JAPAN Law and Practice Contributed by: Ken Kawai, Shunsuke Aoki, Takeshi Nagase and Keisuke Hatano, Anderson Mori & Tomotsune
the sale, purchase or handling of a public offer - ing of tokenised securities must be registered as
under traditional finance regulations are also applicable to fintech services. 2.4 Variations Between the Regulation of Fintech and Legacy Players There are no specific regulatory incentives appli - cable to fintech companies. Fintech companies are on equal footing with legacy players. 2.5 Regulatory Sandbox The Japanese regulatory sandbox was intro - duced in June 2018 and can be used by both Japan residents and overseas companies. It enables companies to apply and receive approv - al for innovative and new projects and services that are not yet contemplated under current regulations without the need for amendment of existing regulations. Approved projects may not be carried out as a business but rather as a proof of concept or demonstration under certain conditions, including limitations on the number of participants and duration of operations. There are no limitations on the business sectors that can benefit from the sandbox. 2.6 Jurisdiction of Regulators The main regulatory body for fintech businesses is the FSA, including the local finance bureaus to which it has delegated certain aspects of its authority. The Ministry of Economy, Trade and Industry (METI) has jurisdiction over credit cards and instalment payments. The Ministry of Land, Infrastructure, Transport and Tourism has juris - diction over some types of real estate fund busi - nesses. The NPA, FSA and Ministry of Finance have co-jurisdiction over matters of AML/CFT. The Personal Information Protection Committee is the prime regulator of personal information. However, the FSA shares regulatory power over the protection of personal information in the financial sector.
a Type 1 FIBO. Robo-Advisers
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 dis - cretionary investment management services); or • an investment adviser (for provision of non- discretionary investment advisory services). Open Banking/Electronic Payment Intermediate Service Providers 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 provid - ers 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 Instruments (ASFI), which was later renamed “the Act on Development of Specified Integrated Resort Districts” , was amended to enable the establishment of financial services intermediary businesses that are capable of intermediating the cross-sectoral banking, securities and insur - ance financial services under a single licence. 2.3 Compensation Models There are no regulations specifically targeting fintech companies in connection with compen - sation models. The compensation restrictions
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