Japan FSA to cater to Foreign Asset Managers in English
In a press release on Friday, November 6, the Japan Financial Services Agency (FSA), the financial services regulator, announced measures to promote the use of English and establishing a single point of contact for foreign asset management firms.
Since publication of the “Global Financial City Tokyo” strategy paper (focusing specifically on attracting asset managers and FinTech firms) in late 2017, there has been a somewhat disjointed effort by the Tokyo Metropolitan Government (TMG), the Cabinet Office and the FSA to re-establish Tokyo as a major financial hub. There are now early signs that this will turn into a coordinated, multi-pronged strategy that addresses a number of obstacles. According to a statement we received, …
“The FSA is making its utmost effort to improve the business environment in Japan for foreign asset managers.
The language issue constitutes only part of our strategy. The FSA and the government as a whole will continue to address other issues, for example, taxation, human capital, business environment, and other administrative services in English to support the new entry of asset management firms to the Japanese market.”
Concerns that the community has expressed previously include taxation, both corporate and personal income taxes, as well as only recently passed amendments to inheritance tax that has led to a number of senior figures leaving the country. Another, seemingly trivial gripe is the visa arrangement for domestic helpers for those used to taking advantage of cheap labor available in Hong Kong and Singapore. Lastly, international Chambers of Commerce have critiqued the treatment of residents (vis-a-vis Japanese citizens) for re-entry into the country during the pandemic. So there remains quite a bit of work to do.
Regardless, to summarize the two key building blocks in the announcement:
- A Financial Market Entry Office will be established in January 2021 by incorporating staff from relevant sections within the FSA and Local Financial Bureaus (LFBs). The Office will become a single point of contact for newly entering asset management firms for pre-application consultation, registration, and supervision. Online communications will be supported in such forms as video conferences without meeting in-person. The Office is expected to accelerate the registration process for newly entering asset management firms by lowering language barriers.
- The FSA launched a public consultation on an amendment to the relevant Cabinet Office Order and Ordinance and new regulatory notices (collectively, ‘proposed amendment’). The proposed amendment will be effective from January 2021 and allow foreign asset management firms and other eligible financial business operators to complete the registration process in English for designated types of business. It will also allow them to prepare documents in English which are required to be submitted to JFSA in the course of the business after the registration under the Financial Instruments and Exchange Act (FIEA).
Please also note that previously, the FSA had already published a “Guidebook for the Registration of Investment Management Business and Other Financial Instruments Businesses” in English.
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