Financial Services AgencyFSA Weekly Review No.569

January 12, 2024

What’s New on the FSA Website

Week of December 22, 2023 - January 4, 2024

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

Public Comments

December 27, 2023 Publication of the finalized amendments to the "Regulation for Enforcement of the Act on the Advancement of Government Administration Processes That Use Information and Communications Technology Pertaining to the Finance-Related Laws and Regulations That Fall Under the Jurisdiction of the Cabinet Office" (provisional English title) and others after public consultation
<Summary>
The FSA finalized the amendments to the "Regulation for Enforcement of the Act on the Advancement of Government Administration Processes That Use Information and Communications Technology Pertaining to the Finance-Related Laws and Regulations That Fall Under the Jurisdiction of the Cabinet Office" (provisional English title), and others after public consultation.
In line with the government-wide efforts and measures to conform to digital principles for administration procedures, the finalized amendments mainly provide reasonable and necessary amendments to the relevant and applicable Cabinet Office Orders, etc. that fall under the jurisdiction of the FSA in terms of the following: 
- Updating rules/provisions for designating recording media, such as floppy disks, and
- Developing rules/provisions on the use of cloud services, etc.
The finalized amendments were enforced on December 27, 2023.

The original press releases are available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/sonota/20231227/20231227.htmlopen new window
December 27, 2023 Publication of the finalized amendments to the "regulatory notice pertaining to Pillar 1 and Pillar 3 requirements of capital adequacy" after public consultation
<Summary>
The FSA finalized the amendments to the "regulatory notice pertaining to Pillar 1 and Pillar 3 requirements of capital adequacy" after public consultation.
The finalized amendments mainly provide necessary amendments to the regulatory notice pertaining to the finalized Basel III framework* to reflect the content of the document titled "Technical Amendment – Finalisation of various technical amendments" published by the Basel Committee on Banking Supervision in November 2023, etc.
The finalized amendments will take effect on March 31, 2024.

*The finalized Basel III framework refers to a consolidated package of the "Basel III frameworkopen new window"  (December 2017) and the "market risk capital framework (minimum capital requirements for market riskopen new window)"  (January 2019). 

The original press releases are available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/ginkou/20231227.htmlopen new window
December 26, 2023 Publication of the finalized amendments to the "Points to Note on Disclosure of Corporate Affairs, etc. (Guidelines for Disclosure of Corporate Affairs, etc.)" (provisional English title) after public consultation
<Summary>
The FSA finalized the amendments to the "Points to Note on Disclosure of Corporate Affairs, etc. (Guidelines for Disclosure of Corporate Affairs, etc.)" (provisional English title) after public consultation. 
When an issuing company offers or sells securities with a total value of 100 million yen or more, it must file a securities registration statement to the authorities. Meanwhile, there is a special provision that does not require an issuing company to file a securities registration statement for shares issued as stock-based compensation to directors and employees, provided that the issuing company concludes with its directors and employees an agreement restricting share transfer. 
The finalized amendments to the said Guidelines clarify that the said special provision is applicable even in the case where an issuing company has a provision in its stock-based compensation rule, etc. to lift the restriction on the transfer of shares upon the occurrence of unforeseen events, such as the following: (i) retirement or resignation of the director due to death or other justifiable causes, or (ii) restructuring of the organization of the issuing company, whereby the requirements for the transfer-restricted period shall be considered satisfied, and the filing of a securities registration statement is not required.
The finalized amendments took effect on December 26, 2023.

The original press releases are available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/sonota/20231226/20231226.htmlopen new window
December 22, 2023 Publication of the finalized "Handling Guidelines for Business Operators that Fall within the Purview of the FSA to Eliminate Discrimination against People with Disabilities" and the finalized "Handling Directions for the FSA Officials to Eliminate Discrimination against People with Disabilities" [provisional English titles] after public consultation
<Summary>
The FSA published the finalized "Handling Guidelines for Business Operators that Fall within the Purview of the FSA to Eliminate Discrimination against People with Disabilities"(hereinafter referred to as the "Handling Guidelines") and the finalized " Handling Directions for the FSA Officials to Eliminate Discrimination against People with Disabilities" (hereinafter referred to as the "Handling Directions") [provisional English titles] after public consultation.
The finalized Handling Guidelines and Handling Directions are compiled in response to the Cabinet decision (as of March 14, 2023) for the enforcement of the "Act on Partially Amending the Act for Eliminating Discrimination against Persons with Disabilities" [Act No. 56 of 2021] (enforcement scheduled on April 1, 2024), which is mainly aimed at making it mandatory for business operators to provide reasonable accommodation for people with disabilities in terms of accessibility, inclusivity, etc. 
The finalized Handling Guidelines and Handling Directions will be enforced on April 1, 2024.

The original press releases are available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/sonota/20231222-5/20231222.htmlopen new window
December 22, 2023 Publication of the finalized amendments to the "Cabinet Office Order on Disclosure of Corporate Affairs" and other relevant and applicable cabinet office orders (in regard to important contracts) after public consultation
<Summary>
The FSA finalized the amendments to the "Cabinet Office Order on Disclosure of Corporate Affairs" and other relevant and applicable cabinet office orders after public consultation. 
In response to the recommendation in the summary report of the "Working Group on Corporate Disclosure" (FY 2021) of the Financial System Council published in June 2022 to develop a regulatory framework mainly for "disclosure of corporate initiatives regarding sustainability" and "disclosure of corporate governance," the finalized amendments provide amendments to the narrative information to be filled out in the Annual Securities Report and Securities Registration Statement, as well as the Extraordinary Report.
The finalized amendments will be enforced on April 1, 2024.

The original press releases are available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/sonota/20231222-4/20231222.htmlopen new window
December 22, 2023 Publication of the draft amendments to the “Comprehensive Guidelines for Supervision of Major Banks, etc." and the “Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.” for public consultation
<Summary>
The FSA proposed the draft amendments to the “Comprehensive Guidelines for Supervision of Major Banks, etc." and the “Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.” (hereinafter the "proposal") for public consultation. 
The proposal, built upon the progress made in the discussion at the Financial Stability Board, is intended to set out the purpose and principles of valuation and testing exercise toward ensuring smooth implementation of orderly resolution, as well as clarifying capabilities that financial institutions should have in place.
Public comments will be accepted until 6:00 p.m. [JST], February 2, 2024.

The original press releases are available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/sonota/20231222-3/20231222.htmlopen new window

Press Releases

Policies

December 22, 2023 Publication of the "Key FSA-Related Items in the Outline for the FY 2024 Tax Reform"
<Summary>
Based on the cabinet decision made on December 22, 2023, in regard to the outline for the FY 2024 Tax Reform, the FSA published the  "PDFKey FSA-Related Items in the Outline for the FY 2024 Tax Reformopen new window" (available only in Japanese).

The original press releases are available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/sonota/20231222-7/20231222.htmlopen new window
December 22, 2023 Publication of the request for budget, organization, and staff for FY 2024 (draft)
<Summary>
The FSA published a PDF(draft) overview of the request for budget, organization, and staff for FY 2024open new window(available only in Japanese).

The original press releases are available in Japanese at the following URL:
https://www.fsa.go.jp/common/budget/yosan/6youkyuu-4.htmlopen new window

Publication

December 27, 2023 Publication of the FSA Annual Report for program year 2022 (July 2022 - June 2023)
<Summary>
The FSA published the FSA Annual Report for program year 2022 (July 2022 - June 2023) [available only in Japanese]. It covers the FSA's overall policies including its mission, organization, and measures including amendments of regulations and supervisory actions.

The original press releases are available in Japanese at the following URL:
https://www.fsa.go.jp/common/paper/2022/index.htmlopen new window
December 27, 2023 Publication of the FY 2023 edition of the reference casebook of good practices on the disclosure of narrative information, mainly in regard to perspectives and initiatives for corporate sustainability
<Summary>
The FSA has been publishing a series of reference casebooks of good practices on the disclosure of narrative information to encourage corporate initiatives to accumulate and instill good practices toward the enhancement of disclosure of narrative information. 
The FSA has newly published the FY 2023 edition of the reference casebook of good practices on the disclosure of narrative information, a compilation of good practices in the disclosure of corporate sustainability*-related concepts and initiatives disclosed in annual reports, including the following:
- "Overall Requirements"
- "Climate Change-related Issues, etc." 
- "Human Capital and Diversity" 
- "Human Rights," and 
- "Other specifics."
 
The FY 2023 edition of the reference casebook has been compiled by the "Study Group for Collecting Good Practices on Corporate Disclosure of Narrative Information Based on the Principles Regarding the Disclosure of Narrative Information,"** and it shares the latest collection of favorable practices on the disclosure of narrative information mainly in terms of corporate sustainability. (Updates to the casebook are made as deemed necessary).
 
* Corporate disclosure of sustainability information is a key corporate disclosure element that has been gaining focus and interest in society lately. Relevant initiatives to enhance corporate disclosure of sustainability information are encouraged through amendments to the Corporate Governance Code and other measures.
** The Study Group is to bring investors, analysts, experts, and representatives from listed companies together to update the reference casebook.

The original press releases are available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/singi/20231227.htmlopen new window
December 27, 2023 PDFFSA publishes English translation of monthly magazine, Access FSA No.242

Banks

December 27, 2023 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 November 30, 2023.
* The majority of the data reflects the data until November 30, 2023, whereas the data of cooperative financial institutions reflects the data until September 30, 2023.

The original press releases are available in Japanese at the following URL:
https://www.fsa.go.jp/ordinary/coronavirus202001/kashitsuke/20200430.htmlopen new window
December 26, 2023 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 April 1 and September 30, 2023. (The report is regularly published to further promote the utilization of the Guidelines).

The original press releases are available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/ginkou/20231226-2.htmlopen new window
December 22, 2023 Publication of a progress report on Business Revitalization Plans
<Summary>
The FSA published a report on the progress of business revitalization by SBI Shinsei Bank, Limited* as of September 30, 2023, pursuant to the "Act on Emergency Measures for Early Strengthening of Financial Functions" and the "Deposit Insurance Act."
*This trade name was formerly Shinsei Bank, Ltd., and was changed to SBI Shinsei Bank, Limited on January 4, 2023.

The original press releases are available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/ginkou/20231222/20231222.htmlopen new window
December 22, 2023 Publication of the amendments to the “Order on the Special Provisions for the Duties of Deposit Insurance Corporation of Japan (DICJ) pertaining to the enforcement of the Act on Utilization of Dormant Deposits to promote Public Interest Activities by the Private Sector”
<Summary>
The FSA published the amendments to the “Order on the Special Provisions for the Duties of Deposit Insurance Corporation of Japan (DICJ) pertaining to the enforcement of the Act on Utilization of Dormant Deposits to promote Public Interest Activities by the Private Sector.” 
While the grants (funded by dormant deposits, etc.) from DICJ to JANPIA (Japan Network for Public Interest Activities) [an organization designated to utilize dormant deposits] are currently provided after the settlement of accounts every year, the amendments additionally allow the provision of grants within a certain limit from April to June.
The amendments were enforced on December 22, 2023.
 
Note: No public consultation was conducted, for the amendments fall under cases prescribed in the "Administrative Procedures Act" as being insignificantly changed and not requiring the implementation of procedures for public consultation, such as administrative orders, etc. pertaining to finances and accounts, and other matters concerning organization, operation and management of the DICJ. 

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/sonota/20231222-2/20231222.htmlopen new window

Securities

December 27, 2023 Administrative penalty charge against FUJIO FOOD GROUP INC. for making false statements in its securities reports and so forth
<Summary>
On December 26, 2023, the FSA issued an order to impose an administrative penalty charge against FUJIO FOOD GROUP INC. for making false statements in its securities reports and so forth, 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/r5/shouken/20231226-1.htmlopen new window
December 26, 2023 Administrative action against VIXO Kabushiki Kaisha, a notifier of specially permitted business for qualified institutional investors (SPBQII) that manages investments in “VIXO Fund,” in which the notifier serves as an operating partner
<Summary>
The Kanto Local Finance Bureau took administrative action against VIXO Kabushiki Kaisha, a notifier of specially permitted business for qualified institutional investors (SPBQII) that manages investments in “VIXO Fund,” in which the notifier serves as an operating partner, based on facts found to be in violation of the "Financial Instruments and Exchange Act" (FIEA), such as where the entity filed investment reports with deficiencies and failed to file further reports in response to the order by the Bureau, thereby ordering the suspension of the notifier's business in terms of sales and solicitation of private placement of funds from December 26, 2023, to January 25, 2024, and the improvement of its business operations, pursuant to the FIEA.
 
The business improvement order includes the following:
(1) To promptly explain to all investors who have acquired fund interests in all funds involved in the notifier's specially permitted business for qualified institutional investors in regard to the facts and reasons for the administrative action taken by the Bureau against the said notifier
(2) To keep track of the status of the fund asset management and custody services, and take all possible measures to protect investors
(3) To promptly formulate and implement a policy regarding the return of fund assets, etc., while giving due consideration to fairness for investors, and
(4) To report in writing on the status of actions and implementation of (1) through (3) above until completion (as soon as improvement measures are formulated and implemented).
 
Note: As the said entity has no English corporate name, the Romanized version of the Japanese corporate name is stated here. Kabushiki Kaisha (Kabushiki Gaisha) stated in the corporate name means "stock company" in Japanese.

The original press releases are available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/shouken/20231226/20231226.htmlopen new window

Insurance

December 26, 2023 Administrative actions against four major non-life insurance companies
<Summary>
The FSA took administrative actions against four major non-life insurance companies, namely, Aioi Nissay Dowa Insurance Co., Ltd., Sompo Japan Insurance Inc., Tokio Marine & Nichido Fire Insurance Co., Ltd., and Mitsui Sumitomo Insurance Company, Limited, ordering the improvement of their business operations pursuant to the "Insurance Business Act."
The administrative actions are based on findings* from reports filed by the said four entities in response to the FSA's order to submit reports pertaining to the conduct of their businesses, pursuant to the "Insurance Business Act."

* Acts that are considered to be in violation of the "Antimonopoly Act," acts that are inappropriate in light of the purpose of the Act, and the underlying business systemic issues that led to such acts were ascertained.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/hoken/20231226/20231226.htmlopen new window

Others

January 4, 2024 Major information about measures taken by FSA, Local Finance Bureaus, and financial industry related to the Noto Peninsula Earthquake in 2024
January 2, 2024 Request for financial measures to deal with disasters caused by the Noto Peninsula Earthquake in 2024 (The Hokuriku Local Finance Bureau and The Kanto Local Finance Bureau)
<Summary>
The following Local Finance Bureaus (including Local Finance Branch  Bureaus) alongside the competent branches of the Bank of Japan issued statements titled "Financial Measures to Deal with Disasters Caused by the Noto Peninsula Earthquake in 2024" to the relevant financial institutions.
- The Hokuriku Local Finance Bureau alongside the Kanazawa Branch of the Bank of Japan ( PDFStatement issued as of January 2, 2024 open new window),
- The Toyama Local Finance Branch Bureau of the Hokuriku Local Finance Bureau alongside the Kanazawa Branch of the Bank of Japan ( PDFStatement issued as of January 2, 2024 open new window),
- The Fukui Local Finance Branch Bureau of the Hokuriku Local Finance Bureau alongside the Kanazawa Branch of the Bank of Japan ( PDFStatement issued as of January 2, 2024 open new window), and
- The Niigata Local Finance Branch Bureau of the Kanto Local Finance Bureau alongside the Niigata Branch of the Bank of Japan (Statement issued as of January 2, 2024 open new window). 
(The statements above are available only in Japanese).
The statements request financial institutions in Ishikawa, Toyama, Fukui, and Niigata prefectures to appropriately deal with victims of the disaster considering their circumstances, such as by making the repayment of deposits flexible. 
* Matters related to financial measures in Ishikawa, Toyama, and Fukui prefectures fall within the purview of the Hokuriku Local Finance Bureau, and those in Niigata prefecture fall within the purview of the Kanto Local Finance Bureau). 
Disaster-affected areas in the prefectures are currently subject to the "Disaster Relief Act." If more areas in the prefectures become subject to the said Act, financial institutions in the prefectures will be requested to take measures in the same manner as above accordingly.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/ginkou/20240102.htmlopen new window
December 28, 2023 Updated : Trends in High-Speed Trading
December 28, 2023 Updated list of issuers of gift certificates in repayment procedures based on the "Payment Services Act"
December 26, 2023 Administrative action against Grant Thornton Taiyo LLC
<Summary>
The FSA took administrative action against Grant Thornton Taiyo LLC, an audit firm, pursuant to the "Certified Public Accountants Act" (Act No. 103 of 1948), ordering the firm to suspend its services in terms of the conclusion of new contracts for three months and to improve the firm's business (mainly in terms of its operational management structure), thereby prohibiting the firm's employees who are materially responsible for providing false attestation from being involved in part of the firm's services (mainly in terms of the monitoring of auditing services) for three months. In this context, two certified public accountants (CPAs) of the firm were subjected to administrative action, including a six-month suspension of their CPA services. 
Consequently, a decision was made to commence a hearing procedure pertaining to an order for payment of administrative monetary penalty of approximately 96 million yen against the firm.
The reason for the administrative action is that, in the audit of financial documents* of DDS Inc. conducted by the said audit firm, it was ascertained that the employees of the audit firm have, in negligence of due care, attested financial documents containing material misstatements as if they contained no misstatements.
* The financial documents refer to those contained in the amendment reports for the period from the fiscal year (FY) ended December 31, 2017, to the FY ended December 31, 2021, and those for the first quarter ended March 31, 2022.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/sonota/20231226-2/20231226.htmlopen new window
December 26, 2023 Publication of the updated "Financial Literacy Basics" (provisional English title)
<Summary>
The FSA published the updated "Financial Literacy Basics" (provisional English title) for the improvement of financial literacy and protection of financial services users. The guidebook provides basic knowledge of financial transactions, and others, for financial services users, particularly targeting working adults, college and university students, and high school students. 

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/sonota/20231225/20231225.htmlopen new window
December 25, 2023 Warning against a surge in online banking fraud
<Summary>
In response to the surge in online banking fraud, where a record high of 5,147 cases with a total loss of approximately eight billion yen were reported as of the end of November 2023, the FSA issued a warning against online banking fraud arising from SMS (short message services)/email phishing attacks. 

To widely raise awareness of financial services users, the FSA, in collaboration with the National Police Agency, has shared on its website and X (formerly known as twitter) account information about the scamming methods used by offenders in money-transfer scams targeting online financial services users, urging users to take precautions, such as not opening unknown SMS messages and so forth. The FSA also urges financial services users to report to (and/or consult with) the authorities (such as the police or the FSA's Counseling Office for Financial Services Users), or the contact point of the Japanese Bank Association whenever any sign of fraudulence is detected.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/ordinary/internet-bank_2.htmlopen new window
December 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 list of EXCELJapan-based entitiesopen new window).
The list also includes 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 reflects 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
December 22, 2023 Publication of "Statistics of NISA and Junior NISA Accounts" as of September 30, 2023
<Summary>
The FSA has published "Statistics of NISA (Nippon Individual Savings Account) and Junior NISA Accounts." As of September 30, 2023, there were approximately 20.3 million NISA accounts in total, and approximately 34.0 trillion yen (approximately 239.0 billion USD) was invested through the NISA accounts, among which, 4.1 trillion yen (approximately 29.0 billion USD) was invested through approximately 9.1 million accounts of the Tsumitate NISA (Dollar-Cost Averaging NISA) which has started since January 2018.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/policy/nisa/20231222.htmlopen new window
December 22, 2023 Establishment of the “Asset Management Forum Preparatory Committee”
December 22, 2023 Suggestion on the timing to cease entering into new contracts for products referencing Euroyen TIBOR in response to the publication of the Comments on the “timing to cease entering into new contracts” for products referencing Euroyen TIBOR by JBA TIBOR Administration

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