Comprehensive Guidelines for Investment Management-Related Service Entrusted Business Operators

October 2025Financial Services AgencyComprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.(Supplementary Guidelines)Guidelines for Investment Management-Related Service Entrusted Business OperatorsComprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.(Supplementary Guidelines)Guidelines for Investment Management-Related Service Entrusted Business OperatorsⅠ. Basic ConceptⅠ-1 Basic Concept for Supervision of Investment Management-Related Service Entrusted Business Operators ··············································································· 1Ⅰ-2 Purpose of Establishment of the Guidelines for Supervision ································ 3Ⅱ. Points of Attention in the Conduct of Administrative Processes Regarding the Supervision ofInvestment Management-Related Service Entrusted Business Operators ························· 4Ⅲ. Supervisory Evaluation Points and Various Administrative ProceduresⅢ-1 Governance························································································ 5Ⅲ-2 Appropriateness of Business Operations······················································· 6Ⅲ-2-1 Development of Operational Control System ········································ 6Ⅲ-2-2 Prohibition of Subcontracting ·························································11Ⅲ-2-3 Supervisory Method and Actions ·····················································12Ⅲ-3 Various Administrative Procedures ···························································13Ⅲ-3-1 Registration ·············································································13Ⅲ-3-1-1 General Administrative Procedures for Registration ······················13Ⅲ-3-1-2 Examination Items·····························································17Ⅲ-3-2 Notification··············································································20Ⅲ-3-3 Preparation and Preservation of Records ············································21- 1 -Ⅰ. Basic ConceptⅠ-1 Basic Concept for Supervision of Investment Management-Related Service Entrusted Business OperatorsThe Investment Management-Related Service (meaning the Investment Management-Related Service prescribed in Article 2(43) of the Financial Instruments and Exchange Act (referred to below as the "FIEA"); the same applies below) refers to the service related to the calculation of the appraised value of the property subject to investment or the service related to guidance for ensuring compliance with laws and regulations, etc. that is conducted in relation to the Investment Management Business, etc. (meaning the Investment Management Business (meaning the Investment Management Businessdefined in Article 28(4) of the FIEA), the Specially Permitted Services for Qualified Institutional Investors, etc. (meaning the Specially Permitted Services for Qualified Institutional Investors, etc. defined in Article 63(2) of the FIEA, and limited to such
service in which the act set forth in paragraph (1)(ii) of that Article is conducted) or the Specially Permitted Services for Foreign Investors, etc. (meaning the Specially Permitted Services for Foreign Investors, etc. defined in Article 63-8(1) of the FIEA, and limited to such service in which the act set forth in item (i) of that paragraph is conducted); the same applies below). As one of the factors that have hindered new entries into the Investment Management Business in Japan, some have pointed out the heavy burden imposed on business operators, who are required to develop a framework for satisfying the requirements for registration.The voluntary registration system for the Investment Management-Related Service Entrusted Business makes persons engaging in the Investment Management Business, etc. (referred to below as "Investment Management Business Operators, etc.") eligible for the relaxation of registration requirements in terms of their personnel structure if they outsource the Investment Management-Related Service to Investment Management-Related Service Entrusted Business Operators (meaning the Investment Management-Related Service Entrusted Business Operators prescribed in Article 2(45) of the FIEA; the same applies below). However, as a premise, the quality of the Investment Management-Related Service Entrusted Business Operators to whom the Investment Management-Related Service is outsourced must be ensured.The purpose of the supervision of Investment Management-Related Service Entrusted Business Operators is to secure their appropriate business operations and have them fulfil their functions appropriately, thereby further enhancing the Investment Management Business in Japan, in order to ensure the premise for the voluntary registration system and the relaxation of the registration requirements regarding a personnel structure for Investment Management-Related Service Entrusted Business Operators.It is therefore important for supervisory bureaus to require Investment Management-Related - 2 -Service Entrusted Business Operators to fully comply with legal and regulatory requirements, such as the development of an appropriate structure/system for operational control to perform the Investment Management-Related Service Entrusted Business in a fair and appropriate manner, by keeping up to date on the status of those business operators' business operations via periodic hearing interviews, etc. and cumulating/analyzing various information provided by them to facilitate their voluntary actions for ensuring the appropriateness of business operations in a timely manner."Section I-1 Basic Concept for Supervision of Financial Instruments Business Operators, etc." of the "Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc."(hereinafter referred to as the "Comprehensive Guidelines") should also be referred to for the basic concept relating to the supervision of Investment Management-Related Service Entrusted
Business Operators.- 3 -Ⅰ-2 Purpose of Establishment of the Guidelines for SupervisionIn order to enable the Japanese economy to achieve sustainable development, it is important to accelerate a shift of funds "from savings to investment," which means a shift in emphasis from indirect financing to direct financing and market-based indirect financing. To promote the shift, it is essential that financial authorities design appropriate institutional frameworks and properly motivate Investment Management-Related Service Entrusted Business Operators, who play an important role in the performance of business operations of Investment Management Business Operators, etc., to strengthen their internal control while bearing in mind their mission to provide high-quality Investment Management-Related Service to Investment Management Business Operators, etc., who are the outsourcer.In order to conduct daily supervisory processes under these circumstances, we decided to work out concepts concerning supervision, supervisory viewpoints and methods of supervision, etc.The Guidelines were compiled with due consideration of the actual state of Investment Management-Related Service Entrusted Business Operators so as to be applied to various cases, and the requirements of the supervisory evaluation points specified in the Guidelines will not be uniformly applied to all Investment Management-Related Service Entrusted Business Operators.Accordingly, when applying the Guidelines, it is necessary to bear in mind that even if anInvestment Management-Related Service Entrusted Business Operator does not literally meet the requirements of all evaluation points, the case may not be judged inappropriate insofar as there is no problem from the viewpoint of protecting public interests and investors; it is necessary to avoid applying the Guidelines in a mechanical and uniform fashion. On the other hand, it should also be borne in mind that even if an Investment Management-Related Service Entrusted Business Operatorformally fulfills all the functions concerning evaluation points, the case could be deemed to be inappropriate from the viewpoint of protecting public interests and investors.- 4 -Ⅱ. Points of Attention in the Conduct of Administrative Processes Regarding the Supervision of Investment Management-Related Service Entrusted Business OperatorsThe provisions in "II. Points of Attention in the Conduct of Administrative Processes Regarding the Supervision of Financial Instruments Business Operators, etc." of the Comprehensive Guidelines are to apply mutatis mutandis for points of attention in administrative processes for the supervision of Investment Management-Related Service Entrusted Business Operators.- 5 -Ⅲ. Supervisory Evaluation Points and Various Administrative ProceduresⅢ-1 GovernanceFor Investment Management-Related Service Entrusted Business Operators to appropriately fulfiltheir functions in financial and capital markets, it is important that they themselves endeavor
to develop the necessary control environment for legal and regulatory compliance and operate business, while recognizing the need to provide the Investment Management-Related Service with a certain level of quality.Therefore, in conducting daily supervisory administrative processes, it is necessary to examine what the desirable status of governance is for an Investment Management-Related Service Entrusted Business Operator and take supervisory actions, from the viewpoint of whether the management team'schecking of the execution of its business and the monitoring and control of the management team are functioning effectively.Provisions of "III-1 Governance (General)" and "IV-1-1 Officers of Financial Instruments Business Operators" of the Comprehensive Guidelines are to apply mutatis mutandis to the examination of governance, and whether the representative director, directors and board of directors, auditors and board of auditors, and the internal audit section, etc. are fulfilling their functions respectively in an appropriate manner is to be verified, in accordance with the characteristics, size, complexity, etc. of the business of individual Investment Management-Related Service Entrusted Business Operators.- 6 -Ⅲ-2 Appropriateness of Business OperationsIII-2-1 Development of Operational Control SystemInvestment Management-Related Service Entrusted Business Operators are required to develop an operational control system for appropriately performing the Investment Management-Related Entrusted Business under Article 66-78 of the FIEA. They need to develop a system to satisfy appropriate levels and depths for each item regarding the operational control system required under the items of Article 358 of the Cabinet Office Order on Financial Instruments Business (referred to below as the "FIB Cabinet Office Order") in accordance with the characteristics, size, complexity, etc.of their Investment Management-Related Service (limited to the service for which the registration under Article 66-71 of the FIEA or the registration for change under Article 66-75(4) of the FIEA has been obtained; the same applies in III-2-1).Based on the above, supervisors are to conduct examinations on the status of the development of an operational control system by Investment Management-Related Service Entrusted Business Operators for each of the items prescribed in the items of Article 358 of the FIB Cabinet Office Order, while considering the following points, for example.(1) Establishment of internal rules, etc. for appropriately performing the Investment Management-Related Service Entrusted Business(i) Whether the Investment Management-Related Service Entrusted Business Operator hasestablished internal rules, etc. appropriately, in consideration of the details, characteristics, size, complexity, etc. of its Investment Management-Related Service;(ii) Whether the Investment Management-Related Service Entrusted Business Operator takesmeasures for its officers and
employees, such as providing them with training, under the recognition that compliance with internal rules, etc. is part of company-wide legal and regulatory compliance responsibility.(2) Measures to ensure the appropriateness of business operations of Investment Management-Related Service Entrusted Business Operators(i) Whether the Investment Management-Related Service Entrusted Business Operator has conducted the following, for example, as a measure to develop a system for preserving and managing information in relation to the performance of its Investment Management-Related Service:A. Whether rules have been established regarding the preservation and management of information that its officers and employees have obtained through business operations for its Investment Management-Related Service Entrusted Business;B. Whether a system has been developed for verifying and ensuring the preservation and management of information in line with the established rules mentioned in A. above; - 7 -C. Whether guidance and training on the preservation and management of information have been sufficiently given to officers and employees;(ii) Whether the Investment Management-Related Service Entrusted Business Operator has conducted the following, for example, as a measure to develop a system for communication with the outsourcer of the Investment Management-Related Service (referred to below as the "outsourcer") necessary for performing the Investment Management-Related Service Entrusted Business:A. Whether liaison staff and the method of communication with the outsourcer have been specified with regard to the Investment Management-Related Service;B. Whether a system has been developed for sharing information and having contact with and making reports to the outsourcer with regard to the performance of the Investment Management-Related Service with sufficient frequency by an appropriate method;C. Whether a system has been developed to have contact with and make reports to the outsourcer promptly when receiving a request regarding the Investment Management-Related Service from the outsourcer or upon the occurrence of any problem regarding matters relevant to the Investment Management-Related Service;D. Whether a system has been developed to receive the provision of information necessary for performing the Investment Management-Related Service from the outsourcer (including a system to point out to the outsourcer any suspicion on the accuracy of the provided information or to request further information when the provided information is insufficient);E. Whether a system has been developed to surely provide the outsourcer with the outcome of performing the Investment Management-Related Service (including the indication of any points to be rectified by the entrusting party in light of laws and regulations and the purport of the entrustment contract concluded with the outsourcer);F. Whether the matters set forth in A. to E. above are clearly specified in the written
contract for the outsourcing with the outsourcer;(iii) Whether the Investment Management-Related Service Entrusted Business Operator has conducted the following, for example, as a measure to sufficiently secure personnel with professional knowledge and skills that enable appropriate and smooth performance of the Investment Management-Related Service:A. Recruitment of and training for officers and employees in charge of the Investment Management-Related Service:Whether the Investment Management-Related Service Entrusted Business Operatorappropriately recruits personnel and provides them with training in order to sufficiently secure personnel with professional knowledge and skills that enable appropriate and smooth performance of the Investment Management-Related Service;B. Staffing for performing the outsourced Investment Management-Related Service:Whether the Investment Management-Related Service Entrusted Business Operatorappropriately staffs personnel necessary for appropriate and smooth performance of the - 8 -outsourced Investment Management-Related Service in accordance with the details and characteristics of the relevant service;C. Appointment of a person responsible for supervising the performance of the outsourced Investment Management-Related Service:Whether the Investment Management-Related Service Entrusted Business Operator has clarified the authority and responsibility of a person responsible for supervising the performance of the outsourced Investment Management-Related Service and has appropriately established the appointment method in the process of performing the relevant service, and whether the appointed responsible person is exercising the supervisory authority appropriately or is otherwise fulfilling their function effectively;(iv) Whether the Investment Management-Related Service Entrusted Business Operator has appropriately established the policy and procedures for verifying the appropriateness of its Investment Management-Related Service (including the development of a system for double checking and making requests for further information from the outsourcer when any suspicion arises regarding the accuracy of the provided information, etc.), for example, in advance and is conducting verification in line with those policy and procedures as a measure to ensure the appropriateness of the relevant service, and whether the Investment Management-Related Service Entrusted Business Operator verifies the adequacy and workability of those policy andprocedures appropriately on a timely basis and reviews them as necessary;(v) Whether the Investment Management-Related Service Entrusted Business Operator has established the policy and procedures for verifying ex post facto the performed Investment Management-Related Service and is appropriately conducting verification and review in line with those policy and procedures as a measure to ensure the appropriateness of the relevant service, and whether the Investment Management-Related
Service Entrusted Business Operatorverifies the adequacy and workability of those policy and procedures appropriately on a timely basis and reviews them as necessary;(vi) Whether the following systems have been developed as a measure to ensure appropriate supervision, etc. of the Investment Management-Related Service Entrusted Business Operatorby the outsourcer:A. A system for providing prior explanations so that the entrusting party can understand the scope of the Investment Management-Related Service for which the Investment Management-Related Service Entrusted Business Operator has obtained registration;B. In the case of subcontracting the outsourced Investment Management-Related Service to a third party, a system for providing explanations about the subcontracting and obtaining consent from the outsourcer.(3) Measures to identify acts involving a conflict of interest between the outsourcer and the Investment Management-Related Service Entrusted Business Operator or a third party (including any outsourcer other than the relevant outsourcer) and other equivalent acts (referred to below as "acts in conflict - 9 -of interest"), out of acts in the Investment Management-Related Service, by an appropriate method, and to ensure that those acts will not hinder the appropriate performance of the Investment Management-Related Service(i) Whether the Investment Management-Related Service Entrusted Business Operator has conducted the following, for example, as a measure to identify acts in conflict of interest:A. Whether the Investment Management-Related Service Entrusted Business Operator has identified and categorized acts in conflict of interest by an appropriate method in advance;B. Whether the Investment Management-Related Service Entrusted Business Operatorappropriately reflected the characteristics, size, complexity of the relevant service when identifying acts in conflict of interest;C. Whether the Investment Management-Related Service Entrusted Business Operator verifies the adequacy of the identified and categorized acts in conflict of interest appropriately on a timely basis and reviews them as necessary;(ii) Whether the Investment Management-Related Service Entrusted Business Operator has conducted the following, for example, as a measure to ensure that the appropriate performance of the Investment Management-Related Service will not be hindered by any act in conflict of interest:A. Whether the Investment Management-Related Service Entrusted Business Operator has appropriately specified measures to ensure that the appropriate performance of the Investment Management-Related Service will not be hindered by any of the acts in conflict of interest identified and categorized as mentioned in (i)A. above in accordance with their characteristics;B. Whether an internal control environment has been developed to check whether any act falls under the categories of acts in conflict of interest upon performing the Investment Management-Related Service, and
whether the Investment Management-Related Service Entrusted Business Operator takes appropriate measures, when any act falls under an act in conflict of interest, in order to ensure that the appropriate performance of the relevant service will not be hindered by that act;C. Whether the Investment Management-Related Service Entrusted Business Operator verifies the adequacy and workability of the measures to ensure that the appropriate performance of the Investment Management-Related Service will not be hindered by any act in conflict of interest identified as mentioned in (i)A. above appropriately on a timely basis and reviews them as necessary;(iii) Whether the Investment Management-Related Service Entrusted Business Operator has developed rules on the measures to ensure that the appropriate performance of the Investment Management-Related Service will not be hindered by any act in conflict of interest identified as mentioned in (i)A. above, and implements those rules as a measure to ensure that, and whether the Investment Management-Related Service Entrusted Business Operator verifies the adequacy and workability of those rules appropriately on a timely basis and reviews them as - 10 -necessary.(4) Measures to prevent any acts in service other than that for the Investment Management-Related Service Entrusted Business from exerting an undue influence on the Investment Management-Related Service(i) Whether the Investment Management-Related Service Entrusted Business Operator has clarified services relating to its Investment Management-Related Service Entrusted Businessand other services and has identified and categorized acts in such other services that may exert an undue influence on the Investment Management-Related Service by an appropriate method in advance;(ii) Whether the Investment Management-Related Service Entrusted Business Operator takes measures to prevent any of the identified and categorized acts in other services from exertingan undue influence on the Investment Management-Related Service, such as through the management by separating service sectors, in accordance with the characteristics of the identified and categorized acts, and whether the Investment Management-Related Service Entrusted Business Operator verifies the adequacy and workability of those measures appropriately on a timely basis and reviews them as necessary.(5) Measures to manage information obtained th