Japan: Conduct, Safeguarding & Promotions

Conduct, Safeguarding & Financial Promotions

Trust-type electronic payment instrument issuers may now hold up to 50% of backing assets in short-term Japanese government bonds of three months or less, or in early-cancellable term deposits, relaxing the prior requirement that reserves sit wholly in demand deposits. Separately, fund-transfer operators gain an optional bank- or trust-backed direct-reimbursement mechanism that sits alongside the existing kyotaku statutory deposit route, giving non-bank payment institutions a second safeguarding pathway for user funds held on failure. Both changes apply specifically to the non-bank payment-institution and EPI-issuer population rather than to deposit-taking banks, which continue to safeguard customer funds under existing banking-sector prudential rules; the reforms therefore widen, rather than replace, the menu of safeguarding options available to non-bank operators without altering the bank-side baseline. This is the live safeguarding-and-conduct item for Japan this cycle, distinct from the market-access and licensing changes tracked separately.