The Financial Services Agency or FSA, which is sometimes called “Kin-Sho”, is the government agency responsible for acting as an integrated financial regulator in Japan.
This organization is in charge of overseeing banks, securities firms, exchanges and the insurance sector, and it aims to promote the stability of the Japanese financial system. The FSA has a commissioner who reports directly to the Minister for Financial Services.
The FSA also oversees the Securities and Exchange Surveillance Commission, as well as the Certified Public Accountants and Auditing Oversight Board.
Background
The FSA’s precursor, the Financial Supervisory Agency, was originally established in June of 1998 to act in an administrative role under the Prime Minister of Japan with the primary goal of inspecting and supervising financial institutions operating in the private sector and monitoring securities transactions. The Financial Reconstruction Commission or FRC took over its operation in December 1998.
In July of 2000, the FSA was established under the FRC’s jurisdiction by reorganizing the Financial Supervisory Agency. It also took on the additional role of financial system planning from the Ministry of Financial.
The FRC was then disbanded in January of 2001, with the FSA surviving to become an extension of the Cabinet and also taking over responsibility for the disposition of financial institutions that had failed.
Location and Jurisdiction
Operating out of its main office located in Tokyo, Japan, the FSA is a Japanese government agency that primarily acts as an integrated financial regulator and oversees the banking, securities, insurance and exchange sectors. The FSA’s operational jurisdiction is situated within the borders of the sovereign nation of the State of Japan.
The FSA’s official website is located at http://www.fsa.go.jp/ for the Japanese version or http://www.fsa.go.jp/en/index.htm for the English version.
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Responsibilities
In Japan, the FSA takes responsibility for making sure the Japanese financial system remains stable and yet adapts to necessary changes. It also plays a key role in developing the national economy and promoting fair and efficient markets. The FSA also protects those who make deposits, as well as those who take out insurance policies and invest in financial securities.
The FSA performs its role by planning and making policy for the Japanese financial system. It also inspects and supervises financial institutions operating in the private sector, as well as keeping track of securities deals.
According to an official document posted on its website, the items the FSA manages within Japan include:
- Planning and making policy that relates to the Japanese financial system.
- Inspecting and supervising financial institutions in the private sector, which would include banks, Financial Instrument Business Operators, financial market participants, financial exchanges, and insurance companies.
- Establishing rules for making transactions in financial markets.
- Establishing standards for businesses accounting and corporate finance.
- Supervising certified public accountants and firms that perform accounting audits.
- Participating in events on financial issues put together by international organizations and bilateral and multilateral meetings on financial topics to develop consistent financial administrative practices on an international level.
- Performing market surveillance to assure compliance with rules among participants.
FSA in the News
A link to a report by the Working Group on Financial Markets under the Financial System Council entitled: “Initiatives toward Stable Asset Building and the Development of Institutional Systems related to Markets and Exchanges” and dated December 22nd, 2016.
https://www.fsa.go.jp/en/refer/councils/singie_kinyu/20170509/03.pdf
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