Japan’s 2026 Bill to Amend the Financial Instruments and Exchange Act and the Payment Services Act

JAMP Compliance Newsletter No. 69 | Part 1: Overview and Policy Context

JAMP Financial Solutions Co., Ltd., a member of the JAMP Corporation Group, publishes the JAMP Compliance Newsletter for Financial Instruments Business Operators and firms considering registration in Japan. The newsletter provides updates on regulatory developments and other matters relevant to financial business and compliance operations.

This article examines the Bill to Partially Amend the Financial Instruments and Exchange Act and the Payment Services Act (provisional English title; Japanese: 金融商品取引法及び資金決済に関する法律の一部を改正する法律案; the “Bill”), which was submitted to the 221st session of the National Diet on April 10, 2026.

The Bill is a comprehensive package of proposed reforms intended to respond to changes affecting Japan’s capital markets and financial services industry. It addresses several significant policy areas and may have broad implications for financial operations and compliance frameworks in Japan.

This is the first article in a planned five-part series:
　1. Overview and Policy Context
　2. Review of Cryptoasset Regulation
　3. Corporate Sustainability Disclosure and Assurance
　4. Promoting Funding for Startups
　5. Review of Unfair Trading Regulations for Securities

Editor’s Update — July 15, 2026

Official legislative records show that the Bill passed the House of Representatives on June 11, 2026, and was approved by the Committee on Financial Affairs of the House of Councillors on July 14, 2026. At the time of this update, the official legislative record had not yet recorded the result of a plenary vote in the House of Councillors or the promulgation of the legislation. The status should be reconfirmed before publication.

Overview and Policy Context

When the original Japanese article was published on July 2, 2026, the Bill was under consideration in the National Diet.

The article noted that, if enacted during the current Diet session, the legislation was expected to be promulgated around summer 2026 and brought into force in stages, depending on the relevant provisions. The proposed framework for corporate sustainability disclosure and assurance was expected to take effect from April 2027.

The Bill covers several distinct regulatory areas. However, these reforms should not be viewed merely as a collection of separate technical amendments.

Taken together, they form an integrated policy package intended to enhance Japan’s financial and capital markets as investment markets, while expanding the supply of growth capital and strengthening market fairness, transparency and investor protection.

Review of Cryptoasset Regulation

One of the central elements of the Bill is the proposed transfer of the principal regulatory framework for cryptoasset transactions from the Payment Services Act to the Financial Instruments and Exchange Act.

Cryptoassets have historically been regulated primarily from the perspective of their use as a means of payment. Under the proposed framework, they would be positioned as financial instruments under the Financial Instruments and Exchange Act, while remaining distinct from securities such as shares and bonds and being subject to rules reflecting their particular characteristics.

Activities such as the purchase, sale, intermediation and custody of cryptoassets would be incorporated into the Financial Instruments Business framework as Cryptoasset Trading Business (provisional English translation; Japanese: 暗号資産取引業).

Businesses conducting these activities would become subject to a broader framework that includes registration requirements, conduct-of-business rules and information disclosure requirements.

This represents a significant policy shift. It reflects a decision to address cryptoassets directly as investment assets within Japan’s financial regulatory framework.

The implications are not limited to existing cryptoasset-related businesses. Financial Instruments Business Operators engaged in activities such as investment advisory business or investment management business may also need to consider how cryptoassets could affect their existing businesses, service structures and regulatory compliance frameworks.

Corporate Sustainability Disclosure and Assurance

The Bill also proposes a framework for corporate sustainability disclosure and assurance.

Under the proposed reforms, certain companies would be required not only to disclose sustainability-related information in documents such as their Annual Securities Reports, but also to obtain third-party assurance regarding that information.

The Bill also provides for a safe-harbor framework intended to encourage companies to disclose forward-looking and other sustainability-related information.

Subject to specified conditions, companies may be protected from certain civil liability and administrative monetary penalties arising from false statements in forward-looking information.

The proposed regime would therefore require companies to do more than publish sustainability information.

They would also need to establish internal controls and data-management frameworks capable of supporting the reliability of that information. Because the regime concerns non-financial information, the practical scope of the required systems and controls may be broader than those traditionally used for financial reporting.

Promoting Funding for Startups

The Bill includes measures intended to facilitate fundraising by startup companies.

These measures include:
・raising the threshold below which the filing of a Securities Registration Statement is exempted;
・expanding frameworks for smaller securities offerings; and
・broadening the range of persons who may be solicited in certain private placements directed at professional investors.

The objective is to expand the supply of capital to startup companies.

At the same time, an appropriate balance must be maintained between facilitating access to capital and protecting investors.

Financial Instruments Business Operators and other relevant firms may therefore need to exercise greater care when assessing suitability and determining what information should be provided to investors, taking account of each customer’s characteristics and investment experience.

Review of Unfair Trading Regulations for Securities

The Bill also proposes amendments to Japan’s unfair trading regulations for securities.

The proposed measures include:
・expanding the categories of persons subject to insider trading regulations;
・revising the calculation and level of administrative monetary penalties; and
・strengthening investigative powers.

In relation to insider trading associated with tender offers, the Bill would expand the scope of persons connected with the target company who may become subject to the regulations.

The proposed reforms are intended to address conduct that may not have been adequately captured under the existing framework.

The proposed increases in administrative monetary penalties also demonstrate a clear policy objective of strengthening the economic deterrent against regulatory violations.

Cross-Cutting Themes of the Bill

Viewed across the different policy areas, the Bill reflects a multidimensional enhancement of the regulatory environment surrounding Financial Instruments Business Operators.

Three cross-cutting themes are particularly important.

First, the range of regulated activities would expand.

Areas such as cryptoasset-related services, which have not previously been regulated directly within the Financial Instruments and Exchange Act framework, may become subject to that framework. Financial institutions and other businesses will therefore need to assess whether their existing or planned activities could fall within newly regulated categories.

Second, the range of information relevant to investment decisions would broaden.

As sustainability disclosure and assurance develop, investment analysis will increasingly incorporate non-financial information. Financial institutions will need to consider how such information should be evaluated and reflected in investment decisions and explanations provided to customers.

Third, enforcement would become stronger.

The proposed changes to unfair trading regulations would increase both the likelihood that regulatory risks are identified and the potential cost of violations.

JAMP Commentary

The principles underlying the Bill are the protection of market integrity and the enhancement of investor protection.

The Bill is not limited to adding formal regulatory requirements. It places considerable emphasis on using effective regulation to maintain the soundness and credibility of Japan’s financial and capital markets.

Financial institutions and other relevant businesses should therefore look beyond the wording of individual statutory provisions.

They may need to undertake a broader review of their business models, customer relationships, information-management systems, internal controls and compliance frameworks.

The next article in this series will examine the proposed review of cryptoasset regulation, including the significance of transferring the regulatory framework to the Financial Instruments and Exchange Act, the proposed business and disclosure requirements, and practical compliance considerations.

Author: JAMP Compliance Team, JAMP Financial Solutions Co., Ltd.

About This Article
This article is an adapted English edition of JAMP Compliance Newsletter No. 69, originally published in Japanese on July 2, 2026. It has been edited and supplemented where necessary to explain Japan-specific legal, regulatory and market context to readers outside Japan. It is therefore not a direct translation of the original Japanese article.

Legal and Translation Notice
Unless otherwise stated, English translations of the names of Japanese bills, proposed amendments and other terms for which no official English translation has been confirmed are provisional translations prepared for this article. The original Japanese materials should be consulted for authoritative wording.

This article is provided for general informational purposes only and does not constitute legal, regulatory, tax, accounting or investment advice. Laws, regulations, bills, official interpretations and implementation schedules may change. Readers should consult the relevant official Japanese materials and obtain advice from appropriately qualified professionals before taking action.