Japan
Legislative and Regulatory Amendments
- Financial Services Agency (FSA)
The FSA announced measures to protect the public from fraudulent SNS advertisements and displays. This initiative involves creating a point of contact for reporting fraudulent advertisements, including impersonations or false use of celebrity names. The FSA aims to collaborate with SNS operators to take appropriate actions against such fraud.
Date of Release: 1 Oct 2024 Implementation on: 1 Oct 2024 Applicable to: SNS users and individuals impacted by fraudulent advertisements
Establishment of the Asia GX Consortium
The FSA announced the official launch of the Asia GX (Green Transformation) Consortium during a high-level meeting in Tokyo on October 2, 2024. The consortium aims to promote transition finance, which provides funding to companies committed to decarbonisation. It brings together the FSA, ASEAN Financial Authorities, the Asian Development Bank, the Glasgow Financial Alliance for Net Zero (GFANZ), and financial institutions to develop methodologies and real-world cases for transition finance.
Date of Release: 2 Oct 2024
Implementation on: 2 Oct 2024 Applicable to: Sustainable Finance
The FSA updated the English version of "Trends in High-Speed Trading" as of June 30, 2024. This follows the amendment of the Financial Instruments and Exchange Act in May 2017 (enforced in April 2018), which requires financial instruments business operators engaged in high-speed trading to register.
Date of Release: 2 Oct 2024 Implementation on: 2 Oct 2024 Applicable to: Financial instruments business operators engaged in high-speed trading
The FSA published the finalised amendments to the "Comprehensive Guidelines for Supervision of Major Banks, etc." and other relevant and applicable Guidelines, alongside the finalised "Guidelines for Cybersecurity in the Financial Sector" (provisional English title) after public consultation. The finalised amendments to the Comprehensive Guidelines and the finalised Guidelines for Cybersecurity are aimed at addressing the escalation of cyber risks in recent years.
Date of Release: 04 Oct 2024 Implementation on: 04 Oct 2024 Applicable to: Banks and Financial Sector
The FSA published the finalised "Venture Capitals: Recommendations and Hopes, VCRHs." The finalised document was compiled by the "Expert Panel on Venture Capital (VC) Funds," jointly held by the FSA and METI, in order to encourage the development of the VC sector by making VCs that aim to raise funds from a wide range of domestic and overseas institutional investors more attractive as an asset class that can contribute to the long-term investment.
Date of Release: 17 Oct 2024 Implementation on: As indicated in the document Applicable to: Venture Capital Industry
The FSA announced that it has updated a regulatory notice, etc. designating certain rules pursuant to the provision of Article 25, paragraph (7) of the "Cabinet Office Order on Cryptoasset Exchange Service Providers." No public consultation was conducted, for the updates to the regulatory notice, etc. pertain to streamlining of terms and other formal changes, which fall under the category of minor changes set forth in Article 39, paragraph (4), item (viii) of the "Administrative Procedure Act." The updated regulatory notice, etc. took effect on October 25, 2024.
Date of Release: 25 Oct 2024 Implementation on: 25 Oct 2024 Applicable to: Cryptoasset Exchange Service Providers
The FSA announced the finalisation of the amendments to the "Points to Note on Disclosure of Corporate Affairs, etc. (Guidelines for Disclosure of Corporate Affairs, etc.)" (hereinafter referred to as the "Guidelines") after public consultation. The finalised Guidelines mainly pertain to the treatment of approval of due dates for annual securities reports and other relevant reports
Date of Release: 25 Oct 2024 Implementation on: 25 Oct 2024 Applicable to: Capital Markets
The FSA published the finalised "Cabinet Orders and Cabinet Office Orders Pertaining to the Amendments to the Financial Instruments and Exchange Act, etc.," The finalised Cabinet Orders and Cabinet Office Orders made necessary amendments to align with the enforcement of the "Act Partially Amending the Financial Instruments and Exchange Act, and Other Acts.”
Date of Release: 30 Oct 2024
Implementation on: 1 Nov 2024
Applicable to: Financial Industry
The FSA published the finalised "Order to Amend the Order Regarding Account Management Institutions" after public consultation. The finalised Order makes necessary amendments to the "Order Regarding Account Management Institutions," allowing a foreign account management institution to be recognised as a superior institution to a domestic one, provided specific requirements are met. This change enables domestic investors to access the payment service platform of a foreign account management institution through a domestic account management institution.
Date of Release: 6 Nov 2024
Implementation on: 6 Nov 2024
Applicable to: Financial Institutions
The International Association of Insurance Supervisors (IAIS) announced the approval of the final version of the International Capital Standard (ICS) as regulatory capital requirements applicable to internationally active insurance groups. Additionally, the IAIS has completed its comparability assessment of ICS and the Aggregation Method (AM) developed by the United States.
Date of Release: 15 Nov 2024
Implementation on: The final version of the ICS to be proposed for adoption on 5 Dec 2024
Applicable to: Insurance Industry
The FSA published the finalised "Cabinet Office Order Establishing Measures Concerning Special Provisions" after public consultation. This order aims to implement special measures on regional regulations outlined in the “Policy Package to Achieve Special Zones for Financial and Asset Management Businesses” (June 2024). It mainly focuses on easing restrictions on bank investments in GX (Green Transformation)-related businesses and expanding the types of investors eligible to invest in professional venture funds.
Date of Release: 18 Nov 2024
Implementation on: 18 Nov 2024
Applicable to: Asset Management Businesses
The FSA published the finalised "Cabinet Orders and Cabinet Office Orders Pertaining to the Amendments to the Financial Instruments and Exchange Act, etc." and others after public consultation. The finalised Cabinet Orders, and related regulations mainly implement provisions in response to the FY2024 amendments to the "Act Partially Amending the Financial Instruments and Exchange Act and the Act on Investment Trusts and Investment Corporations." They also include consequential amendments to other relevant laws and regulations based on recommendations from the "Second Interim Report of the Working Group on Capital Market Regulations.”
Date of Release: 20 Nov 2024
Implementation on: As indicated in the document.
Applicable to: Capital Markets
The FSA published the finalised amendments to the "Points to Note for the Financial Instruments and Exchange Act (FIEA)." These amendments clarify situations where it may be considered illegal for unregistered individuals or entities—such as those not registered as a financial instruments business operator, cryptoasset exchange provider, or stable coin intermediary—to make false advertisements online.
Date of Release: 22 Nov 2024
Implementation on: 22 Nov 2024
Applicable to: Investors and Businesses
The FSA published the agenda, handouts, and an outline of proceedings of the third meeting of the "Study Group on Deposit-taking Institutions' Response to Post-Quantum Cryptography.” In this context, the FSA released a report titled "Report of the Study Group on Deposit-taking Institutions' Response to Post-Quantum Cryptography (PQC)," which examines how financial institutions that take deposits are preparing for the potential impact of quantum computing on cryptography.
Date of Release: 26 Nov 2024
Implementation on: 26 Nov 2024
Applicable to: Deposit-taking Financial Institutions
The FSA published the finalised "Cabinet Office Order to Amend the Regulation for Enforcement of the Banking Act" following a public consultation. These amendments address requests for deregulation from the financial sector and industry organisations. Among other changes, the finalised Cabinet Office Order eases the requirements, such as the number of years since establishment of venture business companies in which specified subsidiary companies of banks, etc., can invest.
Date of Release: 29 Nov 2024
Implementation on: The finalised Cabinet Office Order and others were either enforced or took effect on November 30, 2024.
Applicable to: Financial Sectors
Comprehensive Supervisory Guidelines for Insurance Companies
The FSA released the updated "Comprehensive Guidelines for Supervision of Insurance Companies" and other related guidelines. The updates primarily reflect changes due to the enforcement of the "Ministerial Order on the Development of Ministerial Orders Related to the Ministry of Health, Labor and Welfare" and the partial enforcement of the "Act Partially Amending the Act on the Use of Numbers to Identify a Specific Individual in Administrative Procedures."
Date of Release: 2 Dec 2024
Implementation on: 2 Dec 2024
Applicable to: Insurance Companies
Cross-Sectoral Publicity for Financial Crime Prevention
The FSA announced that the Japanese Bankers Association (JBA), in collaboration with the FSA and the National Police Agency (NPA), has developed cross-sectoral and unified public relations content to support the ongoing customer due diligence by financial institutions as part of anti-money laundering (AML) and financial crime prevention efforts.
Date of Release: 10 Dec 2024
Implementation on: 10 Dec 2024
Applicable to: Financial Institutions
The FSA published a progress report on enhancing model risk management for financial institutions, addressing the increased complexity and scale of their operations. In 2021, the FSA introduced principles for model risk management and has since monitored and engaged with relevant institutions to improve their practices. The report aims to support not only the targeted institutions but also other financial entities in voluntarily enhancing their model risk management efforts.
Date of Release: 12 Dec 2024
Implementation on: 12 Dec 2024
Applicable to: Financial Institutions
The FSA announced the adoption of the International Capital Standard (ICS) by the International Association of Insurance Supervisors (IAIS). The ICS is the first comprehensive global capital standard for insurance supervision and will serve as a regulated capital requirement for internationally active insurance groups to promote resilience in the insurance sector.
Date of Release: 13 Dec 2024
Implementation on: 5 Dec 2024 (as announced by the IAIS)
Applicable to: Insurance Industry
The FSA published the finalised amendments to the regulatory notice on recipients of information related to high-speed trading, following public consultation. These amendments add Japan Alternative Market Co., Ltd. to the list of recipients under the "Cabinet Office Order on Definitions" in accordance with the Financial Instruments and Exchange Act.
Date of Release: 25 Dec 2024
Implementation on: 26 Dec 2024
Applicable to: Capital Market
Publication of the Updated Regulatory Notice Designating an Electronic Data Processing System
The FSA published an updated regulatory notice designating an electronic data processing system under the "Order for Enforcement of the Financial Instruments and Exchange Act." The update exempts transactions of listed securities on the PTS operated by Japan Alternative Market from the 5% rule for tender offers.
Date of Release: 25 Dec 2024
Implementation on: 25 Dec 2024
Applicable to: Capital Market
- Japan Securities Dealers Association (JSDA)
The JSDA published the Sales Representatives Manual, which provides the necessary materials for sales representatives to acquire the knowledge required for their duties. It covers laws, regulations, rules, and product business knowledge essential for those in the financial instruments business.
Date of Release: 19 Dec 2024
Implementation on: 19 Dec 2024
Applicable to: Sales Representatives and Individuals participating in the Financial Instrument Business
- Japan Exchange Group (JPX)
Provision of Content for Expanding English Disclosure
The Tokyo Stock Exchange (TSE) published reference content for the practical application of English content disclosure initiatives. These include: (1) revision of the practical handbook for English disclosure; (2) creation of English sample disclosure forms; and (3) creation of the “Questions and Answers Regarding Expansion of English Disclosure in the Prime Market (October 2024 Update)”.
Date of Release: 7 Oct 2024
Implementation on: April 2025
Applicable to: Listed Companies
Announcement of JSCC and DTCC Collaboration on Digital Assets
The Depository Trust & Clearing Corporation (DTCC) and Japan Securities Clearing Corporation (JSCC) announced their collaborated on a proof-of-concept (PoC) for collateral use cases with digital assets. JSCC conducted its PoC to design and develop a cross-industry and cross-product collateral ecosystem by making full use of the DLT platform "DTCC Digital Launchpad" provided by DTCC and open-source software (OSS).
Date of Release: 16 Oct 2024
Implementation on: 16 Oct 2024
Applicable to: Central Clearing Counterparties
TSE announced the completion of the migration and confirmation work for the system upgrade of its cash equity trading system "arrowhead," the ToSTNeT system, and the Market Information System. In conjunction with the system upgrade, TSE will extend the trading hours of the cash equity market by 30 minutes beginning on the go-live date. The trading hours of the derivatives market will also be changed on the same date in connection with the extension of trading hours of the cash equity market. In addition, TSE will introduce a closing auction session in the cash equity market at the end of the afternoon session.
Date of Release: 3 Nov 2024
Implementation on: 5 Nov 2024
Applicable to: Derivative Market and Cash Equity Market
"JPxData Portal (Beta Version)" Update Announcement
The JPXI made an announcement that it has updated the "JPxData Portal (beta version)" by adding new indicators for analysis, such as stock price, market capitalisation, earnings, and ESG disclosure information, to the details page of each company's issue profile.
Date of Release: 5 Nov 2024
Implementation on: 5 Nov 2024
Applicable to: Capital Market
Tradeweb and Tokyo Stock Exchange Collaborate to Expand Liquidity in Japanese ETFs
The Tradeweb Markets Inc. and TSE announced a collaboration to provide institutional investors with improved access to liquidity in Japanese exchange-traded funds (ETFs). The collaboration introduces a new direct link between Tradeweb and TSE’s request-for-quote (RFQ) platform, CONNEQTOR, enabling Tradeweb's buy-side clients to incorporate CONNEQTOR liquidity providers when initiating trade inquiries on the Tradeweb Japan-listed ETF marketplace.
Date of Release: 11 Nov 2024
Implementation on: 11 Nov 2024
Applicable to: Japanese ETFs
Cases Where Companies Are Not Aligned with Investors’ Perspectives
TSE released a new guide titled “Cases Where Companies Are Not Aligned with Investors’ Perspectives,” intended to serve as a reference for companies looking to review and enhance their initiatives in relation to establishing a management that is conscious of cost of capital and stock price.
Date of Release: 21 Nov 2024
Implementation on: 21 Nov 2024
Applicable to: Capital Market
Launch of "JPX Sustainability Information Search Tool (Beta Version)" for TSE Listed Companies
The JPX and JPX Market Innovation & Research launched the "JPX Sustainability Information Search Tool (Beta Version)" to improve the disclosure of sustainability-related information for TSE-listed companies. This tool enables companies to view on a single screen, links to information included in publications by Prime Market-listed companies (annual securities reports, integrated reports, websites, etc.) relating to a choice of 38 environmental, social, and governance (ESG) topics.
Date of Release: 26 Dec 2024
Implementation on: 26 Dec 2024 (Beta Version)
Applicable to: Listed Companies
Consultations
- Financial Services Agency (FSA)
The FSA published the draft amendments to several supervisory guidelines, including those for major banks, regional financial institutions, small-amount short-term insurers, financial product dealers, credit rating agencies, and others. The proposal is intended to review and update the regulations on the public inspection of public information in accordance with the "Plan for a Collective Review of Regulations in Light of Digital Principles" (provisional English title).
Consultation Period: 15 Oct 2024 – 14 Nov 2024 Applicable to: Major banks, regional financial institutions, small-amount short-term insurers, financial product dealers, credit rating agencies, and others
The FSA published the draft "Cabinet Orders and Cabinet Office Orders Pertaining to the Amendments to the Financial Instruments and Exchange Act, etc. as of FY2023" and others (hereinafter collectively referred to as the "proposal") for public consultation. Key amendments include: (1) provisions for providing information to customers before contract conclusion; (2) rules for the electronic provision of prospectuses; and (3) digitalisation of hearing procedures related to surcharge payment orders.
Consultation Period: 23 Oct 2024 – 22 Nov 2024
Applicable to: Financial Industry
The FSA proposed draft amendments to the " Regulation for Enforcement of the Insurance Business Act in Regard to the Economic Value-Based Solvency Regulatory Framework" for public consultation. The proposal aims to update relevant Ministerial Orders, regulatory notices, and the "Comprehensive Guidelines for Supervision of Insurance Companies" in response to the introduction of this new regulatory framework for insurers.
Consultation Period: 31 Oct 2024 – 2 Dec 2024
Applicable to: Insurance Companies
The FSA published draft amendments to a regulatory notice designating certain rules based on Article 2(1) and (2) of the "Cabinet Office Order on the Regulation of Over the Counter (OTC) Derivatives Transactions" in connection with the future cessation of Euroyen TIBOR (Tokyo Internet Offered Rate) [hereinafter referred to as the "proposal"] for public consultation. The proposal is mainly intended to develop provisions relating to transactions subject to the centralisation of clearing for OTC derivatives transactions, etc. conducted by financial instruments firms, etc.
Consultation Period: 18 Nov 2024 – 18 Dec 2024
Applicable to: Financial Services and Derivative Market
The FSA published the draft "Cabinet Order to Amend the Order for Enforcement of the Financial Instruments and Exchange Act" for public consultation. The proposal is mainly intended to develop the relevant and applicable Cabinet Orders, etc. in order to encourage financing for startups, etc. and the provision of various investment products according to the risk-bearing capacity of investors.
Consultation Period: 26 Nov 2024 – 26 Dec 2024
Applicable to: Financial Sector
The FSA published the draft amendments to the "Comprehensive Guidelines for Supervision of Small- and Medium-Sized and Regional Financial Institutions" and to other relevant and applicable comprehensive guidelines* (hereinafter collectively referred to as the "proposal") for public consultation. The revisions outline that if a company changes its business, such as expanding into banking or launching a new, unrelated business, and there is no significant change in operations, the company will be required to report after starting the new business. The guidelines will specify the reporting requirements and key points to consider in such cases.
Consultation Period: 20 Dec 2024 – 24 Jan 2025
Applicable to: Banks, Cooperative Financial Institutions, and Insurance Companies
The FSA announced the draft amendments to the "Cabinet Office Order on Financial Instruments Business, etc." and others (hereinafter collectively referred to as the "proposal") for public consultation. The proposal is mainly intended to require financial institutions to provide information to their clients on matters pertaining to potential conflicts of interest with their clients.
Consultation Period: 20 Dec 2024 – 21 Jan 2024
Applicable to: Financial Services Intermediaries and Financial Instruments Business Operators
The FSA proposed a draft "Cabinet Office Order to Amend the Regulation on Terminology, Forms, and Preparation Methods of Consolidated Financial Statements" for public consultation. The proposal aims to make necessary amendments to the handling of financial statements and related guidelines in response to the Accounting Standards Board of Japan's (ASBJ) Exposure Draft of Accounting Standard No. 82, which seeks to amend Statement No. 27 regarding corporate taxes, inhabitants’ taxes, enterprise taxes, and other applicable accounting standards.
Consultation Period: 27 Dec 2024 – 27 Jan 2025
Applicable to: Investors, Corporations and Businesses
This document is provided for information purposes only and does not constitute legal, tax, investment, regulatory, accounting or other professional advice. For more information on the legal and regulatory status of IQ-EQ companies please visit www.iqeq.com/legal-and-compliance.