making inquiries as to whether or not a certain person is an anti-social force and the National Police Agency’s database were connected with each other to check whether or not members’ new customers are anti-social forces. The Japan Securities Dealers Association also strives to ensure smooth and appropriate system operation by conducting training for members concerning the inquiry service using the system and conducting onsite inspection of the members’ operation.

In terms of internal systems, the Japan Securities Dealers Association also established the "Rules regarding Severing Relationships with Anti-social Forces" in May 2010, obligating each member to 1) introduce articles regarding assurance by customers "that they are not an anti-social force" when opening a new securities account, 2) introduce articles regarding elimination of anti-social forces in their transaction clauses etc., 3) screen new and existing customers, and 4) ban the conclusion of contracts with anti-social forces. Following the partial amendment of the Act on Prevention of Transfer of Criminal Proceeds in 2011, the Association revised the "FAQ concerning the Act on Prevention of Transfer of Criminal Proceeds and Related Cabinet Orders and Ministerial Ordinances" in August 2012 and "Members' Concept of Reporting Suspicious Transactions" in March 2013, and in response to the partial amendment of said Act in 2014, revised the FAQ again in May 2016. In this manner, the Association has endeavored to raise members' awareness about actions to be taken based on the amendment of said Act.

## 8 Moneylending Industry

Japan’s moneylending industry has a self-regulating body called the “Japan Financial Services Association.” In efforts to prevent ML/TF and damages caused by anti-social forces, the Association implements voluntary regulations providing that relevant items should be added to internal regulations which refer to the key to internal control by members. In addition, members are provided with reference materials such as guidelines or “model regulations.” These guidelines show specific examples of relevant items to be included. Moreover, to ensure effective voluntary regulation, members were inspected on the full body of their internal regulations in FY2011, and guidance and instruction were provided where any deficiency was found. As a result, all members have now devised compliant regulations.

In September FY2011, a Boryokudan exclusion clause was added to contract formats sold to members, and the revised format was posted on the Association’s website, enabling all moneylending businesses to view these materials, and encouraging to adopt said clause in moneylending business. In addition, the Association also notes information on preventing ML/TF and damage caused by anti-social forces on the Association’s website in order to familiarize association members with these issues.

The Association conducts inspections on both document-based and onsite-based. The Association audits member company compliance by assessing how well internal systems are established based on the directive entitled “Preventing Damages Caused by Money Laundering, Terrorist Financing, and Anti-social Forces” provided in the internal regulations.

In FY2014, in light of the revision of the Financial Services Agency’s “Comprehensive Guidelines for Supervision of Money Lenders” (hereinafter referred to as the “Guidelines for Super-