What’s New on the FSA Website

Week of June 25, 2021 - July 1, 2021

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

Press Conferences

June 25, 2021	Press Conference by the Minister of State for Financial Services (June 15, 2021) Japanese version

Public Comments

(The following public comments are available in Japanese)

June 30, 2021	Publication of the finalized "Cabinet Office Order to Amend the Detailed Regulations on the Mutual Loan Business Act" and the finalized amendments to the "Comprehensive Guidelines for Supervision of Major Banks, etc." and others <Summary> The FSA finalized the "Cabinet Office Order to Amend the Detailed Regulations on the Mutual Loan Business Act" and finalized the amendments to the "Comprehensive Guidelines for Supervision of Major Banks, etc." and others. The amendments mainly provide technical amendments to the relevant applicable Cabinet Office Orders and Guidelines, including the aforementioned, which are under the purview of the FSA, in order to renew certain procedures regarding paperwork, seals, and in-person meetings in the private sector and between the public and private sectors. The finalized Cabinet Office Order and the finalized amendments to the aforementioned Guidelines were enforced on June 30, 2021. (The relevant and applicable Cabinet Office Order and Order will be enforced on November 1, 2021, and the application to the corresponding provisions in the "Comprehensive Guidelines for Supervision of Financial Instruments Business Operators" will be implemented in due course shortly after the relevant Cabinet Orders are prepared.)
June 30, 2021	Publication of the "Cabinet Office Order to Amend the Cabinet Office Order on Financial Instruments Business, etc. and the Cabinet Office Order on Transactions under Article 161-2 of the Financial Instruments and Exchange Act and Deposits Related Thereto" <Summary> The FSA proposed the "Cabinet Office Order to Amend the Cabinet Office Order on Financial Instruments Business, etc. and the Cabinet Office Order on Transactions under Article 161-2 of the Financial Instruments and Exchange Act and Deposits Related Thereto." The proposal mainly intends to enhance the accountability of financial services providers to publicize and explain to financial services users the risks pertaining to leveraged ETFs and others, such as a possible large discrepancy between the volatility of the underlying (base) index and the leveraged index over the medium to long term. The proposal also intends to increase guarantee rates on margin deposits.
June 30, 2021	Publication of the finalized amendments to the "Cabinet Office Order on Financial Instruments Business, etc." <Summary> The FSA published the finalized amendments to the "Cabinet Office Order on Financial Instruments Business, etc." The amendments mainly relax firewall regulations on sharing foreign corporate clients' non-public information, etc. within a financial group, in response to the recommendation made in the first report published by the "Working Group on Capital Market Regulations" (provisional English title) of the Financial System Council in December 2020. The amendments were enforced on June 30, 2021.
June 30, 2021	Publication of the finalized amendments to the regulatory notice pertaining to the standard policy reserve system <Summary> The FSA finalized the amendments to the regulatory notice and others pertaining to the standard policy reserve system. While foreign currency-denominated insurance policies are currently excluded from the scope of the standard policy reserve system, in light of the increase in the amount of said insurance policies in force over the past few years, the amendments update the scope of insurance policies subject to the standard policy reserve system by including therein the said foreign currency-denominated insurance policies from the perspective of creating a sound competitive environment in the insurance business sector. The amendments to the said regulatory notice and others took effect on June 30, 2021, whereas the amendments to the other relevant and applicable regulatory notice and to the "Comprehensive Guidelines for Supervision of Insurance Companies," etc. will respectively take effect on April 1, 2022, and October 1, 2021.
June 30, 2021	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) <Summary> The FSA proposed the draft amendments to the "Points to Note on Disclosure of Corporate Affairs, etc. (Guidelines for Disclosure of Corporate Affairs, etc.)" (provisional English title). The proposal mainly intends to further clarify the priority screening subjects and the screening procedures in regard to securities registration statements for private offerings.
June 30, 2021	Publication of the draft amendments to the "Audit Quality Control Review Standards" (exposure draft) <Summary> The FSA announced that the Audit Committee of the Business Accounting Council (BAC) published the draft amendments to the "Audit Quality Control Review Standards" (exposure draft). The proposal mainly intends to update the conventional audit quality control system in which predefined audit quality control policies and procedures are formulated and managed, to a new audit quality control system in which audit quality control risks are more proactively identified and addressed, whereby the cycle to improve the audit quality control system is effectively deployed within an audit firm.
June 25, 2021	Publication of the finalized "Cabinet Office Order to Amend the Cabinet Office Order on the Audit Certification of Financial Statements" <Summary> The FSA finalized the "Cabinet Office Order to Amend the Cabinet Office Order on the Audit Certification of Financial Statements." The amendments mainly reflect the amendments made to the Auditing Standards in regard to "other information"* by the Business Accounting Council during its plenary meeting held on November 16, 2020. In particular, the amendments clarify procedures auditors should take in regard to "other information," thereby requiring auditors to refer to that matter in the auditor's report (such as when there is a material misstatement of "other information"). The amendments were enforced on June 25, 2021.   * Other information in this context means financial and/or non-financial information included in disclosure documents, such as annual securities reports (except financial statements and auditor's reports).
June 25, 2021	Publication of the draft "Principles for Model Risk Management" <Summary> The FSA published the draft "Principles for Model Risk Management" (provisional English title). The proposal intends to clarify the FSA's approach to model risk management, thereby catalyzing further development of the model risk management practices in the industry.

 

Press Releases

(The following press releases are available in English)

Banks

June 30, 2021	FSA updated Information on COVID-19 (Novel Coronavirus)

Publication

June 30, 2021	FSA publishes English translation of monthly magazine, Access FSA No.214

Others

June 30, 2021	Updated statistics of money lending business
June 28, 2021	Updated list of issuers of gift certificates in repayment procedures based on the ’Payment Services Act’

(The following press releases are available in Japanese)

Councils

June 30, 2021	Publication of the agenda and handouts of the fourth meeting of the "Working Group on Social Bonds" <Summary> The FSA published the agenda and handouts of the fourth meeting of the "Working Group on Social Bonds" which was held on June 30, 2021.
June 30, 2021	Appointment of the Business Accounting Council's committee members <Summary> The Business Accounting Council’s committee members were appointed by the FSA's Commissioner.

Banks

June 30, 2021	Publication of a statistical report on financing by financial institutions for enterprises utilizing the "Guidelines for Personal Guarantee Provided by Business Owners" <Summary> The FSA published a statistical report on financing by financial institutions for enterprises utilizing the "Guidelines for Personal Guarantee Provided by Business Owners." The report reflects the period between October 1, 2020 and March 31, 2021. (The report is regularly published to further promote the utilization of the Guidelines).
June 30, 2021	Overview of modifications to lending conditions by financial institutions <Summary> The FSA published an overview of modifications to lending conditions made by  financial institutions for the period from March 10, 2020, to May 31, 2021. * The majority of the data reflects the data until May 31, 2021, whereas the data of cooperative financial institutions reflects the data until March 31, 2021.
June 29, 2021	Publication of statistics regarding unlawful reimbursement of deposits (as of the end of March 2021) <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.
June 29, 2021	Publication of a progress report on Business Revitalization Plans <Summary> The FSA published a report on the progress of business revitalization by Shinsei Bank Ltd. as of March 31, 2021, pursuant to the "Act on Emergency Measures for Early Strengthening of Financial Functions" and the "Deposit Insurance Act."
June 28, 2021	Approval granted to The Senshu Ikeda Bank, Ltd. for its engagement in trust business <Summary> The FSA granted approval to The Senshu Ikeda Bank, Ltd. for its engagement in trust business pursuant to the "Act on Engagement in Trust Business by a Financial Institution."

Securities

June 30, 2021	Administrative action against Kabushiki Kaisha Root and Partners,* a notifier of specially permitted business for qualified institutional investors (SPBQII) which failed to file the mandatory business reports to the authorities (The Kanto Local Finance Bureau) <Summary> The Kanto Local Finance Bureau took an administrative action against Kabushiki Kaisha Root and Partners,* a notifier of specially permitted business for qualified institutional investors (SPBQII) which failed to file the mandatory business reports with the Kanto Local Finance Bureau, ordering the improvement of the notifier's business operation pursuant to the "Financial Instruments and Exchange Act. * As this corporation has no English corporate name, the Romanized version of the Japanese corporate name is stated here.
June 30, 2021	Publication of a warning against potential risks of leveraged ETFs, inverse ETFs, and others <Summary> The FSA alerted investors by warning against potential risks in investing in leveraged ETFs, inverse ETFs, and others to the effect that those have risk profiles such as a possible large discrepancy between the volatility of the underlying (base) index and the leveraged index over the medium to long term.
June 25, 2021	Administrative action against Sigma Capital Ltd, a notifier of specially permitted business for qualified institutional investors (SPBQII) which was operating Type II financial instruments business and investment management business without proper registration (The Kanto Local Finance Bureau) <Summary> The Kanto Local Finance Bureau took an administrative action against Sigma Capital Ltd, a notifier of specially permitted business for qualified institutional investors (SPBQII) which was operating Type II financial instruments business and investment management business without proper registration. The Bureau consequently ordered the improvement of the notifier's business operation pursuant to the "Financial Instruments and Exchange Act.
June 25, 2021	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 a warning to an entity that is operating financial instruments business without proper registration. (See the updated list of Japan-based entities *). * This list also includes the warned non-registered entities with untraceable/unidentified addresses.

Insurance

June 30, 2021

Updated one-stop access* to relevant information on prudential policies, including an economic value-based solvency regulatory framework (mainly for insurance companies) <Summary> The FSA has updated the one-stop access* to the relevant information on prudential policies, including an economic value-based solvency regulatory framework (mainly for insurance companies). The updates mainly pertain to the information on the status of discussions so far made, in which the FSA has been working on the key points of contention in designing an economic value-based solvency regulatory framework through the analysis of the results of domestic field tests and dialogues with insurance companies and other stakeholders.   * The one-stop access mainly shares information pertaining to the FSA's "Advisory Council on Economic Value-Based Framework,"** field test results in respect of economic value-based assessment and monitoring methodologies, and survey reports (outsourced to external parties). ** The Advisory Council was established to seek directions for the future introduction of an economic value-based solvency framework for insurance companies in Japan, while also taking into account global developments on the matter. The Advisory Council consists of academics and practitioners with relevant expertise and perspectives.

Others

June 30, 2021	Publication of the updated "Detailed Regulations on Procedures for Prior-Confirmation of the Application of Laws and Regulations Within the Purview of the Financial Services Agency" (provisional English title) <Summary> The FSA has updated the "Detailed Regulations on Procedures for Prior Confirmation of the Application of Laws and Regulations Within the Purview of the Financial Services Agency" (provisional English title). The updates mainly allow procedures of application with the FSA via means other than paper-based means, effective June 30, 2021, while the FSA is working on necessary reforms in terms of paper-based application, seal-requests/requirements, and in-person procedures between private corporations and between the FSA and citizens, business operators or others. In this context, communications through fax machines will be no longer available from the perspective of promoting teleworking and improving operational efficiency within the FSA.
June 30, 2021	Publication of a report on trends in high-speed trading activities <Summary> The FSA has published a report on trends in high-speed trading activities including the number of orders placed by high-speed traders and trading values thereof. The data report will be updated on a quarterly basis. The FSA has been promoting registration of high-speed traders as well as assessing the actual status of high-speed trading activities ever since the registration system was introduced for those who engage in high-speed trading of stocks and others, following the amendments to the "Financial Instruments and Exchange Act" in May 2017 (effective 2018).
June 30, 2021	Publication of the results of an outsourced survey report* on the current status and the case analysis of "zero trust" <Summary> The FSA has published the results of an outsourced survey report* on the current status and the case analysis of "zero trust."** The survey was outsourced to PricewaterhouseCoopers Aarata LLC, so that the survey results may contribute to the promotion of security measures to be taken by financial institutions and serve as reference for monitoring and other purposes.   * The survey report is available only in Japanese. ** "Zero trust" is a concept that ensures cyber security by constantly monitoring the terminal communications and access to information assets by employees, regardless of whether they are inside or outside the network. (With the progress of digitalization, financial institutions are also increasingly using cloud platforms and sharing data with outsourced companies, where security measures premised on intrusion, rather than the traditional (obsolete) perimeter-based network defense, are gaining attention.)
June 30, 2021	Publication of the level of remuneration paid to the officers of the authorized corporations <Summary> The FSA published the level of remuneration paid to the officers of the authorized corporations under its jurisdiction: Deposit Insurance Corporation of Japan, and Banks’ Shareholdings Purchase Corporation. Such information is subject to disclosure on an annual basis by respective competent government agencies and is required to be presented on the format designated by the Ministry of Internal Affairs and Communications.
June 29, 2021	New one-stop access to the relevant information on financial policies for the acceptance of and realization of a symbiotic relationship with foreign nationals domiciled in Japan <Summary> The FSA has added a subpage to its website to provide one-stop access to the relevant information on financial policies for the acceptance of and realization of a symbiotic relationship with foreign nationals domiciled in Japan, by publishing a list of key matters that deposit-taking financial institutions providing savings accounts and remittance services should take into account when responding to foreign nationals as financial services users domiciled in Japan. The FSA has also published practices and initiatives taken by the respective financial institutions in serving such foreign nationals.
June 25, 2021	Warning issued to Binance Holdings Limited that is operating the crypto-asset (virtual currency) exchange business without proper registration <Summary> The FSA issued a warning to Binance Holdings Limited that is operating crypto-asset (virtual currency) exchange business without proper registration in violation of the "Payment Services Act."