Financial Services AgencyFSA Weekly Review No.564

November 30, 2023

What’s New on the FSA Website

Week of November 17, 2023 - November 23, 2023

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

Public Comments

November 21, 2023 Finalization of the Revised  Draft of “Guidelines for Creating, Recordkeeping and Reporting of Transaction Information specified in Article 4(1) of the Cabinet Office Order on the Regulation of Over-the-Counter Derivatives Transactions, etc.”
November 17, 2023 Publication of the finalized amendments to the "Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc." after public consultation
<Summary>
The FSA finalized the amendments to the "Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc." after public consultation.
The finalized amendments mainly provide consequential amendments to the Guidelines in terms of regulating acts of solicitation for churning  conducted by financial institutions using Nippon Individual Savings Account (NISA)'s "Growth Investment Quota,"* thereby setting forth supervisory responses based on laws and regulations.
The finalized amendments will take effect on January 1, 2024.

*"Growth Investment Quota" is a quota available for investment in listed stocks.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/shouken/20231117-2/20231117-2.htmlopen new window
November 17, 2023 Publication of the finalized amendments to the "Guidelines for Administrative Processes" regarding crypto-asset exchange service providers and to the "Comprehensive Guidelines for Supervision of Trust Companies, etc." (provisional English title) after public consultation
<Summary>
The FSA finalized the amendments to the "Guidelines for Administrative Processes" regarding crypto-asset exchange service providers and to the "Comprehensive Guidelines for Supervision of Trust Companies, etc." (provisional English title for the Comprehensive Guidelines) after public consultation. 
 
The finalized amendments mainly set forth the following in the Guidelines:
-  Disclosure of information by a crypto-asset exchange service provider, etc. when it has a parent company located abroad, and responses to be taken by the competent supervisory authority in terms of on- and off-site inspection and monitoring thereof, and
-  Measures required to be taken by a crypto-asset exchange service provider, etc. when the crypto-asset exchange service provider, etc. provides services using a common crypto-asset trading system and/or a common administrative system for the custody of users' assets with its parent company, etc.
 
The finalized amendments took effect on November 17, 2023.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/sonota/20231117/20231117.htmlopen new window

Press Releases

Councils

November 22, 2023 Publication of the agenda and handouts of the jointly held meeting: the 25th meeting of the "Working Group on Capital Market Regulations" (provisional English title) of the Financial System Council and of the fourth meeting of the "Asset Management Task Force" (provisional English title) of the said Council
<Summary>
The FSA published the agenda and handouts of the 25th meeting of the "Working Group on Capital Market Regulations" of the Financial System Council, and of the fourth meeting of the "Asset Management Task Force" (provisional English titles), which were jointly held on November 22, 2023. 
The Working Group members and the Task Force members engaged in discussion mainly in regard to the (draft) report for a summary of discussions of the said Working Group and the Task Force.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/singi/singi_kinyu/market-system/siryou/20231122.htmlopen new window


Publication

November 22, 2023 PDFFSA publishes English translation of monthly magazine, Access FSA No.241


Banks

November 22, 2023 Publication of the revised "Basic Perspectives of 'Guidelines for Personal Guarantee Provided by Business Owners' in the Event of the Closure of a Business" (provisional English title)
<Summary>
The FSA published the revised "Basic Perspectives of 'Guidelines for Personal Guarantee Provided by Business Owners' in the Event of the Closure of a Business" (provisional English title) compiled by the study group on the said guidelines.
The revision is intended to clarify that early commencement of business discontinuance procedures may possibly contribute to an increase in the residual assets of guarantors from the perspective of further instilling awareness of the importance of early consultation when a business owner intends to close the business.
It is expected that this basic perspective will be further shared among principal obligors (debtors)/guarantors, eligible obligees, and professionals involved in the liquidation of guarantee obligations, thereby encouraging early consultation when a business owner seeks to close the business and contributing to the smooth liquidation of guarantee obligations.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/ginkou/20231122.htmlopen new window
November 17, 2023 Publication of the Results of the Survey on Introduction of the Guardianship Support Deposits and Guardianship Support Trusts
<Summary>
The FSA published the Results of the Survey on Introduction of the Guardianship Support Deposits and Guardianship Support Trusts. The survey results reflect the data compiled as of March 31, 2023.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/ginkou/20231117/20231117.htmlopen new window

Others

November 22, 2023 “Launching Japan’s Impact Consortium” Announced
November 22, 2023 Event titled "New NISA x Future Production - About Money, Investment, and the Future (in terms of household asset building)" [provisional English title] hosted by the FSA
<Summary>
The FSA will hold an event titled "New NISA x Future Production - About Money, Investment, and the Future (in terms of household asset building)" [provisional English title], in a series of three sessions on Monday, December 18, 2023, Wednesday, January 17, 2024 and Tuesday, February 20, 2024, to promote to the wider public the "New NISA (Nippon Individual Savings Account, a tax exemption program for small investment)" [scheduled to be introduced in January 2024], where the NISA system will be made permanent.*

* Under the New NISA system, annual investment caps will be expanded and the tax-exempt holding period will be made indefinite. 

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/sonota/20231122-2.htmlopen new window
November 22, 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 lists of EXCELJapan-based entitiesopen new window  and EXCELforeign-based entitiesopen new window ).
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 at the following URL:
https://www.fsa.go.jp/ordinary/chuui/mutouroku.htmlopen new window
November 21, 2023 Enactment of bills to partially amend the "Financial Instruments and Exchange Act," etc. and to partially amend the "Act on Book-Entry Transfer of Corporate Bonds and Shares," etc. to respond to changes in the environment involving advances in information technology (provisional English law title for the latter Act), which were respectively submitted by the FSA to the 211st Diet session
<Summary>
The FSA announced that the following bills submitted to the 211st Diet session on March 14, 2023, were enacted on November 20, 2023:
- the bill to partially amend the "Financial Instruments and Exchange Act," etc., and
- the bill to partially amend the "Act on Book-Entry Transfer of Corporate Bonds and Shares," etc. to respond to changes in the environment involving advances in information technology (provisional English law title).
 
The former bill is mainly intended to provide the following measures to increase convenience for and protection of financial service customers, etc.:
1. 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
2. the establishment of an organization to further promote financial and economic education in Japan, particularly in terms of enhancing financial literacy among the public, and
3. the abolition and/or revision of the system for filing quarterly securities reports.
Meanwhile, the latter bill is mainly intended to take measures for revising the book-entry transfer system to shorten the timeframe of listing for start-ups, etc., so as to ensure the efficiency and invigoration/resilience of the capital market.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/common/diet/212/index.htmlopen new window
November 17, 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 October 2023. (Available only in Japanese).
 
The Common topic across the groups was:
- Semi-annual follow-up questionnaire with the respective financial institutions to ascertain the development status of their risk management systems for AML/CFT (Anti-Money Laundering and Combating the Financing of Terrorism).
 
Notable issues discussed by most but not all groups were:
- Public relations regarding AML (Anti-Money Laundering) measures, etc.
- Monitoring policy across the financial sector and other relevant sectors, etc., 
- Publication of "The JFSA Strategic Priorities July 2023-June 2024," and
- Initiatives and efforts to promote Japan as a leading Asset Management Center.
 
* 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 2023, opinion exchange meetings were held respectively with the following eight groups: major banks, etc.; the Regional Banks Association of Japan and the Second Association of Regional Banks; The National Association of Shinkin Banks; Trust Companies Association of Japan; the Japan Investment Advisers Association; The Financial Futures Association of Japan; Japan Financial Services Association; and Japan Virtual and Crypto assets Exchange Association.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/common/ronten/index.htmlopen new window
November 17, 2023 New web portal for information on economic security measures to be taken in the financial sector
<Summary>
On November 16, 2023, the FSA designated the specified social infrastructure providers and other related entities (hereinafter referred to as "business operators") that are subject to the "Regulatory System for Ensuring Stable Provision of Specified Social Infrastructure Services" [provisional English title], a core infrastructure system, which is scheduled to be implemented on May 17, 2024 under the "Act on the Promotion of Ensuring Economic Security Through Implementation of Integrated Economic Measures" (i.e. the "Economic Security Promotion Act" [provisional English title]), whereby it publically announced such business operators, etc. on November 17, 2023.  
In this regard, the FSA newly launched a web portal for information on economic security measures to be taken under the said Act in the financial sector, whereby it added "Answers to Frequently Asked Questions Regarding the 'Regulatory System for Ensuring Stable Provision of Specified Social Infrastructure Services'" (provisional English title) [available only in Japanese] to the web portal to contribute to the smooth implementation of the said regulatory system.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/economicsecurity/231117infrastructure.htmlopen new window
November 17, 2023 Outline of the "Report on the Measures for the Resolution of Failed Financial Institutions" (FRC Report) delivered by the Minister of State for Financial Services, SUZUKI Shunichi, in the Committee on Financial Affairs of the House of Representatives
<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" (FRC Report) in the Committee on Financial Affairs of the House of Representatives. The report, addressing the semiannual period extending from October 1, 2022, to March 31, 2023, had been submitted to the Diet on June 27, 2023, 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/051117/20231117.htmlopen new window

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