Singapore/Hong Kong, 22 November 2022 – Japan’s FSA (Financial Services Agency) has been awarded Outstanding Project – Regulator Initiative of the Year in the 5th Regulation Asia Awards for Excellence 2022 at an in-person ceremony on 22 November 2022.
The FSA was recognised for its efforts to enhance Japan’s AML/CFT regime, in collaboration with other government agencies as well as the private sector, in response to the FATF (Financial Action Task Force) mutual evaluation report. In August 2021, the report highlighted a need for more effective supervision by Japan’s financial sector regulator and more preventative measures to guard against misuse of the financial system.
In response, the FSA ramped up its dialogue and cooperation with financial institutions on AML compliance matters, and conducted targeted inspections to assess whether financial institutions have appropriate frameworks in place to fulfill their AML/CFT obligations by a March 2024 hard deadline. This increased engagement has driven industry improvements in areas such as customer risk assessment, transaction monitoring, sanctions screening, suspicious transaction reporting, among other areas.
The FSA has further been enhancing cooperation with both the public and private sectors. A key initiative highlighted by the Regulation Asia judging panel was a collaboration between the JBA (Japanese Bankers Association) and private sector banks, with support from the FSA, to develop a shared platform for AML/CFT monitoring and screening. The platform leverages machine learning to perform analytics on anonymised data from banks to address high false positives and improve detection accuracy across the industry.
The judges also pointed to the FSA’s efforts to drive the adoption of the Travel Rule in Japan’s virtual assets industry – including by working with the industry to address implementation challenges and push forward legal amendments to enshrine the obligation into law. The FSA has also been instrumental in the development and introduction of a new regulatory and supervisory framework for stablecoins in Japan.
“I am deeply honoured and grateful for this award. I have been working hard with my team on enhancing Japan’s AML/CFT measures at the FSA since 2018, based on public-private partnerships,” said Hiroshi Ozaki, Chief Financial Inspector of AML/CFT at the FSA. “In this regard, the most important focus has been on dialogue with the private sector. This award demonstrates that sometimes small individual efforts can play an important role when we constantly are cooperative, consistent, and accountable.”
About the Regulation Asia Awards for Excellence 2022
The Regulation Asia Awards for Excellence recognises financial institutions, technology companies, legal and consulting firms, exchanges and other players that help ensure the highest regulatory compliance standards are upheld in the financial .industry. Each year, senior industry practitioners serve on a judging panel to help assess and score each submission to determine the winning entrants.
For a full list of the award 2022 winners, visit www.regulationasia.com/awards.
About Regulation Asia
Regulation Asia is the leading source of actionable regulatory intelligence for Asia Pacific markets. With over 12,000 subscribers, including regulatory bodies, exchanges, banks, asset managers and service providers, Regulation Asia plays a key role in shaping the regulatory agenda.