EC Welcomes Japan as Latest Member of Platform on Sustainable Finance
At the November 2020 meeting of the EU-Japan Forum on Financial Regulation, EC welcomed Japan as the latest member of the International Platform on Sustainable Finance (IPSF). Meanwhile, EC and JFSA issued a joint statement providing details of this meeting. EC also announced that Japan will co-chair the newly created IPSF working group on sustainability-related disclosures, along with Switzerland and EU. At the meeting, the authorities from EU and Japan discussed the possible equivalence of the Japanese benchmark regime under the European Benchmark Regulation and shared information on various ongoing regulatory initiatives in their respective jurisdictions.
Participants at the EU-Japan Forum meeting discussed the impact of the COVID-19 pandemic as well as the related financial regulatory and supervisory responses. They discussed a number of concrete regulatory and supervisory issues, such as benchmarks, as well as enhanced cooperation in the areas of recovery and resolution and the insurance sector. EC presented a key proposal of the recent digital finance package, while JFSA presented its new policy initiatives to strengthen the functions of Japan as a global financial center. EC presented the digital finance package it adopted on September 24, 2020, in particular the legislative proposal related to crypto-assets. The introduction of a common EU framework on crypto-assets will allow for innovation in a way that preserves financial stability and protects investors. They also shared the importance of strengthening the resilience of global financial markets against stress events, such as natural disasters, through geographical diversification of financial centers.
With regard to the insurance sector, JFSA presented the state of progress on its economic-value-based solvency regulation while EC presented the upcoming review of the Solvency II framework. EC and JFSA discussed the development of their respective regulatory and supervisory initiatives in relation to financial benchmarks. Participants discussed the ongoing assessment by EC of the possible equivalence of the Japanese benchmark regime under the European Benchmark Regulation. In this respect, both parties acknowledged the importance of cross-border use of financial benchmarks and the substantial similarities of their respective rulebooks. JFSA and SRB agreed to strengthen cooperation in the area of financing toward sustainable growth. Participants agreed to engage further on the various topics discussed during the meeting as well as on other topics of mutual interest ahead of the next Forum meeting, which should take place in Brussels in 2021.
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Keywords: Europe, Asia Pacific, EU, Japan, Banking, Insurance, COVID-19, Solvency II, Sustainable Finance, ESG, IPSF, Climate Change Risk, Crypto-Asset, Recovery and Resolution, JFSA, EC
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