JFSA Consultations

Key dates

Summer 2026

- Official adoption of the revised Corporate Governance Code

May 15, 2026 Deadline

- Public consultation comment submission deadline (JST)

June 1, 2026

- Anticipated effective date (based on historical pattern; confirmation pending final adoption)

July 2027 Deadline

- Listed companies must submit governance reports under the new code

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

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.

Key dates

March 2025

- Original AI Discussion Paper (Version 1.0) published

March 3, 2026

- FSA publishes AI Discussion Paper (Version 1.1) in Japanese

Ongoing

- Comment submission period (no specified end date provided; comments accepted via email to [email protected])

June

December 2025; - Previous stakeholder engagement period (completed; informed Version 1.1)

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):

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...