This 4th column by Japan Asset Management Platform Group (JAMP) on potential snags for financial instruments business operators (FIBOs) concerns the duty to notify authorities a change in officers or major employees.

Submission of a “Notification of Change in Officers or Major Employees Specified by Cabinet Order” (the Notification) is required of all FIBOs who are registered for financial instruments business under Article 29 of the Financial Instruments and Exchange Act (FIEA)*. (FIEA, Article 31, Paragraph 1)

According to Article 1 Main paragraph and Paragraph 3 of the Cabinet Office Order on Financial Instruments Business, etc.**, in cases where there has been any change to “names of Officers, for a juridical person” (FIEA, Article 29-2, Paragraph 1-3) and “names of employees, if there is an employee or employees specified by a Cabinet Order” (ibid. Paragraph 1-4), you must submit a document stating the particulars after such change prepared in accordance with Appended Form No.1, a copy thereof and prescribed documents in two weeks from the day of the change. (FIEA, Article 31, Paragraph 1)

Many people mistakenly believe Notification applies only to the appointment of new officers or resignation of officers, or changes in major employees specified by Cabinet Order.  However, a change in personnel such as an increase or decrease in the number of concurrent positions, or a change of concurrent positions, is also reasons for notification of change.  For example, a change in concurrent positions from “Managing Director and General Manager of Sales Dept.” to “Managing Director, General Manager of Sales Dept. and Director of Planning Dept.

Requires a change in “job title” on page 4 in Appended Form No.1 to the Written Application for Registration.  FIBOs are expected to make such personnel changes on a daily basis and, therefore, need to be aware that notification is required for each such change.

Requirements may differ depending on jurisdiction where you are registered as a FIBO.  Check before submitting the Notification.


* Financial Instruments and Exchange Act:

** Cabinet Office Order on Financial Instruments Business, etc.