JAPAN Law and Practice Contributed by: Ken Kawai, Shunsuke Aoki, Takeshi Nagase and Keisuke Hatano, Anderson Mori & Tomotsune
2.2 Regulatory Regime Apart from the regulations applicable to CAES and EPI services, there is no specific regulatory framework for fintech businesses. If the services provided by the fintech companies are subject to existing financial regulations, such as obtaining applicable authorisa - tion (licences or registrations), then they are required to comply with them. What follows is a high-level out - line of the regulations that apply to popular fintech services. Online/Mobile Payment Although there are many payment methods and instru - ments in Japan, there is no comprehensive payment law. A prepaid payment instrument (PPI) is an instrument that records a certain value charged in advance of its use and is then debited as payment of consideration for goods and/or services. PPIs are regulated under the PSA. Instalment payments made in consideration for goods or services that are divided over two months or more are regulated under the Instalment Sales Act (ISA). The ISA substantially covers all credit card payments and “buy now pay later” (BNPL) services. Remittance or money transfer is regulated pursuant to the Banking Act and the PSA. The PSA classifies fund transfer services (FTS) into the following three categories: • FTS involving remittances exceeding JPY1 million per transaction; • FTS that correspond to the current classification of FTS in the PSA; and • FTS involving remittances of small amounts (ie,
Crypto-asset derivatives are regulated as financial derivatives under the FIEA. A company that provides crypto-asset derivatives products has to undergo reg - istration as a Type I Financial Instruments Business Operator (Type I FIBO). Digital Securities Amendments to the FIEA that came into effect in May 2020 introduced a new regulatory framework for the transfer of securities via electronic data processing systems. An issuer of tokenised securities is, unless exempt, required to file a securities registration state - ment and issue a prospectus upon making a public offering or secondary distribution. Any person who engages in the sale, purchase or handling of a public offering of tokenised securities must be registered as Under the FIEA, a robo-adviser that provides users with automated access to investment products must be registered as: • an investment manager (for provision of discretion - ary investment management services); or • an investment adviser (for provision of non-discre - tionary investment advisory services). Open Banking/Electronic Payment Intermediate Service Providers a Type I FIBO. Robo-Advisers Entities that act as intermediaries between banks and customers – for example, by using IT to communicate payment instructions to banks based on entrustment from customers or by using IT to provide customers with information regarding their financial accounts deposited in banks – are categorised as EPI service providers under the Banking Act and are required to register with the FSA. Financial Services Intermediary Businesses In June 2020, the Act on Sales, etc, of Financial Instru - ments (ASFI), which was later renamed “the Act on Development of Specified Integrated Resort Districts”, was amended to enable the establishment of finan - cial services intermediary businesses that are capable of intermediating the cross-sectoral banking, securi - ties and insurance financial services under a single licence.
several tens of thousands of yen). Services Related to Crypto-Assets
CAESPs are regulated under the PSA. Most of the so-called payment tokens and utility tokens would fall within the definition of a crypto-asset. Those who pro - vide CAES (or custody services thereof) must register with the FSA.
437 CHAMBERS.COM
Powered by FlippingBook