FSA Weekly Review No.488 May 12, 2022

FSA Weekly Review No.488: May 12, 2022

What’s New on the FSA Website

Week of April 22, 2022 - May 5, 2022

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

Press Conferences

May 2, 2022	Press Conference by the Minister of State for Financial Services (March 25, 2022)

Public Comments

April 28, 2022	Publication of the finalized "Cabinet Office Order to Amend the Ordinance for Enforcement of the Insurance Business Act" after public consultation <Summary> The FSA has published the finalized "Cabinet Office Order to Amend the Ordinance for Enforcement of the Insurance Business Act" after public consultation. The finalized Cabinet Office Order provides amendments to the said Ordinance for Enforcement and other relevant and applicable Cabinet Office Orders and Comprehensive Guidelines for Supervision, in accordance with the partial enforcement of the "Act Partially Amending the Banking Act, etc., Aimed at Revitalizing the Japanese Economy and Fostering the Enhancement of Regional Banks' Sustainability of Business Models" (Act No.46 of May 26, 2021)* (provisional English law title). In particular, the finalized Cabinet Office Order expressly sets forth that cooling-off requests from customers (policyholders) can also be processed/handled through electromagnetic records (data) in addition to the pertinent paper-based means. The finalized Cabinet Office Order was enforced on May 9, 2022. * This Act comes into force as of the day specified by Cabinet Order within a period not exceeding one year from the date of promulgation. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r3/shouken/20220428/20220428.html
April 28, 2022	Publication of the draft "Cabinet Order to Amend the Order for Enforcement of the Banking Act, etc." and the draft "Cabinet Office Order to Amend the Regulation for Enforcement of the Banking Act, etc." for public consultation <Summary> The FSA published the draft "Cabinet Order to Amend the Order for Enforcement of the Banking Act, etc." and the draft "Cabinet Office Order to Amend the Regulation for Enforcement of the Banking Act, etc." for public consultation. The proposal mainly intends to provide amendments in response to requests for deregulation from the financial sector and relevant industry organizations, particularly in regard to the following: - Procedures to approve holidays and temporary closures of banks, etc. (proposal to amend the "Order for Enforcement of the Banking Act" as well as the Regulation for Enforcement of the Banking Act"), and - Filing procedures for notification by (trust agreement) agencies of financial institutions concurrently engaged in trust business (proposal to amend the "Regulation for Enforcement of the Act on Engagement in Trust Business by Financial Institutions"). The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r3/ginkou/20220428/20220428.html
April 28, 2022	Publication of the finalized amendments to the regulatory notices pertaining to Pillar 1 and Pillar 3 requirements of capital adequacy after public consultation <Summary> The FSA finalized the amendments to the regulatory notices pertaining to Pillar 1 and Pillar 3 requirements of capital adequacy after public consultation (conducted in March, September, and October 2021) to implement the finalized Basel III. The implementation dates of the regulatory notices in conjunction with the finalization of the Basel III framework are scheduled as follows: - Internationally active financial institutions and non-internationally active financial institutions that use internal model-based approaches for measuring risks: March 31, 2024 - Non-internationally active financial institutions that do not use internal model-based approaches for measuring risks: March 31, 2025 - Financial institutions that desire an early implementation on or after March 31, 2023, may do so by submitting a notification to the FSA. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r3/ginkou/20220428.html
April 28, 2022	Publication of the draft amendments to the regulatory notice designating recipients of provided information where the provision of information constitutes high-speed trading for public consultation <Summary> The FSA has published the draft amendments to the regulatory notice designating recipients (destination) of provided information where the provision of information constitutes high-speed trading for public consultation. The proposal mainly intends to add Osaka Digital Exchange Co., Ltd. to the list of recipients of provided information where the provision of information constitutes high-speed trading, pursuant to the provisions of Article 26 (1) of the "Cabinet Office Order on Definitions under Article 2 of the Financial Instruments and Exchange Act." Public comments will be accepted until 6:00 p.m. (JST), May 29, 2022. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r3/shouken/20220428-2/20220428-2.html
April 28, 2022	Publication of the draft "Cabinet Office Order to Amend the Cabinet Office Order on Financial Instruments Business, etc." for public consultation <Summary> The FSA published the draft "Cabinet Office Order to Amend the Cabinet Office Order on Financial Instruments Business, etc." for public consultation. The proposal mainly intends to review the procedures regarding exemptions to the prohibition of financial instruments business operators and so forth from compensating for losses (where losses are attributed to accidents), such as by changing the base amount for reporting to a competent Local Finance Bureau from 100,000 yen or less to one million yen or less. Public comments will be accepted until 5:00 p.m. (JST), May 30, 2022. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r3/shouken/20220428-3/20220428-3.html
April 27, 2022	Publication of the draft amendments to the regulatory notice determining amounts to be used for the calculation of policy reserves of non-life insurance companies, etc. pursuant to the provision of Article 70, paragraph (4), etc. of the "Regulation for Enforcement of the Insurance Business Act"(the Ministry of Finance Regulatory Notice No.232, 1998) and to the regulatory notice specifying methods and standards regarding accumulation and reduction of policy reserves of small amount and short term insurance companies pursuant to the provisions of Article 211-46 of the "Regulation for Enforcement of the Insurance Business Act" (The Financial Services Agency Regulatory Notice No. 16, 2006) for public consultation <Summary> The FSA proposed the draft amendments to the regulatory notice determining amounts to be used for the calculation of policy reserves of non-life insurance companies, etc. pursuant to the provision of Article 70, paragraph (4), etc. of the "Regulation for Enforcement of the Insurance Business Act" (the Ministry of Finance Regulatory Notice No.232, 1998) and to the regulatory notice specifying methods and standards regarding accumulation and reduction of policy reserves of small amount and short term insurance companies pursuant to the provisions of Article 211-46 of the "Regulation for Enforcement of the Insurance Business Act" (the Financial Services Agency Regulatory Notice No. 16, 2006) for public consultation. In accordance with the amendments to the "Order for Enforcement of the Act on Special Measures Concerning Taxation," the proposal intends to split and regroup (reclassify) the insurance type group "fire, freight, and transportation," which is currently stipulated under the "current regulatory notices," into three groups, namely, "fire," "freight and transportation," and "liability for damages," to ensure consistency with the treatment of the extraordinary contingency reserve system under the "Act on Special Measures Concerning Taxation." The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r3/hoken/20220427/20220427.html
April 27, 2022	Publication of the draft "Cabinet Office Order to Amend the Cabinet Office Order on Restrictions on Over-the-Counter Derivatives Transactions, etc." and the draft regulatory notice specifying cases concerning other inevitable grounds for not being able to provide trade information, such as data on centrally and/or non-centrally cleared trades, etc., pursuant to provisions of Article 3-2, item (iv) and Article 7-2, item (iv) of the "Cabinet Office Order on Restrictions on Over-the-Counter Derivatives Transactions, etc." for public consultation <Summary> The FSA proposed the draft "Cabinet Office Order to Amend the Cabinet Office Order on Restrictions on Over-the-Counter Derivatives Transactions, etc." and the draft regulatory notice specifying cases concerning other inevitable grounds for not being able to provide trade information, such as data on centrally and/or non-centrally cleared trades, etc., pursuant to the provisions of Article 3-2, item (iv) and Article 7-2, item (iv) of the "Cabinet Office Order on Restrictions on Over-the-Counter Derivatives Transactions, etc." for public consultation. The proposal mainly intends to enhance the preservation and reporting items under the system of OTC derivatives transaction information to enable international data aggregation. Public comments will be accepted until 5:00 p.m. (JST), May30, 2022. Note: The proposal is based on publications by the Committee on Payments and Market Infrastructures under the BIS (Bank for International Settlements), namely, "Harmonisation of critical OTC derivatives data elements (other than UTI and UPI)," "Harmonisation of the Unique Product Identifier," and "Harmonisation of the Unique Transaction Identifier." The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r3/shouken/20220427/20220427.html
April 25, 2022	Publication of the draft "Supervisory Guidance on Climate-related Risk Management and Client Engagement" for public consultation (Public consultation will remain open until May 26, 2022) <Summary> The FSA published the draft "Supervisory Guidance on Climate-related Risk Management and Client Engagement" for public consultation in response to the recommendations prescribed in a report published by the Expert Panel on Sustainable Finance in June 2021. This guidance documents viewpoints of supervisory dialogues regarding financial institutions' (hereinafter referred to as "FIs"') climate-related risk management and FIs' engagement with their clients to support the clients’ responses to climate-related opportunities and risks, including possible approaches and case examples of client engagement. This guidance is non-binding and serves as a baseline for supervisory dialogues between the FSA and FIs to promote better practices at FIs. Public comments will be accepted until 05:00 p.m. (JST), May 26, 2022. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r3/ginkou/20220425/20220425.html
April 22, 2022	Publication of the draft amendments to "Comprehensive Guidelines for Supervision of Financial Instruments Business Operators," "Guidelines for Supervision of Credit Rating Agencies," and "Guidelines for Supervision of High Speed Traders" for public consultation <Summary> The FSA proposed the draft amendments to "Comprehensive Guidelines for Supervision of Financial Instruments Business Operators," "Guidelines for Supervision of Credit Rating Agencies," and "Guidelines for Supervision of High Speed Traders" for public consultation. The proposal mainly intends to expressly set forth in the said guidelines to conduct an interview/hearing with a financial instruments business operator (hereinafter referred to as a "FIBO"), taking into account the actual status of its business operations from the perspective of ascertaining the appropriateness of business operations, in cases where a FIBO has undergone a material change in its shareholder composition due to a business acquisition/merger, or has suspended business operations for an extended period of time, etc. Public comments will be accepted until 05:00 p.m. (JST), May 23, 2022. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r3/shouken/20220422-2/20220422-2.html
April 22, 2022	Publication of the finalized "Cabinet Office Order to Amend the Cabinet Office Order on Financial Instruments Business, etc." after public consultation <Summary> The FSA published the finalized "Cabinet Office Order to Amend the Cabinet Office Order on Financial Instruments Business, etc." after public consultation. The amendments were made in response to the recommendation made in the second report published by the "Working Group on Capital Market Regulations" (provisional English title) of the Financial System Council in June 2021, in regard to the relaxation of firewall regulations on sharing corporate clients' non-public information held by a listed company, etc. With respect to non-public information, etc. of the subject corporation, such as a listed company, etc., in regard to the transfer of information between a financial instruments business operator and a bank or any other financial institution that is in a parent-subsidiary relationship, etc., the amendments mainly set forth that the consent of the said corporation shall not be required, while certain measures shall be taken to respond to a request for suspension of the transfer of information, etc. The finalized Cabinet Office Order alongside the amendments to the relevant and applicable comprehensive guidelines for supervision and Q&As will either be enforced or take effect on June 22, 2022. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r3/shouken/20220422/20220422.html

Press Releases

Councils

April 25, 2022	Publication of the agenda and handouts of the 11th meeting of the "Expert Panel on Sustainable Finance" <Summary> The FSA published the agenda and handouts of the 11th meeting of the "Expert Panel on Sustainable Finance," which was held online on April 25, 2022. The Expert Panel* members at the 11th meeting discussed topics, such as circumstances concerning public offering of ESG-related investment trusts, and the draft consultative document "Supervisory Guidance on Climate-related Risk Management and Client Engagement." *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/20220425.html
April 22, 2022	Publication of the agenda and handouts of the fifth meeting of the "Technical Committee for ESG Rating and Data Providers, etc." <Summary> The FSA published the agenda and handouts of the fifth meeting of the "Technical Committee for ESG Rating and Data Providers, etc.,"* which was held on April 11, 2022. The committee members discussed the basic perspectives for the compilation of a summary report based on previous discussions. * This Technical Committee has been established under the "Expert Panel on Sustainable Finance" to aggregate a wide range of information on green bonds, etc., as well as ESG (Environmental Social and Governance) rating and data providers. The Committee is composed of practitioners, market participants, and academics who are involved in ESG assessment and data provision, along 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/esg_hyouka/siryou/20220411.html
April 22, 2022	Publication of the agenda and handouts of the 17th meeting of the "Working Group on Capital Market Regulations" (provisional English title) of the Financial System Council <Summary> The FSA published the agenda and handouts of the 17th meeting of the "Working Group on Capital Market Regulations" (provisional English title) of the Financial System Council, which was held on April 25, 2022. The working group members discussed issues regarding the enhancement of information provision to customers and promotion of digitalization, as well as initiatives to ensure the effective functioning of corporate bond markets, based on the following two topics: - Ensuring of customer-oriented business conduct and improvement of financial services (enhancement of information provision to customers and promotion of digitalization), and - Challenges and initiatives concerning corporate bond markets in Japan. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/singi/singi_kinyu/market-system/siryou/20220425.html

Banks

April 28, 2022	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 March 31, 2022. *The majority of the data reflects the data until March 31, 2022, whereas the data of cooperative financial institutions reflects the data until December 31, 2021. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/ordinary/coronavirus202001/kashitsuke/20200430.html
April 26, 2022	Request to Japan Federation of Bar Associations to instill favorable practices of liquidation of guarantee obligations based on "Basic Perspectives of 'Guidelines for Personal Guarantee Provided by Business Owners' in the Event of the Closure of a Business" (provisional English title) <Summary> On April 25, 2022, the FSA requested Japan Federation of Bar Associations to instill good (desirable) practices of liquidation of guarantee obligations in attorneys and other legal service providers based on "Basic Perspectives of 'Guidelines for Personal Guarantee Provided by Business Owners' in the Event of the Closure of a Business"* (provisional English title) which was published in March 2022. *The basic perspectives of the guidelines are expected to serve as an aid to the understanding of principal obligors (debtors)/guarantors, applicable obligees (creditors), and professionals/practitioners involved in the liquidation of guarantee obligations, whereas the guidelines are expected to be widely utilized by SMEs, managers, and financial institutions, thereby contributing to the development of the overall Japanese economy. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r3/ginkou/20220426.html
April 26, 2022	Outline of the "Report on the Measures for the Resolution of Failed Financial Institutions" delivered by the Minister of State for Financial Services, SUZUKI Shunichi, in the Committee on Financial Affairs of the House of Councillors <Summary> The Minister of State for Financial Services, SUZUKI Shunichi, delivered an outline of the "Report on the Measures for the Resolution of Failed Financial Institutions" in the Committee on Financial Affairs of the House of Councillors. The report, addressing the semiannual period extending from April 1, 2020 to September 30, 2020, had been submitted to the Diet December 11, 2020, pursuant to the "Act on Emergency Measures for the Revitalization of the Financial Functions." The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/common/diet/houkoku/040426/20220426.html

Securities

April 27, 2022	Administrative penalty charge against an individual (a non-insider/retail investor) for commiting insider trading regarding stocks of Oncolys BioPharma Inc. by using insider information received from an employee of the entity <Summary> On April 26, 2022, the FSA issued an order to impose an administrative penalty charge against an individual (a non-insider/retail investor) for committing insider trading regarding stocks of Oncolys BioPharma Inc. by using information received from an employee of the entity, in violation of the "Financial Instruments and Exchange Act." The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r3/shouken/20220426-1.html
April 27, 2022	Administrative penalty charge against a foreign-domiciled individual for committing insider trading regarding stocks of Remixpoint, inc. by using insider information learned as an officer of the contractor of a subsidiary of Remixpoint, inc. <Summary> On April 26, 2022, the FSA issued an order to impose an administrative penalty charge against a foreign domiciled individual for committing insider trading regarding stocks of Mitsui DM Sugar Holdings Co., Ltd. by using information learned as an officer of the contractor (contracting party) of a subsidiary of Remixpoint, inc., in violation of the "Financial Instruments and Exchange Act." The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r3/shouken/20220426-2.html
April 27, 2022	Administrative penalty charge against GRACE TECHNOLOGY, INC. for making false statements in its securities reports <Summary> On April 26, 2022, the FSA issued an order to impose an administrative penalty charge against GRACE TECHNOLOGY, INC. for making false statements in its securities reports in violation of the "Financial Instruments and Exchange Act." The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r3/shouken/20220426-3.html
April 22, 2022	Change of the amount of the administrative monetary penalty charged against NISSAN MOTOR CO., LTD. for making false statements in its securities reports <Summary> On April 26, 2022, the FSA changed the amount of the administrative monetary penalty charged against NISSAN MOTOR CO., LTD. for making false statements in its securities reports in violation of the "Financial Instruments and Exchange Act." The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r3/shouken/20220426-4.html

Others

April 28, 2022	Nationwide campaign of "Problem Gambling Awareness Week" <Summary> In regard to the nationwide campaign of "Problem Gambling Awareness Week," which is held from May 14 to 20 every year, the FSA has updated its one-stop webpage displaying information on the campaign. The Awareness Week is an annual key initiative in which the FSA and the relevant parties across the nation take various approaches and efforts to further raise public awareness of the adverse impact* of problem gambling and provide relevant information, including the consultative services** for those in need of help for prevention of and recovery from such gambling harm. * For example, problem gamblers can precipitate financial and other difficulties for themselves and the people around them. ** Advisory services are available at each region’s permanent point of contact for consultations on multi-debt. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/policy/kashikin/gambling/20220514.html
April 27, 2022	Updated statistics of money lending business
April 26, 2022	Warning with respect to the recent developments that call for implementation of cybersecurity measures at financial institutions, particularly for the period in and around the national holiday-studded golden week in 2022 <Summary> On April 25, 2022, the FSA urged financial institutions to implement cyber security measures for the period in and around the national holiday-studded golden week in 2022,* in light of the recent surge in potential threats of cyber-attacks. In addition, the FSA reminded financial institutions to promptly report to the FSA or the Local Finance Bureaus in the event of a cyber-attack. *The national holiday-studded golden week in 2022 refers to the period from April 29 to May 8, 2022. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/news/r3/cyber/0425oshirase.html
April 22, 2022	Publication of a video of a speech by the Commissioner of the FSA, NAKAJIMA Junichi, at the 13th SAAJ International Seminar <Summary> The FSA published on its webpage a video of the speech by the Commissioner of the FSA, NAKAJIMA Junichi, at the 13th SAAJ International Seminar, "The Asset Management Industry toward a Net Zero Carbon Society in 2050," held on March 25, 2022. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/common/conference/danwa/index_kouen.html#Commissioner
April 22, 2022	Survey on the investment performance of asset managers in the U.S and Europe <Summary> Following the survey conducted last year, the FSA commissioned Ibbotson Associates Japan, Inc. to conduct a survey on the investment performance of asset managers in the U.S and Europe as of the end of 2021. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/common/about/research/20220421_1.html
April 22, 2022	Survey on the investment performance of asset managers in Japan <Summary> Following the survey conducted last year, the FSA commissioned QUICK Corp. to conduct a survey of key performance indicators (KPI) that show the investment performance of asset managers in Japan as of the end of 2021. The original press release is available in Japanese at the following URL. https://www.fsa.go.jp/common/about/research/20220421_2.html

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