Financial Services AgencyFSA Weekly Review No.572

February 1, 2024

What’s New on the FSA Website

Week of January 19, 2024 - January 25, 2024

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

Press Releases

Policies

January 24, 2024 Updated：Policy Plan for Promoting Japan as a Leading Asset Management Center

Publication

January 22, 2024 PDFFSA publishes English translation of monthly magazine, Access FSA No.243 

Councils

January 19, 2024 Publication of the agenda and handouts of the 148th meeting of the Council on Automobile Liability Insurance
<Summary>
The FSA published the agenda and handouts of the 148th meeting of the Council on Automobile Liability Insurance, which was held on January 19, 2024.
Consequent to the discussion on the standard insurance premium rates for specified small, motorized bicycles, regarding which a notification was provided to the FSA by the General Insurance Rating Organization of Japan (GIROJ), the standard insurance premium rates were approved as proposed. The said standard insurance premium rates are scheduled to take effect in April 2024. 
In addition, the Council members also discussed and approved a proposal to update the mutual aid rules associated with the introduction of cashless payment for the collection of mutual liability insurance premiums.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/singi/singi_zidousya/siryou/20240119.htmlopen new window

Securities

January 19, 2024 Administrative action against Godo Kaisha FC Capital, Godo Kaisha AG Capital, and Godo Kaisha NGI Capital, notifiers of specially permitted business for qualified institutional investors (SPBQII)
<Summary>
The Kanto Local Finance Bureau took administrative action against Godo Kaisha FC Capital, Godo Kaisha AG Capital, and Godo Kaisha NGI Capital, notifiers of specially permitted business for qualified institutional investors (SPBQII), based on facts found to be in violation of the "Financial Instruments and Exchange Act" (FIEA), such as where the entities failed to file mandatory business reports (i.e. "jigyo-hokokusho" in Japanese) in response to the order by the Bureau, thereby ordering the abolition of the notifiers' entire specially permitted business for qualified institutional investors, and the improvement of their business operations, pursuant to the FIEA.
 
The business improvement order includes the following:
(1) To notify the Bureau of the location of their principal business offices, etc.
(2) To promptly explain to all investors who have acquired fund interests in all funds involved in the notifiers' SPBQII (under the Former Act) the facts and reasons for the administrative action taken by the Bureau against the said notifiers 
(3) To keep track of the status of the fund asset management and custody services, and promptly explain the status and other necessary matters to fund investors
(4) To promptly formulate and implement a policy regarding the return of fund assets, etc., while giving due consideration to fairness for investors
(5) In responding to and implementing (2) through (4) above, take all possible measures to protect investors, including thorough management of fund assets, while giving due consideration to fairness among fund investors, and
(6) To report in writing on the status of actions and implementation of (2) through (5) above until completion (as soon as improvement measures are formulated and implemented).
 
Note: As the said entities have no English corporate names, the Romanized version of the Japanese corporate names are stated here. Godo Kaisha (Godo Gaisha) stated in the corporate names mean "limited liability company," in Japanese

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/shouken/20240119.htmlopen new window

Insurance

January 25, 2024 Administrative actions against Sompo Japan Insurance Inc. and Sompo Holdings, Inc.
<Summary>
The FSA took administrative actions against Sompo Japan Insurance Inc. and Sompo Holdings, Inc., ordering the improvement of their business operations pursuant to the "Insurance Business Act."
The administrative actions are based on findings from the onsite-inspection of the said entities conducted by the FSA and from reports filed by Sompo Japan Insurance Inc. in response to the FSA's order to submit reports pertaining to the conduct of their businesses, pursuant to the "Insurance Business Act."

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/hoken/20240125/20240125.htmlopen new window

Others

January 25, 2024 Requests for financial measures to deal with disasters caused by the heavy snow, etc. which started on January 23, 2024 (the Tokai Local Finance Bureau)
<Summary>
On January 25, 2024, the Tokai Local Finance Bureau alongside the Bank of Japan's Nagoya Branch issued a statement titled "Financial Measures to Deal with Disasters Caused by the Heavy Snow, etc. Which Started on January 23, 2024" to the relevant financial institutions. The statement requests financial institutions in Gifu Prefecture to appropriately deal with victims of the disaster considering their circumstances, such as by making the repayment of deposits flexible.
Disaster-affected areas in the prefectures are currently subject to the "Disaster Relief Act." If more areas in the prefecture become subject to the said Act, financial institutions in the prefecture 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/20240125.htmlopen new window
January 25, 2024 Publication of "For Starters as Outside Directors" (provisional English title)
<Summary>
The FSA, in collaboration with METI (Ministry of Economy, Trade and Industry) and TSE (Tokyo Stock Exchange, Inc.), jointly formulated and published PDF"For Starters as Outside Directors"open new window(provisional English title) [available only in Japanese on METI's webpageopen new window ] as part of the initiatives to enhance the competencies of outside directors in listed companies.
The publication contains information on what outside directors are expected to know in fulfilling their roles, where they are expected to offer advice for and conduct supervision of corporate management from the perspective of promoting sustainable corporate growth and enhancing corporate value over the medium to long term.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/sonota/20240125.htmlopen new window
January 24, 2024 Initiatives by the financial industry to enhance their asset management businesses
January 24, 2024 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  EXCELforeign-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
January 23, 2024 Extension of the filing due dates of reports and notifications to be filed by disaster-affected financial institutions, etc. in case of business impediments caused by the Noto Peninsula Earthquake in 2024
<Summary>
The FSA has announced that disaster-affected financial institutions, etc.* and so forth may extend the filing due dates of reports or notifications required under the "Banking Act" and other relevant and applicable laws and regulations if business impediments have been caused by the Noto Peninsula Earthquake in 2024, pursuant to the enforcement of the "Cabinet Order on the Specific Extraordinary Disaster Caused by the Noto Peninsula Earthquake in 2024 to Designate Measures to be Applied Thereto" (provisional English Order title). 
In this respect, a disaster-affected financial institution which has been unwittingly forced to miss the statutory deadline for filing the reports or notifications due to force majeure shall not be held liable administratively or criminally for the failure of filing, if the financial institution files the said reports or notifications by April 30 2024. 
Reports, etc.,** for which filing deadlines can be extended with the approval of the authorities (including the FSA and the competent Local Finance Bureaus or Local Finance Branch Bureaus), will be handled promptly and appropriately upon application by the disaster-affected financial institutions, etc.. 

*“disaster-affected financial institutions” in this context refers to banks, shinkin banks (credit unions), shinkumi banks (credit cooperatives/associations), labor banks, securities companies, bank agents, etc., and electronic payment service providers, etc. that have their headquarters or head offices in Ishikawa, Fukui, Toyama or Niigata prefectures.

**filing of reports, etc. for which deadlines can be extended refer to the filing of business reports by banks, etc. (within three months after the end of the relevant program year), public notices of balance sheets (within three months after the end of the relevant program year), reports on banking agent business, etc. (within three months after the end of the relevant program year), etc. by bank agents, etc.

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/news/r5/sonota/20240123-2/20240123.htmlopen new window
January 19, 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 with relevant associations in the financial sector in December 2023. (Available only in Japanese).
 
Notable issues discussed by most of the groups were:
- Enhancement of human resource intermediary functions of regional financial institutions to encourage matching of human resources for regional corporate management
Note: The FSA has been promoting a project for matching human resources for regional corporate management to create a new inflow of professionals from major corporations to small- and medium-sized enterprises through the human resource intermediary functions of regional financial institutions, thereby encouraging professionals with expertise at major corporations to play an active role in their respective regions.
- Reflections on cybersecurity drills (Delta Wall VIII) conducted with financial institutions [as well as the status of efforts/initiatives to enhance cybersecurity in the financial sector]
- Dissemination and publicity concerning NISA, and
- Enforcement of the "Act on the Promotion of Ensuring Economic Security Through Implementation of Integrated Economic Measures" (i.e. the "Economic Security Promotion Act") [provisional English law title].
 
* 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 December 2023, opinion exchange meetings were held respectively with the following four groups: major banks, etc.; the Regional Banks Association of Japan and the Second Association of Regional Banks; the General Insurance Association of Japan; and Japan Payment Service Association (issuers of prepaid payment instruments).

The original press release is available in Japanese at the following URL:
https://www.fsa.go.jp/common/ronten/index_7.htmlopen new window
January 19, 2024 Request for Proposals for "Special Zones for Financial and Asset Management Businesses"

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