Payment Services Act

When a funds transfer service provider has concluded a trust agreement for repayment in place of security deposits for providing funds transfer services (meaning a trust agreement whose purpose is to apply the trust property, when a petition for commencement of bankruptcy proceedings, etc. is filed against the funds transfer service provider, to the repayment of all or part of the obligations that the funds transfer service provider bears to all or part of the users of that category of funds transfer services with regard to funds transfer transactions pertaining to those funds transfer services, and which states that the trust company, etc. carries out necessary acts including the management of the trust property for achieving that purpose; the same applies in this Chapter) with a trust company, etc. for each category of funds transfer services that it provides and has notified the Prime Minister to that effect, it may choose not to make all or part of the security deposits for providing funds transfer services for the relevant category of funds transfer services with regard to the amount of obligations that the trust property is to be applied to repay under that trust agreement for repayment in place of security deposits for providing funds transfer services (hereinafter referred to as the "amount of the trust for repayment in place of security deposits" in this Chapter; or, if that amount of the trust for repayment in place of security deposits exceeds the amount of the trust property, the amount of that trust property), limited to the period during which the trust property is held in trust under that trust agreement for repayment in place of security deposits for providing funds transfer services.

A trust agreement for repayment in place of security deposits for providing funds transfer services must include the following particulars:

the beneficiaries are to be the users of funds transfer transactions carried out by the funds transfer service provider that is the party to the trust agreement for repayment in place of security deposits for providing funds transfer services (limited to funds transfer transactions for the category of funds transfer services pertaining to the trust agreement for repayment in place of security deposits for providing funds transfer services);

an agent of the beneficiaries is appointed;

in response to an order by the Prime Minister, a trust company, etc. realizes the trust property and deposits all or part of the amount of the trust for repayment in place of security deposits (or, if that amount of the trust for repayment in place of security deposits exceeds the amount realized from the trust property held in trust under the trust agreement for repayment in place of security deposits for providing funds transfer services, the amount realized from that trust property), in lieu of repayment to the beneficiaries under the trust agreement for repayment in place of security deposits for providing funds transfer services; and

other particulars specified by Cabinet Office Order.

The provisions of Article 45, paragraph (3) apply mutatis mutandis to the trust property held in trust under a trust agreement for repayment in place of security deposits for providing funds transfer services.

When the Prime Minister finds it necessary for the protection of the interests of users of funds transfer services, the Minister may order the persons set forth in the following items to deposit all or part of the amounts specified in those respective items.

a funds transfer service provider that has concluded a guarantee contract for security deposits for providing funds transfer services, or the counterparty to that guarantee contract for security deposits for providing funds transfer services: the secured amount;

a funds transfer service provider that has concluded a trust agreement for security deposits for providing funds transfer services, or the counterparty to that trust agreement for security deposits for providing funds transfer services: the amount realized from the trust property held in trust under the trust agreement for security deposits for providing funds transfer services;

a funds transfer service provider that has concluded a performance guarantor's debt assumption contract, or the counterparty to that performance guarantor's debt assumption contract: the performance guarantor's debt assumption amount;

a funds transfer service provider with respect to whose obligations in relation to funds transfer transactions pertaining to the funds transfer services that it provides a performance guarantor's guarantee contract has been concluded, or the person qualified as a performance guarantor that has concluded that performance guarantor's guarantee contract: the performance guarantor's guarantee amount;

a funds transfer service provider that has concluded a trust agreement for repayment in place of security deposits for providing funds transfer services, or the counterparty to that trust agreement for repayment in place of security deposits for providing funds transfer services: the amount of the trust for repayment in place of security deposits (or, if that amount of the trust for repayment in place of security deposits exceeds the amount realized from the trust property held in trust under the trust agreement for repayment in place of security deposits for providing funds transfer services, the amount realized from that trust property).

All or part of the security deposits for providing only one type of funds transfer service may be recovered, pursuant to the provisions of Cabinet Order, if any of the requirements specified in the following items are satisfied:

when the amount required for deposit (meaning the amount of security deposits for providing funds transfer services which must be made by a funds transfer service provider, pursuant to the provisions of Article 43, paragraph (1)) as of the immediately preceding base date (for type I funds transfer services, as of each business day) is less than the total amount of security deposits for providing funds transfer services, the secured amount, the amount of trust property specified in Article 45, paragraph (1), the performance guarantor's debt assumption amount, the performance guarantor's guarantee amount and the amount of the trust for repayment in place of security deposits (or, if that amount of the trust for repayment in place of security deposits exceeds the amount of trust property held in trust under the trust agreement for repayment in place of security deposits for providing funds transfer services, that amount of trust property) as of that base date;

when the procedure for the fulfillment of the right specified in Article 59, paragraph (1) is completed; and

the case specified by Cabinet Order, as the case in which the performance of obligations borne in relation to funds transfer transactions is completed.

Beyond what is provided for in this Section, a change of official depository for security deposits for providing funds transfer services due to the change of the location of the head office of a funds transfer service provider and other particulars necessary for making the security deposits for providing funds transfer services are prescribed by Cabinet Office Order and Ministry of Justice Order.

A funds transfer service provider must, pursuant to the provisions of Cabinet Office Order, take necessary measures for preventing leakage, loss, or damage of information pertaining to the funds transfer services and otherwise ensuring safe control of the handling of that information.

If a funds transfer service provider entrusts (including the case under multi-tier entrustment arrangements) part of the funds transfer service to a third party, the funds transfer service provider must provide guidance to the third party to whom the relevant business has been entrusted and take other measures necessary for ensuring the operation of the business in a proper and steady manner pursuant to the provisions of Cabinet Office Order.

A funds transfer service provider must, pursuant to the provisions of Cabinet Office Order, provide explanation to prevent users from mistaking its business for funds transfer transactions carried out by a Deposit-Taking Institution, and provide information about fees and other terms and conditions of contracts related to the funds transfer services and take measures not to hold part of funds received from users that is found unlikely to be used for funds transfer transactions or other measures necessary for protecting the users of funds transfer services and ensuring the proper and secure conduct of funds transfer services.

A funds transfer service provider (limited to a person providing type I funds transfer services; the same applies in the following paragraph) must not bear obligations in relation to funds transfer transactions (limited to funds transfer transactions pertaining to type I funds transfer services; the same applies in the following paragraph) for which the amount of funds to be transferred, the day on which the funds are transferred, and other particulars specified by Cabinet Office Order are not clear to users of type I funds transfer services.

A funds transfer service provider must not bear obligations in relation to funds transfer transactions beyond the period necessary for processing the transfer of funds or another period specified by Cabinet Office Order.

A funds transfer service provider (limited to a person providing type III funds transfer services) must not bear obligations (limited to obligations borne in relation to funds transfer transactions pertaining to type III funds transfer services) in an amount exceeding the amount for users of type III funds transfer services specified by Cabinet Order.

A funds transfer service provider must take the measures specified in the following items according to the categories of cases set forth therein:

if one or more designated dispute resolution organizations for funds transfer services (meaning designated dispute resolution organizations for which the category of dispute resolution services is a funds transfer service; hereinafter the same applies in this Article) exist:measures to conclude a basic contract for execution of procedures with a designated dispute resolution organization for funds transfer service (meaning a basic contract for execution of procedures prescribed in Article 99, paragraph (1), item (viii); the same applies in the following paragraph) pertaining to the funds transfer service; or

if no designated dispute resolution organization for funds transfer services exists:complaint processing measures and dispute resolution measures pertaining to the funds transfer service.

If a funds transfer service provider implements measures to conclude a basic contract for execution of procedures pursuant to the provisions of the preceding paragraph, the funds transfer service provider must publicly announce the trade name or other name of the designated dispute resolution organization for funds transfer services that is the counterparty to the basic contract for execution of procedures.

The provisions of paragraph (1) do not apply during the period specified in the following items according to the respective categories of cases prescribed therein:

if a funds transfer service provider who initially fell under paragraph (1), item (i) has come to fall under paragraph (1), item (ii):A period specified by the Prime Minister as that necessary for taking measures specified in paragraph (1), item (ii) when authorization is granted for the discontinuation of the dispute resolution services referred to in Article 52-83, paragraph (1) of the Banking Act as applied mutatis mutandis pursuant to Article 101, paragraph (1) following the deemed replacement of terms or designation is revoked pursuant to the provisions of Article 100, paragraph (1);

if a funds transfer service provider falls under paragraph (1), item (i), when authorization is granted for the discontinuation of the dispute resolution services by the Designated Dispute Resolution Organization for Funds Transfer Services mentioned in that item of Article 52-83, paragraph (1) of the Banking Act as applied mutatis mutandis pursuant to Article 101, paragraph (1) following the replacement of terms or the designation granted to the Designated Dispute Resolution Organization for Funds Transfer Services under the provision of Article 99, paragraph (1) is revoked pursuant to the provisions of Article 100, paragraph (1) (excluding the case specified in the preceding item):A period specified by the Prime Minister as the period necessary for taking measures specified in paragraph (1), item (i) at the time of the authorization or revocation; or

if a funds transfer service provider who initially fell under paragraph (1), item (ii) has come to fall under paragraph (1), item (i):A period specified by the Prime Minister as the period necessary for taking measures specified in paragraph (1), item (i) when designation is granted under the provisions of Article 99, paragraph (1).

The term "complaint processing measures" as used in paragraph (1), item (ii) means having a person specified by Cabinet Office Order as one who has expert knowledge and experience with regard to consultation regarding complaints on consumer affairs that the consumer made against the service provider or in other areas of consumer affairs, to provide advice or guidance to employees or other workers who engage in the business of processing complaints from the users or any other measures specified by Cabinet Office Order as similar thereto.