Featured Product

    BOJ and JFSA Publish Regulatory Updates for Financial Sector Entities

    June 08, 2022

    The Financial Services Agency of Japan (JFSA) published draft amendments to, among others, the comprehensive guidelines for supervision of "cooperative" as well as small- and medium-size and regional financial institutions. JFSA also published English translation of the comprehensive guidelines for supervision of banks, along with the English translation of the frequently asked questions on guidelines on anti-money laundering and combating the financing of terrorism (AML/CFT). Another Japanese regulatory, the Bank of Japan (BOJ), published a paper on JPY LIBOR transition as well as results of the “Proof of Concept Phase 1” of the central bank digital currency (CBDC) experiments.

    Below are key details of the recent updates:

    • JFSA is consulting on draft amendments to the "Comprehensive Guidelines for Supervision of Small- and Medium-Sized and Regional Financial Institutions," "Comprehensive Guidelines for Supervision of Cooperative Financial Institutions," and other comprehensive guidelines. The key amendments relate to key performance indicators for ensuring the implementation of the corporate borrowers' business strengthening plans, firewall regulations on sharing corporate clients' non-public information held by a listed company, and screening/evaluation criteria and approach for approval of establishment of subsidiaries. JFSA is requesting comments until July 07, 2022.
    • A BOJ paper on JPY LIBOR transition briefly reviews the events leading up to the cessation of LIBOR publication and focuses on responses to the transition away from JPY LIBOR in the Japanese financial markets. The paper also summarizes the initiatives to achieve a smooth transition and explains points to note and medium- to long-term efforts to be made. Going forward, it will be required to complete the transition of a small number of contracts—for which the transition away from JPY LIBOR had not yet been completed—as soon as practicable, before the next revision of interest rates. In addition, when using synthetic yen LIBOR, the transition to an alternative interest rate benchmark needs to be proceeded in a planned manner, given that the synthetic yen LIBOR is being published only for one year, until the end of December 2022.
    • The Payment and Settlement Systems Department of BOJ conducted, from April 2021 to March 2022, the Phase 1 Proof of Concept on CBDC. The aim was to build an experimental environment centered around a “CBDC ledger” as the foundation of a CBDC system and evaluate whether the basic transactions relating to a CBDC (issuance, payout, transfer, acceptance, redemption, etc.) could be processed appropriately. To achieve these objectives, BOJ posted three design alternatives for CBDC ledgers in a public cloud. While considering the requirements of introducing a CBDC in the future, the regulator then compared and evaluated each design through experimental work and architecture evaluation for its system processing performance, reliability, and ease of extension. The results of the experimental work showed performance considerations in all three design alternatives. BOJ believes that issues arising from the differences among the design alternatives may change as needed functions are added to the CBDC ledger system or as systems outside the ledger are built. For this reason, the Proof of Concept Phase 2 will explore in more depth technical considerations involved in a production-ready system. In doing so, BOJ intends to build on the CBDC ledger systems developed in Phase 1 into more complex additional functions and explore their technical feasibility as well as their possible impact on processing performance.


    Keywords: Asia Pacific, Japan, Banking, Comprehensive Guidelines, FAQ, AML CFT, LIBOR, Interest Rate Benchmark, Benchmark Reforms, CBDC, Regtech, BOJ, JFSA

    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    News

    FASB Proposes Improvements to 2023 GAAP Reporting Taxonomy

    The Financial Accounting Standards Board (FASB) is seeking comments, until November 03, 2022, on the proposed technical and other conforming improvements for the 2023 GAAP Financial Reporting Taxonomy.

    November 03, 2022 WebPage Regulatory News
    News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News
    News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8588