Publication of the draft “Cabinet Office Order to Amend the Cabinet Office Order on Definitions Under Article 2 of the Financial Instruments and Exchange Act” and others for public consultation
<Summary>
The FSA proposed the draft “Cabinet Office Order to Amend the Cabinet Office Order on Definitions Under Article 2 of the Financial Instruments and Exchange Act” and others (hereinafter collectively referred to as the “proposal”) for public consultation.
The proposal is intended to provide necessary amendments to the said Cabinet Office Order to make the tokenized membership rights of a limited liability company, etc. subject to the same regulations as the ordinary (regular) membership rights of a limited liability company, etc. in certain cases.
Public comments will be accepted until 5:00 p.m. (JST), March 4, 2024.
The original press release is available in Japanese.
January 31, 2024
Publication of the finalized amendments to the “regulatory notices pertaining to Pillar 1 and Pillar 3 requirements of capital adequacy” applicable to shinkumi banks and the federation of shinkumi banks, and to labor banks and the federation of labor banks after public consultation
<Summary>
The FSA finalized the amendments to the “regulatory notices pertaining to the Pillar 1 and Pillar 3 requirements of capital adequacy” applicable to shinkumi banks and the federation of shinkumi banks, and to labor banks and the federation of labor banks after public consultation. The finalized amendments mainly provide necessary amendments to the regulatory notices in response to the finalized Basel III framework.*
The implementation dates of the regulatory notices pertaining to the finalized 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, except for the highest designated parent company: March 31, 2024
– Non-internationally active financial institutions that do not use internal model-based approaches for measuring risks, and the highest designated parent company: 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 finalized Basel III framework refers to a consolidated package of the “Basel III framework” (December 2017) and the “market risk capital framework (minimum capital requirements for market risk)” (January 2019). The finalized amendments to the regulatory notices pertaining to the finalized Basel III framework have been promulgated by category of financial institutions.
The original press release is available in Japanese.
January 31, 2024
Publication of the finalized amendments to the “Comprehensive Guidelines for Supervision of Small- and Medium-Sized and Regional Financial Institutions” alongside the draft amendments to other relevant and applicable comprehensive guidelines after public consultation
<Summary>
The FSA finalized the amendments to the “Comprehensive Guidelines for Supervision of Small- and Medium-Sized and Regional Financial Institutions” alongside the amendments to other relevant and applicable comprehensive guidelines* after public consultation.
Socioeconomic activities are beginning to normalize following the downgrade of category classification of COVID-19 Infection to Class V Infectious Disease (equivalent to seasonal flu) under the “Infectious Disease Act” in May 2023.
In response to a concern that an inability to repay the virtually interest-free unsecured loans extended by private financial institutions (FIs) amid the COVID-19 crisis can cause failures of corporate borrowers, the finalized amendments encourage FIs to further extend tailored business support to corporate borrowers in terms of management improvement and business revitalization according to the actual state of their businesses, not limited to financial (cash management) support.
The finalized amendments will take effect on April 1, 2024.
*Other relevant and applicable guidelines are as follows:
– Comprehensive Guidelines for Supervision of Major Banks, etc.
– Comprehensive Guidelines for Supervision of Cooperative Financial Institutions (provisional English title), and
– Comprehensive Guidelines for Supervision of Fisheries Cooperatives Engaging in Credit Business (provisional English title).
The original press release is available in Japanese.
January 31, 2024
Publication of the finalized “Cabinet Order and Cabinet Office Orders Pertaining to the Amendments to the Financial Instruments and Exchange Act, and Other Acts” after public consultation
<Summary>
The FSA has published the finalized “Cabinet Order and Cabinet Office Orders Pertaining to the Amendments to the Financial Instruments and Exchange Act, and Other Acts” after public consultation.
The finalized Cabinet Order and Cabinet Office Orders mainly provide consequential amendments to the relevant and applicable cabinet orders, cabinet office orders, and others, in response to the partial enforcement of the “Act Partially Amending the Financial Instruments and Exchange Act and Other Acts” (Act No. 79 of 2023), which was enacted on November 20, 2023.
In particular, the finalized Cabinet Order and Cabinet Office Orders mainly provide amendments in regard to the following:
(1) the development of provisions concerning the establishment of the new public organization to accelerate financial and economic education, and
(2) the development of provisions concerning accounting documents of investment corporations.
The finalized Cabinet Order and Cabinet Office Orders were enforced on February 1, 2024.
The original press release is available in Japanese.
January 31, 2024
Publication of the draft amendments to the regulatory notice designating financial institutions pursuant to the provisions under Article 17 of the “Act on Management of Deposit and Saving Accounts by Use of Individual Numbers Based on the Intention of Depositors” for public consultation
<Summary>
The FSA proposed the draft amendments to the regulatory notice designating financial institutions pursuant to the provisions under Article 17 of the “Act on Management of Deposit and Saving Accounts by Use of Individual Numbers Based on the Intention of Depositors” (hereinafter referred to as “the proposal”) for public consultation.
The proposal is intended to designate the persons listed in each item of Article 2, paragraph (1) of the “Deposit Insurance Act” (Act No. 34 of 1971) and agricultural or fishery cooperatives set forth in Article 2, paragraph (1) of the “Agricultural and Fishery Cooperatives Savings Insurance Act” (Act No. 53 of 1973) as financial institutions designated by a competent administrative authority set forth in Article 17 of the “Act on Management of Deposit and Saving Accounts by Use of Individual Numbers Based on the Intention of Depositors.”
Public comments will be accepted until 5:00 p.m. [JST], March 1, 2024.
The original press release is available in Japanese.
January 26, 2024
Publication of the draft “Cabinet Office Order to Amend the Cabinet Office Order on Crypto-Asset Exchange Service Providers ” for public consultation
<Summary>
The FSA proposed the draft “Cabinet Office Order to Amend the Cabinet Office Order on Crypto-Asset Exchange Service Providers” (hereinafter referred to as the “proposal”) for public consultation.
The proposal is aimed at requiring crypto-asset exchange service providers to provide information on crypto-assets with transfer restrictions to a certified association for payment service providers and to make such information publicly available.
Public comments will be accepted until 12:00 a.m. (midnight) [JST], February 26, 2024.
The original press release is available in Japanese.
January 26, 2024
Publication of the Partial Amendment to the Designation of a country or region under Articles 17-2 and 17-3 of the Order for Enforcement of the Act on Prevention of Transfer of Criminal Proceeds
<Summary>
Japan has imposed notification obligations (i.e. travel rule) on Crypto asset Exchange Service Providers and Electronic Payment Instrument Exchange Service Providers (hereinafter collectively referred to as “VASPs”) to submit information on originators and beneficiaries at the time of transfer of crypto-assets (“VAs”)/electronic payment instruments (i.e. stablecoins, “SCs”) to make it possible to track the transaction routes of VAs/SCs.
Given the ineffectiveness of the regulation where relevant requirements in the legal system of the counterparty country or region (i.e.jurisdiction) is not in place, Japan has limited the scope of the travel rule to transfers to foreign VASPs located in jurisdictions that have regulations equivalent to the travel rule requirements in Japan.
In light of the implementation status of travel rules in each jurisdiction, Japan adds eight jurisdictions to the scope of the requirements (see the Attachment for details).Information on the Travel Rule requirements in Japan is also available here.
The deadline for submission of comments is 6:00 p.m. on February 25, 2024.
