Investment Management Business Registration/Frequently Asked Questions

Q. What should I do if the compliance officer resigns after registration?

A.

First, let's talk about the "procedural" aspect.

If the compliance officer of a financial instruments business operator retires,

After arranging an appropriate successor, from the date of retirement (if the retirement date and change date are different, the “change date”)

It is necessary to submit a "notification of change in the officer or employee specified by government ordinance of a financial instruments business operator" within two weeks.

You will also need to make changes to your affiliated association, etc. according to the operation of each association.

In particular, in the case of compliance officers, notifications are also made as a contact point or complaint point for associations, etc.

There is a high possibility that this is the case, so be sure to change all items related to the retiree.

Next, let's talk about the more important "actual situation".

The compliance officer of a financial instruments business operator, as an “important employee,”

It plays an important role in legal compliance, guidance, and supervision of financial instruments business operators.

“Full-time” is required as an important position that is the key to compliance,

In terms of the authorities' examination of the "human resources requirements" that a financial instruments business operator must meet,

Particular emphasis will be placed on confirming knowledge and experience.

Therefore, when selecting a new successor, it is necessary to pay attention to the following factors.

・Have the necessary knowledge and experience as a compliance officer for a financial instruments business operator

(= It is not acceptable if the necessary knowledge and experience cannot be explained on the resume or personnel composition document)

・In principle, the person must be full-time, with no concurrent or concurrent positions.

(= Do not hold concurrent positions or hold concurrent positions that may interfere with work execution)

If you are unsure about the above factors, even if you submit a change notification to the authorities, you may be asked for additional explanation, etc.

There is a possibility that your notification will not be accepted and you will be asked to reconsider your staffing arrangements.

In addition, we will of course ensure that there are no “blank periods” due to appointment or resignation,

Considering the important duties and roles played by compliance officers,

Normally, a handover period of at least 1 to 3 months is required.

Due to the sudden retirement of the compliance officer,

There are many cases where internal management systems suddenly become inadequate.

To prevent this from happening, it is effective to be aware of the following points on a daily basis.

・Thoroughly organize work and documents and reduce individual work and management as much as possible

・Increase opportunities for other executives and employees to become involved in compliance and foster company-wide compliance awareness

・Assign a person other than the person in charge to the compliance department and be conscious of training the next generation.

・Ensure sufficient time for handing over important positions.

Q. I am an investment advisory firm. I would like to start a new type 2 financial instruments transaction business. What should I do.

A.

When an investment advisory company newly engages in Type 2 financial instruments transaction business,

The requirements for Type 2 Financial Instruments Transaction Business must be established and a procedure called ``Application for Change Registration'' must be completed.

Particular attention should be paid to requirements regarding personnel structure (organizational structure, etc.).

In order to conduct the Type 2 Financial Instruments Transaction Business, we have taken "measures to prevent harmful effects" with the investment advisory business, and

Human resources need to be in place.

Harm prevention measures are measures required to conduct a company's operations fairly and protect investors.

For example, when recruiting funds in the Type 2 Financial Instruments Business,

To clients of the investment advisory business, for the benefit of the Type II financial instruments business,

The act of advising people to invest in their own funds is

It impairs fairness and fails to protect investors.

Measures to prevent such situations are measures to prevent harmful effects.

Examples of measures to prevent harmful effects include:

Separate from the sales department that conducts investment advisory business, we have established a new sales department that conducts Type 2 financial instruments transaction business.

One way to do this is to manage customer information to prevent unauthorized exchange of customer information between both sales departments.

When an investment advisory company newly engages in Type 2 financial instruments transaction business,

Having taken measures to prevent harmful effects, and having knowledge and experience in the Type 2 Financial Instruments Business.

It is necessary to improve the human resources structure, such as assigning a person in charge.

Q. What is the difference between completing the procedure myself and entrusting it to an administrative scrivener?

A.

By leaving it to an administrative scrivener, we can focus on the operations after registration in the financial instruments business.

You can prepare documents and obtain licenses in a long-term and strategic manner.

Of course, you can do it yourself, but

Business method manuals and internal regulations may be out of sync with the actual work you want to do, which can lead to difficulties later on.

Additionally, before applying, you will need to prepare over 30 types of documents, including application forms and internal regulations.

Some of the documents are as large as 30 to 40 pages.

If you do the procedure yourself, you will first have a hard time preparing the documents.

Depending on the accuracy of the documents, the examination may not proceed smoothly.

In some cases, authorities have tacitly encouraged us to seek expert opinion.

It may take additional time to obtain a license.