Japan STO Association Releases New Regulatory Guidelines

On April 20, the Japan Security Token Offering, or STO, Association revealed that it had published new guidelines to protect clients’ assets and privacy.

The Japan Security Token Offering Association (JSTOA) has just released self-regulatory guidelines on how to separate customer assets and electronic record transfer rights.

Available on the JSTOA website on April 20, the association attributes the guidelines to the revisions of the country’s Financial Instruments and Exchange Act (FIEA), released by the Japanese House of Representatives and scheduled for entry into force on May 1.

At a meeting including employees and the Board of Directors, the association presented the rules for electronic record transfer rights and management of customer assets, among others. The JSTOA will examine the management of separately held customer assets once in a month with certified public accountants and audits.

Furthermore, as part of their prevention against investment solicitation, the association is urging to create a clearer definition of selling digital assets to elderly customers — those at risk for fraud — and to make the efforts to create guidelines for solicitation.

Crypto regulatory enforcement coming soon

New laws for regulating cryptocurrencies in Japan are being enforced. The FIEA and Payment Services Act, both revisions to current financial legislation, will be enacted in May.

Headquartered in Tokyo, the JSTOA was established in October 2019 to support the development of security token offering fundraising by consolidating expertise from within the industry, ensuring compliance with laws and protecting customers. The association is supported by large financial corporations in the country like Nomura Securities, Rakuten Securities, SBI Securities, Monex, and others.