(1)Reasons for Proposal

As a follow-up measure to the Comprehensive Measures for Strengthening Protection of High-Risk Financial Product Investors (Dec. 2019), this proposal aims to reflect improvements made to the system for protecting investors with respect to sales of financial investment products, etc.

(2)Major Provisions

A. Prescription of Detailed Matters Regarding High-level Financial Investment Products, etc. (Article 1-2 (3))

Detailed matters regarding high-level financial investment products, contracts for entrustment of high-level investments, and contracts for high-level money trust such as a method for calculating maximum principal loss and scope of collective investment securities considered as high-level financial investment products, etc., shall be prescribed.

B. Strengthening of Regulations on Investment Offers, etc. (Articles 4-20, 4-77, and 4-93)

Discretionary fill-in of investor information, discretionary changes to investor tendencies, discretionary classification of financial investment product risk level, failure to set-up a target market with respect to high-level financial investment products, etc., shall be prescribed as unsound sales practices, and when transferring high-level financial investment products issued through public offerings into specific money trusts, the investment prospectus for the relevant high-level financial investment product shall be mandatorily issued to investors.

C. Prescription of Exceptions to Tape-Recording and Careful Deliberation Requirements (Articles 4-20 (2), 4-77 (2), and 4-93 (2))

Exceptions to the requirement on tape-recording and careful deliberation applied to elderly investors or investors with investment tendencies unsuited to the investment product shall be prescribed as cases where low-risk financial investment products such as government bonds, local government bonds, MMF, customer RP, etc., are sold, etc.