Featured Product

    JFSA Updates Address Crypto-Asset and ESG Investment Guidelines

    December 19, 2022

    The Financial Services Agency of Japan (JFSA) is seeking comments, until January 27, 2023, on the proposed partial amendments to the comprehensive supervisory guidelines for financial instrument business operators regarding environmental, social and governance (ESG) investment trusts, finalized the Code of Conduct for ESG evaluators and data providers, established a working group to facilitate efforts toward the decarbonization of economy, and published a guideline for supervision of crypto-asset exchange service providers. The guideline on crypto-assets explains the scope of covered crypto-assets and the related applicability criteria, in addition to the supervisory approach and measures.

    JFSA recently proposed changes to the guidelines for ESG investment management business. JFSA conducted a survey of 225 publicly offered investment trusts managed by 37 asset managers in Japan and identified seven expectations for asset management companies managing ESG investment trusts. Based on these seven expectations, JFSA is proposing revisions to the "comprehensive supervisory guidelines for financial instruments business operators to define specific points for supervisors to check disclosure of information on publicly offered investment trusts and organizational resources and due diligence of asset managers regarding ESG." The proposal document states that, among others, where an ESG investment trust has a target or guideline ratio of investments (on a market value basis) that are selected by ESG as a main factor out of its net asset value, or where it has other target or guideline indicators for evaluation of key ESG factors in the investment strategy, supervisors will check whether the ratio or other figures is disclosed in the "Objective and Characteristics of the Fund" section of the delivery prospectus. When ESG ratings provided by a third party are used in the investment process of publicly offered investment trusts, or when data provided by a third party is used in own ESG assessment by an investment trust management company, supervisors will check whether the investment management trust company conducts appropriate due diligence, which could include an understanding of its organizational resources, what is being rated or assessed by its product, how it is being rated or assessed, and limitations and purposes for which its product is being used.

    Another related development involves the publication of the final Code of Conduct for ESG evaluators and data providers. This Code of Conduct is designed to be a voluntary code on a “comply or explain” basis, where JFSA calls for organizations to express their support for the Code via public announcement and the organizations supporting the Code will either comply with the principles and guidelines of the Code or explain the reasons why they do not comply with a particular principle or guideline. When implementing the principles or guidelines of the Code, it is important to provide easy-to-understand explanations so that readers can understand the status of compliance with each item of the principles and guidelines. Based on the received notifications of endorsement of the Code of Conduct from evaluation organizations, JFSA will publish the list of status of endorsement of the Code of Conduct by June 2023 and the status of endorsement regarding data provision by June 2024.


    Keywords: Asia Pacific, Banking, Regtech, Climate Change Risk, Japan, Sustainable Finance, Code of Conduct, Securities, ESG, Data Providers, Low-Carbon Economy, Crypto-Assets, JFSA

    Featured Experts
    Related Articles

    FINMA Approves Merger of Credit Suisse and UBS

    The Swiss Financial Market Supervisory Authority (FINMA) has approved the takeover of Credit Suisse by UBS.

    March 21, 2023 WebPage Regulatory News

    BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks

    The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.

    March 13, 2023 WebPage Regulatory News

    OSFI Finalizes on Climate Risk Guideline, Issues Other Updates

    The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.

    March 12, 2023 WebPage Regulatory News

    APRA Assesses Macro-Prudential Policy Settings, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) published an information paper that assesses its macro-prudential policy settings aimed at promoting stability at a systemic level.

    March 07, 2023 WebPage Regulatory News

    BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending

    BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.

    March 03, 2023 WebPage Regulatory News

    HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks

    The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.

    March 02, 2023 WebPage Regulatory News

    MFSA Sets Out Supervisory Priorities, Issues Reporting Updates

    The Malta Financial Services Authority (MFSA) outlined its supervisory priorities for 2023

    March 02, 2023 WebPage Regulatory News

    German Regulators Issue Multiple Reporting Updates for Banks

    Deutsche Bundesbank published the nationally deactivated validation rules for the German Commercial Code (HGB) users on the taxonomy 3.2, which became valid from December 31, 2022

    March 02, 2023 WebPage Regulatory News

    BCBS Report Examines Impact of Basel III Framework for Banks

    The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.

    February 28, 2023 WebPage Regulatory News

    PRA Consults on Prudential Rules for "Simpler-Regime" Firms

    Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.

    February 28, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8806