Silviase/jgov_v1.4_full_ann huggingface dataset:
over-the-counter derivative transactions (August 9, 2013)

The FSA added symmetrical handling as a “supervisory viewpoint” for “slippage” in currency-related over-the-counter derivative transactions (the difference between the price indicated to the customer at order or designated by the customer at order and the actual contracted price). The FSA clarified that any profit or loss arising from slippage shall either both be passed on or neither passed on to each customer; passing only one of the two on to the customer shall not be permitted (effective from August 9, 2013).

109\. NISA Revision due to the introduction of NISA (August 27, 2013)

Given that NISA is being introduced in January 2014, the FSA added points to pay attention to regarding soliciting sales of NISA (development of controls when sales representatives give an explanation of the product and provision of financial instruments in line with the design and purpose of the system) to ensure that NISA will be used in accordance with its institutional purpose to provide a buildup of assets to support households and expand the supply of funds for growing companies (effective from August 27, 2013).

110. Revision that reflects frequent problems regarding soliciting sales of financial instruments to elderly customers (December 16, 2013)

The FSA added points to pay attention to regarding soliciting sales of financial instruments to elderly customers (maintenance and compliance with internal rules in light of JSDA self-regulatory rules and follow-up for elderly customers after the sale of financial instruments) on the overall supervisory guidelines for financial instruments business operators (effective from December 16, 2013).

111. Revision due to the additional information to be included in pre-contract documents regarding equity dividend for investment corporations (February 14, 2014)

In accordance with the revision of the Cabinet Office Ordinance to the effect that the matter regarding money flow of investment corporations is included in pre-contract documents regarding the equity dividend of an investment corporation that are delivered in advance to each customer before the sale thereof, the FSA also added points to pay attention to regarding matters to be included in the pre-contract documents for equity interest for investment corporations in the overall supervisory guidelines for financial instruments business operators (effective from April 1, 2014).

112. Revision that reflects the “Recommendations for Vitalizing Financial and Capital Markets” published in December 2013 (March 7, 2014)
In response to the “Recommendations for Vitalizing Financial and Capital Markets” that was compiled by the Panel for Vitalizing Financial and Capital Markets in December 2013, the FSA added points to pay attention to when evaluating the performance of sales representatives (how much importance to attach to the sales commissions received) (effective from March 7, 2014).

### 113. Revision due to request to relax firewall regulations (March 28, 2014)

In response to the request to relax firewall regulations, the Cabinet Office Ordinance was revised (relaxation of written consent requirements relating to the communication of undisclosed customer information within the group of financial institutions). In response to this revision, the FSA added a flexible opt-out opportunity regarding undisclosed corporate customer information (system in which undisclosed customer information may be communicated within the group of financial institutions until the customer requests not to do so) on the overall supervisory guidelines for financial instruments business operators (effective from April 1, 2014).

### 114. Revision related to the response to anti-social forces (June 4, 2014)

Based on the “Encouraging the Efforts to Sever Relationships with Antisocial Groups” published by the FSA in December 2013, the FSA made a revision aimed at promoting efforts to sever relationships with antisocial groups (applicable from June 4, 2014).

115. Revision to clarify what dealings are classed as an unregistered business operator (June 27, 2014)

The FSA clarified what dealings are classed as Type I financial instruments business and what dealings are classed as Type II financial instruments business (effective from June 27, 2014).
Box: Designated Dispute Resolution Organizations

In addition to the Financial Instruments and Exchange Act, the Finance Related Laws and Regulations (the Banking Act and the Insurance Business Act) provide a Financial ADR System (alternative dispute resolution system in the financial sector). This system aims to improve protection and convenience for financial services users through providing quick, simple, neutral and fair processing of complaints and resolution of conflicts, regarding problems with financial institutions. Each designated dispute resolution organization plays a core role in the financial ADR system. With this, the administrative agency has an effective framework to ensure neutrality and fairness by designating and overseeing designated dispute resolution organizations.

For the supervision of designated dispute resolution organizations, the FSA formulated Comprehensive Guidelines for Supervision of Designated Dispute Resolution Organizations (formulated on August 2, 2013). The FSA supervises designated dispute resolution organizations by assessing the adequacy of their operations including their management system, with the aim of ensuring improved reliability for users and consistent operations reflecting the characteristics of each organization.

As of June 2014, the following bodies are designated dispute resolution organizations.

(as of June 30, 2014)

Date Designated	Institution Name	Type of Business
2010.9.15	Japanese Bankers Association	Banking servicesNorinchukin Bank's business
2010.9.15	Trust Companies Association of Japan	Trust business subject to dispute resolution procedureSpecific concurrent business
2010.9.15	The Life Insurance Association of Japan	Life insurance servicesForeign life insurance services
2010.9.15	The General Insurance Association of Japan	Non-life insurance servicesForeign non-life insurance servicesSpecified non-life insurance services
2010.9.15	The Insurance Ombudsman	Non-life insurance servicesForeign non-life insurance servicesSpecified non-life insurance servicesInsurance solicitation by insurance brokers
2010.9.15	The Small Amount & Short Term Insurance Association of Japan	Low-cost, short-term insurance services
2010.9.15	Japan Financial Services Association	Money lending operations
2011.2.15	Financial Instruments Mediation Assistance Center	Specified Type I Financial Instruments Transaction Services
### iv. Trends in the Development of International Relations

### a. International Initiatives for the Prevention of Reoccurrence of a Financial Crisis

### 116. Overview

The first G20 summit was held in Washington, D.C. in November 2008 in response to the Global Financial Crisis that erupted full-scale in the autumn of 2008. Since then, various issues on financial regulatory reforms have been discussed and agreed to prevent a recurrence of the financial crisis in a variety of forums, including the G20, the FSB (the Financial Stability Board), and standards setting bodies.

Since most of these agreements move into the implementation stage, coordination among the relevant authorities becomes an urgent task to avoid any market fragmentation arising from inconsistency of regulations. The FSA has actively participated in initiatives to address these challenges.
### b. Financial Supervisory International Organization

### 117. Overview

The FSA has actively participated in both sectoral and cross-sectoral international conferences in the financial field composed of the regulatory and supervisory authorities of each country in order to respond adequately to the activities of financial institutions and the internationalization of financial transactions. Specifically, the FSA has engaged in sectoral international conferences by international organizations including the Basel Committee on Banking Supervision (BCBS), the International Organization of Securities Commissions (IOSCO) and the International Association of Insurance Supervisors (IAIS) as well as cross-sectoral international conferences by those including the FSB and the Joint Forum. These conferences formulate international supervisory rules regarding international principles, standards and guidelines for the supervision of financial institutions to promote the stability of the international financial system. Representing Japan, the FSA is committed to making a positive contribution in order to demonstrate international leadership.

## Box: Bilateral cooperation frameworks in the securities field (As of June 2014)

Amid growing cross-border transactions with the ongoing integration of the securities markets in different countries, it is essential to enhance cooperation with the securities regulatory authorities in those countries in order to properly regulate and supervise securities markets and securities trading.

Up to now, the FSA has established cooperation frameworks in the securities fields with the China Securities Regulatory Commission (CSRC) (in 1997), the Monetary Authority of Singapore (MAS) (in 2001), the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) (in 2002), the Australian Securities and Investments Commission (ASIC) (in 2004), the Securities and Futures Commission of Hong Kong (SFC) (in 2005), and the New Zealand Securities Commission (NZSC) (2006).

In January 2006, the FSA revised the framework with the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) to add financial futures in the scope of cooperation.

In addition, the FSA has established cooperation frameworks with the European Securities and Markets Authority (ESMA) in the area of credit rating agencies (in 2011), with 29 securities regulatory authorities in the EU related to the supervision of funds and fund managers conducting their business on a cross-border basis (in 2013), and with the U.S. Commodity Futures Trading Commission (CFTC) in the supervision and oversight of regulated entities that operate on a cross-border basis in both Japan and the United States (in 2014).
c. Other International Forums in the Financial Sector

### 118. Overview

Since it is increasingly important to ensure the safety of the financial sector in terms of the potential impact on the macro economy, initiatives on financial administrations have been taken in international forums other than those composed of the regulatory authorities mentioned in the previous section. The World Trade Organization (WTO) has also started negotiations on liberalizing financial services trade. The FSA has been actively participating in these forums, including the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD) and the WTO, with the aim of reflecting the position of our country and contributing to stabilizing the international financial system and liberalizing financial services trade.

Box: Progress of Negotiations over Economic Partnership Agreements Involving Japan (As of June 2014)

## - Bilateral EPA

The Economic Partnership Agreement (EPA) aims to promote the liberalization of the flow of goods, people, services, capital and information across the borders between two countries or areas with close economic relations to strengthen or unify the economic activities as a whole.

Japan has already concluded EPAs with Singapore (came into force in November 2002, and the Amending Protocol which came into force in September 2007), Mexico (came into force in April 2005), Malaysia (came into force in July 2006), Chile (came into force in September 2007), Thailand (came into force in November 2007), Indonesia (came into force in July 2008), Brunei (came into force in July 2008), the Philippines (came into force in December 2008), ASEAN (came into force in December 2008), Vietnam (came into force in October 2009), Switzerland (came into force in September 2009), India (came into force in August 2011), and Peru (came into force in March 2012). Currently, Japan is negotiating EPAs with Australia, the EU, ASEAN, Canada, Mongolia, Colombia, South Korea, and the Regional Comprehensive Economic Partnership (RCEP), and also negotiating a Free Trade Agreement (FTA) with China and South Korea (EPA negotiations with South Korea were suspended in 2004, and so were those with the Gulf Cooperation Council countries in 2009).

It was announced that Japan substantially agreed with Australia in April 2014, and agreed to start negotiations with Turkey at a top-level meeting in January 2014.
### APPENDIX I. Inquiries to the FSA

### i. Opening of the one-stop inquiry desk in English

The FSA opened the one-stop inquiry desk (emailed to: equestion@fsa.go.jp) for inquiries in English concerning: (i) interpretations of laws and regulations; or (ii) specific procedures necessary to practice in the Japanese financial market. Since its establishment, the one-stop inquiry desk received 77 inquiries, 16 of which were replied to, by the end of the program year 2013. Forty out of 77 inquiries were related to fraudulent solicitation for investment in securities, five were concerning administrative procedures, six were regarding laws and regulations, and 26 were on other matters.

Box: Examples of the answers to the inquiries
-	Setting up an alternative investment fund and offering foreign collective investment schemes (CIS) in Japan
Businesses offering foreign CIS to residents of Japan as private placements are required to register as a Type II Financial Instruments Business Operator or submit in advance a notification. It is advisable to consult with a Japanese-speaking attorney specialized in the Financial Instruments and Exchange Act (FIEA) and business procedures in Japan before the registration*.
Specific procedures for registering as a Type II Financial Instruments Business Operator are as follows.
FIEA stipulates that a person (including an entity) who engages in self-offering of equity interest of collective investment scheme (fund) or manages invested or contributed assets is required to register as a Financial Instruments Business Operator (as a “Type II Financial Instruments Business Operator” for self-offering and “Investment Management Business Operator” for investment management).
Local finance bureaus are delegated with the authority to administer the above registration process. Usually, the applicant submits the required documents, via an attorney who is specialized in Japanese laws to the local finance bureau in advance for a preliminary review (the time required for a preliminary review differs on a case-by-case basis). After the preliminary review is completed and the required documents are formally accepted, the registration process will be completed within two months. In the registration process, the applicant is required to submit to the local finance bureau the certification documents, and the description of the funds.
If you have questions regarding the registration process, please contact Kanto Local Finance Bureau (the Local Finance Bureau in charge, if you have a physical office or an agent
in Tokyo). Kanto Local Finance Bureau will provide you necessary information on your request.

Also, please note that, the Type II Financial Instruments Business Operators are required fulfill the following requirements: i) join the industry association and abide by its self-regulatory rules, or ii) prepare in-house rules consistent with the association’s self-regulations and maintain a system to abide by the rules. The revision will also require Type II Financial Instruments Business Operators to establish a physical office or have an agent in Japan.

- Registration requirements to be an investment advisor

If a person (including entities) provides advice to his/her clients such as,

➢ Developing individualized investment portfolios for clients based on financial circumstances

Recommending diversified investment instruments

➤ Portfolio management and re-balancing

Recommending closing positions and opening new positions,

he/she is required to register as an investment advisory business. A person who receives remuneration for his/her investment advice to the customer based on the contract should be registered as an investment advisory business with the Local Finance Bureau with jurisdiction over the area where the person’s office is located.

It is required to establish an appropriate organizational structure for an Investment Advisory Business. For example, 1) the board members and executive officers should fully understand the FIEA and have enough knowledge and experience to operate a fair and appropriate investment advisory business, 2) the company should employ those who could provide investment advice based on sufficient knowledge and experience as an advisory business operator regarding securities, and 3) the company should prepare and keep books and documents.

The violation of the law in relation to investment advisory business shall be charged with imprisonment for five years at most or a fine of JPY 5 million at most, or both (FIEA Article 197 (2) (x) (d).)
ii. Prior Confirmation Procedures on the Application of Laws and Regulations (“No Action Letter” System)

The Japanese Government introduced a “no action letter” system based on March 27, 2001 Cabinet Decision entitled “Regarding the Introduction of Prior Confirmation Procedures on the Application of Laws and Regulations by Administrative Agencies.”

The Cabinet Decision stated that, “With respect to fields experiencing the risk creation of new industries and new products and services, including information technology and finance, in order to increase a private enterprise’s ability to predict whether a certain action would conflict with laws and regulations, administrative agencies will arrange so that a private-sector enterprise can inquire in advance as to the relationship between the action concerned and the provisions of certain laws and regulations. In addition, in order to ensure the fairness of administration and promote the increase of transparency, the contents of the inquiry concerned and the administrative agencies’ responses will be made public.” To this end, the Cabinet established guidelines with regard to the above fields, “...for procedures in which a private enterprise, etc. confirms in advance with the administrative agency having jurisdiction to enforce certain laws and regulations whether specific actions in connection with business activities that the enterprise, etc. seeks to realize are subject to the provisions of the regulations concerned, such agency responds, and the response is made public.”

Based on this Cabinet decision, the FSA introduced a no action letter system on July 16, 2001. The system was last revised on July 2, 2007.

This current no action letter system is detailed below.

### 1. Subject

(1) Scope of the FSA No Action Letter System

The scope of the FSA no action letter procedures covers inquiries from an individual or a private-sector enterprise subject to laws and any regulations over which the FSA has jurisdiction. The inquiries are categorized into the following patterns:

(i) Inquires where the provision concerned determines the basis for disposition of an application (this means an application as specified in Article 2, Item 3 of the Administrative Procedures Law (Law No. 88, promulgated November 12, 1993)) and the act of violating the provision concerned is subject to penal provisions; or

(ii) Inquires where the provision concerned determines the basis for identifying activities that require the notification of certain matters to administrative agencies and the act of violating the provision concerned is subject to penal provisions; or

(iii) Inquires where the provision concerned determines the basis for unfavorable disposition (this means an unfavorable disposition as specified in Article 2, Item 4 of the Administrative Procedures Law); or
(iv) Inquires where the provision concerned imposes obligations on private companies or restricts their rights directly, with or without unfavorable disposition, where the FSA finds it necessary.

## (2) Publication of Subject Laws and Regulations

The FSA maintains on its website a list of its sections and the laws and regulations for which each section has jurisdiction. The FSA revises this list to reflect recent information.

### 2. Inquiries

## (1) Contact Point for Submission

Inquiries may be submitted to the Coordination Division of the Supervisory Bureau. In cases where the inquiry is submitted to a local Finance Bureau, the Bureau will forward the inquiry to the Coordination Division of the Supervisory Bureau by fax, etc. immediately. The Coordination Division has to immediately accept the inquiry if it meets the requirements, and forward it to the section that has jurisdiction over the regulation in question.

## (2) Scope of Eligible Inquirers

The following individuals or entities may submit an inquiry to the FSA:

(i) The individual or legal entity (corporation or industry association/foundation) planning to introduce a new product or service and wishing to inquire about the applicability of the laws and regulations discussed in part 1; and

(ii) A lawyer or other specialist representing the individual or entity planning to introduce a new product or service.

In addition to submitting an inquiry that meets the requirements discussed in part 2.(3) below, an inquirer need also agree to the publication of the content of the inquiry, and the response thereto.

## (Caution)

In cases where the inquirer is a legal entity, the inquiry needs to be made in the name of an executive officer of that entity. When an inquiry is submitted by a lawyer or other specialist on behalf of a client, the inquiry needs also include the submission of a power of attorney letter. If that client is a corporation, the power of attorney needs to be made under the name of an executive officer of that entity.

An inquiry could be made in joint names of specialists and corporation. In such a case, it is not necessary to submit a power of attorney letter.

“Lawyer or other specialist” refers to lawyers, CPAs, etc. or those possessing a high level of specialized knowledge with regard to the subject of the inquiry under