National Supervisory Authority & Licensing Qualification Dossier • Asia-Pacific
FFAJ
JapanFinancial Futures Association of Japan
Source / Native Reference: 日本金融期货协会
- Supervisory tier
- Tier-1
- License classes
- 3
- Licensed records
- 2
- Active / regulated
- 2
Statutory Supervisory Mandate & Scope
Supervises banks, securities and FX broker-dealers (FIBO), investment managers, insurers, credit rating agencies, Crypto-Asset Exchange Service Providers (CAESPs), and Electronic Payment Instruments (stablecoin) issuers.
Prudential Tier Assessment
Tier-1Ultra-strict G7 integrated financial supervisor enforcing the Financial Instruments and Exchange Act (FIEA) and Payment Services Act (PSA) with zero-loss cold-wallet trust rules.
National licensing qualifications & statutory authorisation classes (FFAJ)
Authorisation categories, permitted institutional and retail activities, minimum initial capital adequacy, and ongoing prudential solvency rules enforced by FFAJ in Japan.
| License class / code | Official designation | Permitted institutional & retail activities | Minimum initial / base capital | Ongoing prudential & solvency rule |
|---|---|---|---|---|
| FIEA Type I FIBO (第一種金融商品取引業) | Type I Financial Instruments Business Operator (Securities, Retail FX & Crypto Derivatives) | Brokerage, dealing, market-making, underwriting of liquid securities, retail OTC FX margin trading, and crypto-asset derivatives. | JPY ¥50,000,000 minimum Stated Capital & Net Assets (JPY ¥300M–¥3B for underwriting), plus Capital Adequacy Ratio (自己資本規制比率) strictly ≥ 120% (early warning at 140%). | Strict 25:1 retail FX leverage cap (4% margin), 2:1 retail crypto derivative leverage cap (50% margin), and mandatory FFAJ / JSDA membership. |
| FIEA Type II FIBO & Investment Management | Type II Financial Instruments Business & Discretionary Investment Management | Distribution of collective investment scheme interests, private placements, real estate trust beneficiary rights, and discretionary fund management. | JPY ¥10,000,000 minimum capital (Type II) or JPY ¥50,000,000 minimum capital and net assets (Investment Management Business). | Fiduciary duty, annual Business Report (事業報告書) to the Local Finance Bureau, and strict prohibition on commingling fund assets. |
| PSA CAESP (暗号資産交換業者) | Registered Crypto-Asset Exchange Service Provider | Spot exchange, brokerage, and custody of crypto-assets for Japanese residents. | JPY ¥10,000,000 minimum Stated Capital plus positive Net Assets and JVCEA self-regulatory membership. | 95% cold wallet isolation, annual audit of segregated crypto-assets and fiat trusts by a Japanese CPA firm, and JVCEA pre-screening of new token listings. |
Investor compensation, client money segregation & digital-asset regime
Statutory counterparty protections, custody reconciliation mandates, and virtual-asset licensing status under FFAJ.
Japan Investor Protection Fund (JIPF) & Deposit Insurance Corporation of Japan (DICJ)
- Maximum coverage per client
- JPY ¥10,000,000 per retail client via JIPF (for Type I securities firms); JPY ¥10,000,000 + interest per depositor via DICJ for Japanese banks
- Eligible counterparties & scope
- Individual and non-institutional clients of Type I FIBOs (additionally, 100% of retail FX margin and 95%+ of customer crypto-assets are held in bankruptcy-remote Trust Banks).
FIEA Article 43-2 & Article 43-3 (Mandatory Trust Bank Segregation — 信託保全)
- Reconciliation & audit cadence
- Daily calculation of Required Segregated Amount (区分管理必要額) reconciled within 2 business days into a licensed Japanese Trust Bank.
- Approved custodian requirements
- 100% of retail FX/CFD customer margin must be placed in a money trust with a licensed Japanese Trust Bank (e.g., Mitsubishi UFJ Trust, Sumitomo Mitsui Trust, Nomura Trust).
PSA Crypto-Asset Exchange Service Provider (CAESP), FIEA Crypto Derivatives & PSA Electronic Payment Instruments (Stablecoins)
- Travel Rule, custody & stablecoin rules
- 95% minimum cold-wallet storage mandate; any 5% hot-wallet exposure must be backed 1:1 by same-kind proprietary crypto held as a Performance Guarantee Asset (履行保証暗号資産); full APTCP Travel Rule enforcement.
Primary Governing Statutes & Rulebooks
- Financial Instruments and Exchange Act (FIEA — Act No. 25 of 1948)
- Payment Services Act of Japan (PSA — Act No. 59 of 2009, amended 2023 for Stablecoins)
- Act on Prevention of Transfer of Criminal Proceeds (APTCP — AML/KYC)
- Cabinet Office Ordinance on Financial Instruments Business & FFAJ / JVCEA Self-Regulatory Rules
Regulatory Reporting & Audit Obligations
Monthly Capital Adequacy Ratio (CAR) filings to the Kanto/Local Finance Bureau and public quarterly CAR disclosureAnnual financial statement audit and separate Segregated Client Asset Audit (分別管理監査) by a Japanese Certified Public AccountantMandatory affiliation with FINMAC (Financial Instruments Mediation Assistance Center) for ADR dispute resolution
Cross-Border Equivalence & Passporting
Strict territoriality under FIEA Article 61: foreign unregistered brokers and crypto exchanges are strictly prohibited from soliciting Japanese residents without local Type I FIBO / CAESP registration.
Supervised institutions & FFAJ licence records in our database
2 licence records referencing FFAJ (2 regulated/registered).
FFAJ (Japan): institutional licensing & due diligence FAQ
Key statutory capital, compensation, custody segregation, and verification answers for compliance teams.
What are the primary licensing classes and minimum capital requirements under FFAJ (Japan)?
FFAJ (Financial Futures Association of Japan) supervises financial institutions in Japan under Financial Instruments and Exchange Act (FIEA — Act No. 25 of 1948) and Payment Services Act of Japan (PSA — Act No. 59 of 2009, amended 2023 for Stablecoins). Key statutory authorisation classes include: FIEA Type I FIBO (第一種金融商品取引業) (Type I Financial Instruments Business Operator (Securities, Retail FX & Crypto Derivatives) — min. capital: JPY ¥50,000,000 minimum Stated Capital & Net Assets (JPY ¥300M–¥3B for underwriting), plus Capital Adequacy Ratio (自己資本規制比率) strictly ≥ 120% (early warning at 140%).); FIEA Type II FIBO & Investment Management (Type II Financial Instruments Business & Discretionary Investment Management — min. capital: JPY ¥10,000,000 minimum capital (Type II) or JPY ¥50,000,000 minimum capital and net assets (Investment Management Business).); PSA CAESP (暗号資産交換業者) (Registered Crypto-Asset Exchange Service Provider — min. capital: JPY ¥10,000,000 minimum Stated Capital plus positive Net Assets and JVCEA self-regulatory membership.). Ongoing prudential supervision requires strict adherence to capital adequacy and liquidity buffers.
Does FFAJ provide statutory investor compensation and mandatory client asset segregation?
Under FFAJ's framework, investor protection is governed by Japan Investor Protection Fund (JIPF) & Deposit Insurance Corporation of Japan (DICJ) with maximum coverage of JPY ¥10,000,000 per retail client via JIPF (for Type I securities firms); JPY ¥10,000,000 + interest per depositor via DICJ for Japanese banks (Individual and non-institutional clients of Type I FIBOs (additionally, 100% of retail FX margin and 95%+ of customer crypto-assets are held in bankruptcy-remote Trust Banks).). For client money and custody assets, supervised firms must comply with FIEA Article 43-2 & Article 43-3 (Mandatory Trust Bank Segregation — 信託保全), performing daily calculation of required segregated amount (区分管理必要額) reconciled within 2 business days into a licensed japanese trust bank. with 100% of retail fx/cfd customer margin must be placed in a money trust with a licensed japanese trust bank (e.g., mitsubishi ufj trust, sumitomo mitsui trust, nomura trust)..
How does FFAJ regulate digital assets, crypto exchanges (VASPs/CASPs), and stablecoins?
FFAJ's digital-asset regime is structured around PSA Crypto-Asset Exchange Service Provider (CAESP), FIEA Crypto Derivatives & PSA Electronic Payment Instruments (Stablecoins) (Gold-standard statutory framework: CAESPs regulated since 2017; fiat-pegged stablecoins restricted to Banks, Trust Companies, and Fund Transfer Service Providers.). Custody and AML/CFT compliance obligations require: 95% minimum cold-wallet storage mandate; any 5% hot-wallet exposure must be backed 1:1 by same-kind proprietary crypto held as a Performance Guarantee Asset (履行保証暗号資産); full APTCP Travel Rule enforcement.
How can I verify an institution's FFAJ licence number and check our 2 recorded licence entries?
Our database currently tracks 2 licence records referencing FFAJ (2 marked regulated or registered). To verify a counterparty at the primary source, open FFAJ's official public register (http://www.ffaj.or.jp/), search by the exact reference number and legal entity name, and confirm that the firm's domain and permitted activities match its statutory authorisation.
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Statutory licensing classes, base capital rules, and investor protection summaries for FFAJ (Japan) are maintained for institutional benchmarking and do not constitute legal advice. Always verify current rulebooks and active firm authorisations directly on FFAJ’s official public register.