Japan’s Financial Services Agency (FSA) has published draft guidelines for funds investing in cryptocurrencies, CoinDesk reported.
On September 30, the regulator issued draft supervision guidelines for financial instruments business operators. The FSA said:
“It is anticipated that financial products that invest in crypto assets (virtual currency) will be formed in the future, but there are also indications that investment in crypto assets is encouraging speculation. The agency believes that it should carefully handle the formation and sale of investment trusts that invest in such assets.”
However, the revisions specified in the published document are a bit vague, CoinDesk noted. The FSA recommended funds to be cautious when considering investing in assets other than the original objective of the trust.
The document does not even mention “crypto-assets”, and appears to be putting them under “non-specific assets.”
The FSA said that “Special attention should be paid to the composition of such products,” adding that the products should be created with “names that are reminiscent of non-specific assets.”
The revised supervisory guidelines are open for public comments until October 31.
In May, Japan passed a bill to amend two existing financial laws – the Funds Settlement Act and the Financial Instruments and Exchange Act – both of which govern cryptocurrency regulation. The legislation will come into effect on April 2020.
Currently, there are 19 licensed cryptocurrency exchanges operating in the country. Of these, 3 were approved this year and the rest received their license back in 2017.
More recently, six major Japanese security companies – SBI Securities, Nomura Securities, Daiwa Securities Group, and online brokerages Kabu.com Securities, Rakuten Securities, and Monex Group – teamed up to establish an organization that will establish rules for security token offerings (STOs).