By Yuki Sako
On March 4, 2016, the Cabinet of Japan approved and submitted to the Diet an amendment bill to the Banking Act of Japan that would enable banks and bank holding companies to acquire more than the permitted holding of nonbank interests (5% (banks) or 15% (bank holding companies)) of certain nonbank companies whose businesses involve innovative technologies that can be applied in banking business. Under the amendment bill, banking institutions are, with approval of the Financial Services of Agency of Japan (FSA), permitted to acquire and hold a controlling interest in various FinTech companies that would provide innovative technologies to advance banks’ operations or benefit bank customers. When proposing the amendment bill, the FSA explained that the amendment bill aims to facilitate banking institutions to invest in bank-related innovative technologies, IT technologies in particular.
The amendment bill is expected to pass the Diet during the current Diet session and to come into force within 1 year after the promulgation.
Text of the amendment bill can be found here (only in Japanese).