Download regulatory environment in Japan

 Regulatory compliance
monitors regulatory dynamics internationally. We work locally with leading partner firms and other 3rd parties, and also directly ‐ where appropriate ‐ in order to provide expert service to the local banking community. JAPAN Capital Currency Language Population GDP Nominal Purchase power parity Real growth rate Government Legislature Geographical area Economy Corruption perception rating / worldwide ranking Points of interest Tokyo Yen (¥) Japanese 127,799,000 $5.869 trillion $4.440 trillion ‐0.7% Unitary Parliamentary Democracy and Constitutional Monarchy National Diet 145,925 sq. miles | Eastern Asia, island chain between the North Pacific Ocean and the Sea of Japan, east of the Korean Peninsula Japan’s economy stands as the 4th
largest in the world and is the 5th largest importer and exporter in the world. GDP ‐ composition by sector: Agriculture: 1.2% | Industry: 27.3% | Services: 71.6% (2011 est.). Imports and exports rank 28th and 27th in the world. The regulatory environment in Japan has to respond to the changing local economic conditions and Lombard Risk will respond accordingly to growth in reporting requirements. Lombard Risk REPORTER for regulatory compliance Lombard Risk business and regulatory compliance experts explain: regulatory environment in Japan 8 [10 good – 0 bad] / 14th Honshū's Greater Tokyo Area, which includes Tokyo and several surrounding prefectures, is the largest metropolitan area in the world. Persistent deflation, reliance on exports to drive growth, and an aging and shrinking population are other major long‐term challenges for the economy. Japan accounts for nearly 15% of the global fish catch. Japan is a world leader in fundamental scientific research, having produced 15 Nobel laureates. Japan has the 2nd highest life expectancy of any country in the world. According to the United Nations, Japan also has the 3rd lowest infant mortality rate. Banks’ regulators Japan’s banks are regulated by the Japan Financial Services Agency (JFSA) and the Bank of Japan (BOJ). JFSA’s main role is to oversee and regulate banking, securities and exchange, and insurance firms in order to ensure the stability of the financial system of Japan. The agency reports to the Japanese Minister of Finance and oversees the other Japanese regulatory agencies such as the Securities and Exchange Surveillance Commission (SESC). BOJ’s main roles are the issuance and management of currency; the implementation of monetary policy and providing settlement services. Japan has already integrated Basel 2.5 into its financial system and hence is in a good position to implement Basel III. Public consultation on Basel III happened in early 2012 and drafts and final rules have been published. Basel III in Japan will be implemented in March 2012 (the fiscal year for banks in Japan starts in April and ends in March). Regulatory compliance
Investment firms’ regulators Bank composition Japan’s investment firms are regulated by the Securities and Exchange Surveillance Commission (SESC). It comes under the authority of the JFSA. Its role is to: Ensure fair transactions in both securities and financial futures markets The SESC’s objectives include: Market surveillance Compliance inspection Disclosure document inspection The SESC has received criticism for its lack of staff (697 compared to 3100 at US SEC) and power (cannot punish those who violate the law or regulations, it reports its findings to the cabinet, prosecutors and JFSA with recommendations). Inward FDI in Japan is very low; the rate of FDI penetration as measured by the share of the stock of inwards FDI in GDP at 2.5% is one of the lowest in the world. Japan’s highly complicated regulatory environment, high costs and traditional resistance to foreign ownership of Japanese companies make it a difficult country to invest in. Insurance firms’ regulators Japan’s insurance firms are regulated by JFSA. Its roles are to: Improve the quality of financial regulation Ensure customers can claim efficiently and effectively Japan’s insurance firms have had a hard time recently, with catastrophic earthquakes and tsunamis putting a large strain on firms as well as claimants. During this time the JFSA also had assistance from the General Insurance Association of Japan (GIAJ) which is a trade association representing licensed general insurance companies in Japan. Main regulators Current chairman Tadahiro Matsushita Previous chairman Address Shozaburo Jimi (2011) Website http://www.fsa.go.jp/en/index.html http://www.boj.or.jp/en/ 3‐2‐1 Kasumigaseki Chiyodaku Tokyo, 100‐8967 Japan GDP Growth (%) of Japan and comparisons The JFSA was established in the year 2000 by the Financial Reconstruction Commission (FRC). As a result of the reorganization of central government ministries, the FSA became an external organ of the Cabinet Office in 2001. Its main functions are: Planning and policymaking concerning the financial system Inspection and supervision of private sector financial institutions, including banks, securities companies and insurance companies, as well as market participants, including securities exchanges Establishment of rules for trading in securities markets Establishment of business accounting standards and others concerning corporate finance Supervision of certified public accountants and auditing firms Participation in activities of international organizations Surveillance of compliance of rules in securities markets Regulatory compliance
The JFSA requires reports such as: Balance Sheet reporting P&L reporting Capital Adequacy reporting Business summary of foreign bank branch reporting Newspaper publication reporting Investment position reporting The BOJ was founded in 1882 and has since been partly privately owned. It was given monopoly over the money supply in 1884 and started issuing its own currency in 1904. Its main functions are: Issuance and management of currency Implementation of monetary policy Providing settlement services and ensuring the stability of the financial system Treasury and government securities‐related operations International activities Compilation of data, economic analyses and research activities Lombard Risk’s REPORTER keeps pace with regulatory requirements, automating end‐to‐end from data collection to electronic output, so giving you the ideal solution for all automated regulatory reporting requirements. With full support for key supervisory computations and powerful workflow, status dashboards, graphical presentation of trends and validations, REPORTER delivers huge savings in time and effort, reduces operational risk, and delivers significantly improved management information and management oversight. Basel III, EBA / European common reporting – COREP and FINREP – and transaction reporting Regulatory computation from raw data with comprehensive Capital, Liquidity and Large Exposures engines as well as detailed statistical computations Automation of regulator‐mandated and client‐defined validation rules Support for all transmission requirements including XBRL, XML and proprietary formats Powerful data management functionality overcomes The Data Problem: fully automated cleansing, consolidation and normalisation of multiple data sources irrespective of data format Automated Straight‐Through‐Processing (STP) enables exception‐based management, ensuring regulatory reporting is automated unless manual intervention is needed Workflow automation job‐streams your production process enabling sign‐off dependencies to be achieved under strict timetable conditions Full security for all processes Trends and Variance analysis provides automated drill‐
down comparison tools, significantly accelerating review, reconciliation and sign‐off. Regulators’ enquiries are anticipated and easily answered For more information on any of these topics visit www.lombardrisk.com and/or email [email protected] October 2012