meta_id 3161980

On May 18, 2026, Japan's Financial Services Agency (FSA) published the results of a public consultation on proposed guidance regarding business-focused lending based on trust relationships between businesses and financial institutions. The FSA received 14 comments during the consultation period, which ran from April 10, 2026 to May 10, 2026. The guidance addresses the implementation of the Act on Promotion of Business-Focused Lending, which comes into effect on May 25, 2026. The act introduces corporate value pledge rights as a financing option for lending based on business future prospects. The FSA's guidance document consolidates practical discussions that accumulated during the legislative and implementation stages, establishing fundamental principles regarding trust relationships and communication between businesses and financial institutions, as well as guidance on utilising corporate value pledge rights. The document reflects accumulated discussions from the law's development phase through implementation preparation.  Key changes include: Ongoing dialogue is mandatory - Lenders must maintain continuous communication with borrowers throughout the loan lifecycle sharing forward-looking business assessments, not just reviewing historical financials at origination. Future prospects can now drive credit ratings - The new enterprise value charge gives lenders a legal basis to weight qualitative, forward-looking information in borrower classifications, reducing reliance on past losses or balance sheet metrics. Trial and error is explicitly encouraged - The FSA wants quality over quantity in uptake, expects imperfect early implementation, and commits to publishing case studies and updating the principles as practice matures. The FSA amended its comprehensive supervisory guidelines for major financial institutions and for small and medium-sized regional financial institutions to align with the new framework. The guidance applies from May 25, 2026, coinciding with the act's enforcement date. The FSA published the consultation summary, responses to comments, the full guidance document, an overview document, and amended supervisory guidelines for both major institutions and regional financial institutions. Enquiries regarding the guidance can be directed to the FSA's Business-Focused Lending Promotion Office within the Supervisory Bureau General Affairs Division.