JFSA Regulatory Updates

What Changed

• - Japan has finalized a partial amendment to the list of designated countries/regions under Articles 17-2 and 17-3 of the Order for Enforcement of the Act on Prevention of Transfer of Criminal...
• The amendment expands the set of foreign jurisdictions for which Japanese firms must apply travel rule obligations when transferring cryptoassets and electronic payment instruments to foreign VASPs,...
• For transfers of cryptoassets and electronic payment instruments from Japanese VASPs to foreign VASPs, travel rule obligations apply only when the counterparty VASP is located in a jurisdiction...
• Transfers to foreign VASPs in non-designated jurisdictions remain outside the Japanese travel rule transmission obligation, reflecting JFSA’s concern about regulatory ineffectiveness where equivalent...
• The amendment confirms that the travel rule applies to both cryptoassets (virtual assets, VAs) and electronic payment instruments, including stablecoins (SCs) handled by Cryptoasset Exchange Service...

Suggested Considerations

• Review and obtain the official Attachment to identify the five newly added jurisdictions and verify their exact legal names and any specific conditions attached to their designation.
• Update internal jurisdiction lists and travel rule mapping to reflect all currently designated countries and regions under Articles 17-2 and 17-3, including the newly added five jurisdictions, ensuring that this mapping is embedded in transaction routing and screening engines.
• Revise travel rule implementation procedures so that originator and beneficiary information is consistently transmitted for all transfers of cryptoassets and electronic payment instruments from Japanese VASPs to foreign VASPs located in designated jurisdictions, including the new additions.
• Confirm that no de minimis threshold is applied in practice to covered transactions and that systems are configured to send travel rule data regardless of transaction size when the counterparty is in a designated jurisdiction.
• Update customer and counterparty onboarding documentation and contractual terms for foreign VASPs in newly designated jurisdictions to reflect their status as travel rule counterparties and any data-sharing, security, and retention requirements.

Key Dates

References

• [1] notabene.id/world/japan
• [2] sygna.io/blog/japan-travel-rule-starts-1-june-an-in-depth...
• [3] innreg.com/blog/crypto-travel-rule-guide
• [4] fsa.go.jp/en/newsletter/weekly2024/573_1.pdf
• [5] elliptic.co/blockchain-basics/what-is-the-travel-rule
• [6] sumsub.com/blog/what-is-the-fatf-travel-rule/
• [7] bitflyer.com/en-jp/faq/5-20

What Changed

• The draft revisions introduce several substantive modifications to Japan's corporate governance framework:
• Resource Allocation Focus: Boards must continuously examine whether management resources (cash, deposits, real estate, and other assets) are allocated appropriately, with emphasis on growth...
• Principles-Based Streamlining: The code has been streamlined to adopt a more principles-based approach, moving from form to substance and reducing prescriptive requirements.
• Collective Engagement Promotion: The revisions aim to promote collective and collaborative engagements among investors, strengthening dialogue between companies and investors.
• Beneficial Shareholder Transparency: Enhanced transparency requirements regarding the identification of beneficial shareholders.

Suggested Considerations

• *For Listed Companies:
• *Immediate (by May 15, 2026): Review the draft revisions (Materials 1 and 2) and consider submitting comments during the public consultation period if your organization wishes to influence final provisions.
• *Pre-Implementation (Summer 2026): Conduct a comprehensive gap analysis comparing current governance practices against the draft requirements, particularly regarding:
• Board processes for examining resource allocation decisions
• Documentation of investment policy rationale

Key Dates

References

• [1] fsa.go.jp/en/news/2025/20250321-2/02.pdf
• [2] nbim.no/en/news-and-insights/consultations/2025/japan-fin...
• [3] nippon.com/en/news/yjj2026040300885/
• [4] jpx.co.jp/english/equities/listing/cg/04.html
• [5] fsa.go.jp/en/refer/councils/revision_corporategovernance/...
• [6] fsa.go.jp/en/news/2026/20260327.html
• [7] acga-asia.org/blog-detail.php?id=106
• [8] japantimes.co.jp/business/2026/02/15/governance-code-grow...

What Changed

• The Version 1.1 update reflects a stakeholder-informed evolution rather than a complete regulatory overhaul:
• Incorporation of industry feedback: The revision integrates insights from the FSA AI Public-Private Forum discussions on AI utilization status, risk management practices, and regulatory application...
• Expanded scope: The paper now addresses "a broad range of related issues" beyond the initial Version 1.0 framework, reflecting emerging challenges identified through industry dialogue
• Preliminary guidance framework: The document provides initial guidance on current state assessment and challenge identification, explicitly acknowledging that technological advancements may alter...
• Regulatory clarity initiative: The paper addresses "situations that require clarification on how regulations apply" to AI implementations, signaling the FSA's intent to reduce regulatory ambiguity...

Suggested Considerations

• *Immediate (for compliance and risk teams):
• *Obtain and review the full AI Discussion Paper (Version 1.1) (available as Attachment 1 from the FSA website)
• *Assess current AI implementations against the preliminary discussion points outlined in the paper
• *Identify regulatory gaps in existing AI governance frameworks relative to FSA expectations
• *Short-term (30-90 days):

Key Dates

References

• [1] fsa.go.jp/en/news/2026/20260303/aidp.html
• [2] fsa.go.jp/en/news/2025/20250304/aidp.html
• [3] practiceguides.chambers.com/practice-guides/comparison/99...
• [4] ibanet.org/medias/anlbs-ai-working-group-report-feb-2026....
• [5] ai.gov.eg/SynchedFiles/en/Resources/Global%20AI%20Governa...
• [6] takeyourai.com/japan-ai-regulation-news-today/
• [7] oecd.org/content/dam/oecd/en/publications/reports/2026/01...