Canada    FinTech Guide    Chapter 4    Japan


4. Trading Platforms / Social Trading Platforms / Signal Following
Japan  Japan

It is a new business model in Japan. As many Japanese people with no experience in investment seem to have concerns for possible decrease in their assets and a vague image of difficulty and complexity in investment rather than its advantages, we should say that this new business model is accepted by investors who wish to attain high performances with less work.



Legal Affairs


If a FinTech falls under any of the following categories, it must be registered with the relevant supervisory authority and becomes subject to the regulation for the relevant business:

  • Type I or Type II Financial Instruments Business
  • Financial Instruments Intermediary Service
  • Investment Advisory Business:
  • Investment Management Business

Also, in the case of SNS operation, notification to the Minister of Internal Affairs and Communication may become necessary under the Telecommunications Business Act.

When providing and receiving information on the Internet, it is necessary to comply with the requirements concerning notification, etc. of purpose of use and restrictions on the provision of information to third parties under the Personal Information Protection Act.



Economic Conditions


In Japan, there exist "copy trade type" social trading services for FX and binary options provided by TRADERS SECURITIES CO., LTD. and other similar services; however, this form of business is under development and there is no form of business that has succeeded in producing profit yet.



Miscellaneous


Spread of rumors, market manipulation and the like are prohibited in the transactions of securities, derivatives, etc. (Financial Instruments and Exchange Act ("FIEA"), Art. 159, para. (2), items (ii) and (iii)). In addition, when a person indicates to the public an opinion which would convey his or her decision regarding investment in securities, etc. in exchange for consideration received from the issuers, etc., such a person shall also indicate the existence of such consideration (FIEA, Art. 169). As these regulations apply to FinTechs belonging to this category as well, they need to pay attention not to violate these regulations and they also need to be careful in drafting the terms of service and in the operation of services so that users do not commit any violation. As this form of business requires capital strength, there is a possibility that existing financial institutions will participate in this business just like overseas trends, although it is also possible for venture businesses to provide these services.



Contributing Authors

Ushijima & Partners

Hiroyasu Kageshima
Tokyo, Japan

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Chapter Index:


1. Payment Services / Mobile Payment

2. Asset and Portfolio Management

3. Consulting and Broking Services / Robo-advisory / Auto-trading

4. Trading Platforms / Social Trading Platforms / Signal Following

5. Crowdfunding / Crowdinvesting / Crowdlending

6. Virtual Currency - Bitcoin

7. Loan Services / Factoring / Loan Broking / Finetrading

8. Online Banking Services

9. Analytics and Research / Data Management / Risk Management

10. Accounting

11. Identification

12. Online-pawning

13. InsurTech

14. RegTech

15. Initial Coin Offerings (ICOs)

Disclaimer:
The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: 1 May 2018