JAPAN Law and Practice Contributed by: Ken Kawai, Shunsuke Aoki, Takeshi Nagase and Keisuke Hatano, Anderson Mori & Tomotsune
8.2 Treatment of Different Types of Insurance In Japan, no distinction is made between different types of insurance in terms of their treatment by the regulators.
exchange or proprietary trading system (PTS) via a method used to shorten the time typically required for that communication. A trader engaging in HST is required to register as a high-speed trader and establish an operational con - trol system, manage risks, and provide certain infor - mation relating to that trading to the FSA. However, simply developing or creating trading algorithms or other electronic trading tools is not regulated under the FIEA. 7.2 Requirement To Be Licensed or Registered as a Market Maker When Functioning in a Principal Capacity There is no such requirement under the FIEA. 7.3 Regulatory Distinction Between Funds and Dealers HST regulations under the FIEA are principally appli - cable to traders (including funds) – although certain reporting requirements are also applicable to dealers (ie, financial instruments business operators regis - tered under the FIEA) when the dealers are engaging in proprietary trading. A financial instruments business operator may not accept HST orders from: • a trader who is not registered pursuant to the FIEA; or • a registered trader for which the financial instru - ments business operator is unable to confirm the appropriate trading system management has been implemented. 7.4 Regulation of Programmers and Programming There is no such regulation under the FIEA (see 7.1 Creation and Usage Regulations ).
9. Regtech 9.1 Regulation of Regtech Providers
There is no regulation in Japan that relates specifically to providers of regtech. Accordingly, such providers are regulated under the existing legal framework, depending on their activities. Regtech is not yet prevalent in Japan; however, the FSA officially announced in its Assessments and Stra - tegic Priorities for 2018 that it would enhance regtech and suptech (supervisory technology) in Japan. One legislative change in this area was the 2018 amend - ment of the subordinate regulations of the APTCP in order to provide for various methods by which e-KYCs may be conducted in Japan. 9.2 Contractual Terms to Ensure Performance and Accuracy There have not been many cases in which financial institutions have used regtech services. In addition, there are no laws and regulations or indus - try practices that require financial institutions to stipu - late a clause in their contracts with service providers that assures the accuracy of services provided when using a regtech service. 10. Blockchain 10.1 Use of Blockchain in the Financial Services Industry In connection with the use of blockchain technology, the most significant developments in the traditional financial service industry have been those relating to digital securities, NFTs and stablecoins. The new regulatory framework has clarified the man - ner of application of regulations on digital securi - ties (as described in 10.4 Regulation of “Issuers” of Blockchain Assets ). As a result, a considerable num -
8. Insurtech 8.1 Underwriting Processes
In Japan, when a company (including fintech compa - nies) engages in insurance solicitation (ie, acts as an agent or intermediary for the conclusion of insurance contracts), it must be registered as an insurance agent or insurance broker under the Insurance Business Act.
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