange Act (FIEA), etc." (i.e. "Guidelines for the FIEA, etc.") [provisional English title] - "Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.," and - "Guidelines for Administrative Processes" regarding cryptoasset exchange service providers and intermediaries of so-called stablecoins. The finalized amendments mainly clarify cases, where it may be considered illegal for a person who is not registered as a financial instruments business operator (FIBO), a cryptoasset exchange service provider, or an intermediary of so-called stable coins, etc., to place false advertisements, etc. on the Internet. The finalized amendments are in conjunction with the "Holistic Measures to Protect the Public from Fraud" (provisional English title) [available only in Japanese], published by the Ministerial Meeting Concerning Measures against Crime under the Prime Minister's Office of Japan, which set out the need to "clarify that the posting of false advertisements by an unregistered FIBO, etc. can be considered an act of illegal financial instruments business" as part of the measures against false advertisements that lead to fraudulent investment websites. The finalized amendments took effect on 22 November, 2024. The original press release is available in Japanese.

Press Releases

Policies

November 26, 2024	Publication of an ex-ante valuation report based on regulatory impact analysis (RIA) in regard to the easing of disclosure regulations for stock compensation <Summary> The FSA published an ex-ante evaluation report based on regulatory impact analysis (RIA)* in regard to the easing of disclosure regulations for stock compensation pursuant to the "Government Policy Evaluations Act." *RIA is a methodology aimed at improving the objectivity and transparency of regulations by objectively analyzing the impact of the introduction or revision of regulations in respect of the expected implementation costs and effects, etc., and by disclosing the results. In this regard, competition assessment estimates and evaluates the impact on the competitive status based on the benefits and burdens incurred by the establishment, revision, or abolition of a regulation. The original press release is available in Japanese.

November 26, 2024

Publication of an ex-ante valuation report based on regulatory impact analysis (RIA) in regard to the easing of disclosure regulations for stock compensation
<Summary>
The FSA published an ex-ante evaluation report based on regulatory impact analysis (RIA)* in regard to the easing of disclosure regulations for stock compensation pursuant to the "Government Policy Evaluations Act."

*RIA is a methodology aimed at improving the objectivity and transparency of regulations by objectively analyzing the impact of the introduction or revision of regulations in respect of the expected implementation costs and effects, etc., and by disclosing the results. In this regard, competition assessment estimates and evaluates the impact on the competitive status based on the benefits and burdens incurred by the establishment, revision, or abolition of a regulation.

The original press release is available in Japanese.

International

November 26, 2024	Selection of new Vice-Chair of the OECD Corporate Governance Committee <Summary> The FSA announced that the OECD Corporate Governance Committee elected MIYOSHI Toshiyuki, Vice Commissioner for International Affairs at the FSA, as its new Vice-Chair on November 14, 2024. His term will begin on January 1, 2025. The original press release is available in Japanese.

Councils

November 26, 2024	Publication of the agenda, handouts, and an outline of proceedings of the third meeting of the "Study Group on Deposit-taking Institutions' Response to Post-Quantum Cryptography" (provisional English title), as well as the "Report of the Study Group on Deposit-taking Institutions' Response to Post-Quantum Cryptography" (provisional English report title) <Summary> The FSA published the agenda, handouts, and an outline of proceedings of the third meeting of the "Study Group on Deposit-taking Institutions' Response to Post-Quantum Cryptography" (provisional English title), which was held on October 18, 2024. In this context, the FSA published the "Report of the Study Group on Deposit-taking Institutions' Response to Post-Quantum Cryptography [PQC]" (provisional English report title) [available only in Japanese], a summary of discussions of the meetings (mainly on the topics of recommendations, issues and considerations when considering transitioning to PQC) held from July to October 2024 by the Study Group. The original press releases are available in Japanese.(1)(2)(3)
November 25, 2024	The fifth meeting of the Working Group on Disclosure and Assurance of Sustainability-related Financial Information (of the Financial System Council)

November 26, 2024

Publication of the agenda, handouts, and an outline of proceedings of the third meeting of the "Study Group on Deposit-taking Institutions' Response to Post-Quantum Cryptography" (provisional English title), as well as the "Report of the Study Group on Deposit-taking Institutions' Response to Post-Quantum Cryptography" (provisional English report title)
<Summary>
The FSA published the agenda, handouts, and an outline of proceedings of the third meeting of the "Study Group on Deposit-taking Institutions' Response to Post-Quantum Cryptography" (provisional English title), which was held on October 18, 2024.
In this context, the FSA published the PDF

"Report of the Study Group on Deposit-taking Institutions' Response to Post-Quantum Cryptography [PQC]" open new window

(provisional English report title) [available only in Japanese], a summary of discussions of the meetings (mainly on the topics of recommendations, issues and considerations when considering transitioning to PQC) held from July to October 2024 by the Study Group.

The original press releases are available in Japanese.(1

)(2

)(3

)

November 25, 2024

The fifth meeting of the Working Group on Disclosure and Assurance of Sustainability-related Financial Information (of the Financial System Council)

Banks

November 28, 2024	Overview of modifications to lending conditions by financial institutions <Summary> The FSA published an overview of modifications to lending conditions made by cooperative financial institutions for the period from March 10, 2020 to September 30, 2024. The original press release is available in Japanese.
November 28, 2024	Requests for the promotion of providing business support for business operators and the facilitation of financing for corporate borrowers as well as the publication of a request for the facilitation of financing for business operators (corporate borrowers) in response to "Comprehensive Economic Measures to Foster Citizens' Safety and Security and Sustained Economic Growth" published by the Cabinet Office <Summary> On November 28, 2024, the FSA held a meeting between government officials and representatives from financial associations and institutions (hereinafter collectively referred to as [FIs]), attended by KATO Katsunobu, Minister of Finance and Minister of State for Financial Services, to exchange views on encouraging FIs to extend tailored business support to corporate borrowers in terms of management improvement and business revitalization and on the facilitation of financing for corporate borrowers during the fiscal-year-end season and further beyond, whereby on the same day, the government (including the Cabinet Office and relevant Ministries) issued a request statement to FIs to ensure the facilitation of financing for business operators (corporate borrowers) in accordance with "Comprehensive Economic Measures to Foster Citizens' Safety and Security and Sustained Economic Growth" published by the Cabinet Office. While many business operators are still facing difficult cash flow conditions with tight borrowing constraints due to global price hikes, labor shortages, and other factors, the FIs were requested to ensure providing cash management support for business operators (corporate borrowers), especially given the increasing demand for operating funds and other resources toward the fiscal-year-end season, and to work closely with business operators (corporate borrowers) by providing tailored support measures in terms of business management improvement, business turnaround, and renewed efforts in a forward-looking manner without putting them off, considering that business operators face increasingly diverse business challenges. The original press release is available in Japanese.(1)(2)

November 28, 2024

Overview of modifications to lending conditions by financial institutions
<Summary>
The FSA published an overview of modifications to lending conditions made by cooperative financial institutions for the period from March 10, 2020 to September 30, 2024.

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

November 28, 2024

Requests for the promotion of providing business support for business operators and the facilitation of financing for corporate borrowers as well as the publication of a request for the facilitation of financing for business operators (corporate borrowers) in response to "Comprehensive Economic Measures to Foster Citizens' Safety and Security and Sustained Economic Growth" published by the Cabinet Office
<Summary>
On November 28, 2024, the FSA held a meeting between government officials and representatives from financial associations and institutions (hereinafter collectively referred to as [FIs]), attended by KATO Katsunobu, Minister of Finance and Minister of State for Financial Services, to exchange views on encouraging FIs to extend tailored business support to corporate borrowers in terms of management improvement and business revitalization and on the facilitation of financing for corporate borrowers during the fiscal-year-end season and further beyond, whereby on the same day, the government (including the Cabinet Office and relevant Ministries) issued a request statement to FIs to ensure the facilitation of financing for business operators (corporate borrowers) in accordance with "Comprehensive Economic Measures to Foster Citizens' Safety and Security and Sustained Economic Growth" published by the Cabinet Office.
While many business operators are still facing difficult cash flow conditions with tight borrowing constraints due to global price hikes, labor shortages, and other factors, the FIs were requested to ensure providing cash management support for business operators (corporate borrowers), especially given the increasing demand for operating funds and other resources toward the fiscal-year-end season, and to work closely with business operators (corporate borrowers) by providing tailored support measures in terms of business management improvement, business turnaround, and renewed efforts in a forward-looking manner without putting them off, considering that business operators face increasingly diverse business challenges.

The original press release is available in Japanese.(1

)(2

)

Others

November 27, 2024	Updated lists 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.
November 26, 2024	Activities of the FSA's Counseling Office for Financial Services Users for the period between July 1 and September 30, 2024 <Summary> The FSA's Counseling Office for Financial Services Users offers a counseling service to respond to inquiries and comments from financial services users. Between July 1 and September 30, 2024, the counseling office received 11,591 inquiries and comments, a slight decrease from 11,878 cases in the previous quarter (between April 1 and June 30, 2024). The original press release is available in Japanese.
November 22, 2024	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 in October 2024 with relevant associations in the financial sector. (Available only in Japanese). Notable issues discussed by most of the groups were: - 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" - "Guidelines for Cybersecurity in the Financial Sector" (provisional English title) - enhancement of risk management for outside contractors/vendors regarding the services outsourced by financial institutions - "The JFSA (Financial Services Agency) Strategic Priorities July 2024-June 2025" - the future cessation of Euroyen TIBOR (Tokyo Internet Offered Rate) - the FSA's call for participation in a questionnaire survey on the status of use of AI (Artificial Intelligence) by financial institutions, etc. - Japan Weeks, and - initiatives for sustainable finance. * 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 October 2024, opinion exchange meetings were held respectively with the following six groups: major banks, etc.; the Regional Banks Association of Japan and the Second Association of Regional Banks; Trust Companies Association of Japan; the Japan Investment Advisers Association; The Financial Futures Association of Japan; and Japan Financial Services Association. The original press release is available in Japanese.
November 22, 2024	Administrative action against SOH Audit Corporation <Summary> The FSA took an administrative action against SOH Audit Corporation, ordering the improvement of its business management structure pursuant to the "Certified Public Accountants Act" (Act No.103 of 1948). 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.
November 22, 2024	Publication of statistics regarding over-the-counter (OTC) derivative transactions (as of March 31, 2024)

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