JPN FSA Securities Buying and Selling

On Dec. 19, JPN FSA proposed rules on lead manager appointment.

  • JPN FSA proposed revisions to Cabinet office order on financial instruments business, etc.; Cabinet office order on financial service intermediaries.
  • Cabinet office ordinance on disclosure of corporate affairs, etc.; and Comprehensive guidelines for supervision of financial instruments business operators, etc.
  • Follows JPN FSA Dec. 2023 report on asset management business, see #186527.
  • Proposed Revisions
  • Mainly involve exceptions to the ban on entrusting the buying and selling of securities on condition of the provision of credit, given Dec. 12, 2023 report's suggestion to raise the upper limit for credit card payments for cumulative investment contracts.
  • Re rules on appointment of lead manager for securities issued by parent/subsidiary companies, exempt beneficiary certificates of trusts that issue beneficiary certificates.
  • Also revise format of securities registration statements where securities company acts as lead manager for underwriting securities issued by own parent/subsidiary company.
  • Effectiveness
  • Comments on the public consultation should be received by Jan. 19, 2024.
  • Mar. 2024 Public Comments
  • On Mar. 8, 2024, JPN FSA shared 15 public comments received and its responses.
  • Clarify securities which are listed on financial instruments exchanges, based on a cumulative investment contract are allowed for the purchase by credit card payment.
  • Applicability of buying/selling securities refers to a contract to buy/sell in principle, but it will not cause a legal issue even if the total amount for securities contracted in the following month temporarily exceeds JPY 100k, unless such case violates this order.
  • Payment shall be made in a lump sum the following month, as a requirement for the exception to a ban on buying/selling of securities as a condition of credit provision.
  • The revised cabinet office order is deemed effective on Mar. 8, 2024.
  • Apr. 2024 Revisions Finalized
  • On Apr. 16, 2024, JPN FSA said that no comments on the rules on appointment of lead manager for securities issued by parent/subsidiary companies have been submitted.
  • The relevant revisions will be effective from Aug. 1, 2024, along with the guidelines.

Regulators JPN FSA
Entity Types B/D; Fiduciary; IA; Inv Co; MSB
Reference RF, PR, 4/16/2024; PS, RF, PR, 3/8/2024; CP, PR, 12/19/2023; Ord 5 of 1973; Ord 52 of 2007; Ord 35 of 2021; Ord 50 of 2023; Ord 65 of 2023; Ord 5 of 1973; FIBO;
Functions Compliance; Financial; Legal; Operations; Reporting; Risk; Sales Practices; Underwriting
Countries Japan
Products Cards; Equity; Fixed Income; Fund Mgt; Securities
Regions AP
Rule Type Final
Rule Date 12/19/2023
Effective Date 8/1/2024
Rule Id 195597
Linked to Rule :186527
Reg. Last Update 4/16/2024
Report Section International

Last substantive update on 04/18/2024