No-Action Letter System to serve as globalization bridge

Fourth in a series

In a previous article, I described the No-Action Letter System as a way for investors, financial institutions or any interested party to gain clarification on regulatory issues from the FSA (Kinyu-cho).

So that the reader can more fully understand the importance of the No-Action Letter System, this article will explain why it will serve as a crucial bridge between the legislative and administrative bodies as Japan's economy becomes increasingly global. In contrast to the U.S. legislative system, in Japan most bills submitted to the Diet regarding regulatory issues on financial activity are done so by the Japanese government itself and drafted in a more general style than those in the U.S. The result is that interpretation of regulatory issues in these areas is largely left to the discretion of the FSA.