On June 14, Japan’s Securities and Exchange Surveillance
Commission announced that it had recommended that the Prime
Minister and the Commissioner of the Financial Services Agency
(“FSA”) take administrative action against MUFG Bank and MUMSS on
the basis that there was improper sharing of customer information,
improper solicitation in violation of the prohibition on engagement
in securities services by a registered financial institution, etc.,
in the management of corporate-related information in
banking-securities collaborative business between MUFG Bank and
MUMSS.
Today, the FSA announced that it has issued business improvement
orders to MUFG Bank and MUMSS under Article 51, paragraph 2 and
Article 51 of the Financial Instruments and Exchange Act, and
orders to submit reports to MUFG and MUFG Bank under Article 52,
paragraph 31-1 and Article 24, paragraph 1, of the Banking Act.
We sincerely apologize for the inconvenience and concern this is
causing our customers and other stakeholders.
MUFG has been promoting Group collaboration, including between
MUFG Bank and MUMSS, to realize customer-centric sales activities
that leverage the Group’s collective strengths. However, we
recognize that our management systems were insufficient for the
reality of banking-securities collaborative business at our major
subsidiaries MUFG Bank and MUMSS and are deeply aware that this
situation was a catalyst for these incidents.
MUFG, MUFG Bank, and MUMSS take this administrative action very
seriously, and all three will further strengthen their frameworks
and enact more effective policies for legal compliance, etc.,
related to banking-securities collaborative business to prevent
recurrence.
Specifically, as an outline of the measures, we are considering
using training and study sessions to thoroughly disseminate
information internally as soon as possible, formulating and
disseminating procedures and rules suited to actual cases and
conditions in the short-term, and will strengthen monitoring
systems, including system development, in the medium- to
long-term.
MUFG, MUFG Bank, and MUMSS plan to submit business improvement
plans and reports related to this issue to the FSA based on these
business improvement orders and orders to submit reports, and will
make an announcement when they have done so.
Details of the FSA’s
administrative action
1.
Regarding the administrative
action against MUFG Bank (Article 51, paragraph 2 of the Financial
Instruments and Exchange Act)
Business improvement order
(1)
In order to ensure sound and
appropriate operation of business with respect to this matter, we
shall implement the following.
A.
Clarify where responsibility
lies, including of management, in light of these administrative
actions.
B.
Promptly develop and steadily
implement an effective business improvement plan, based on an
analysis of the fundamental causes of these incidents, including
the following points, to prevent recurrence:
- Strengthen internal control systems including management
systems, legal compliance systems related to banking-securities
collaboration, and customer information management systems.
(2)
Report the implementation status
of A and the business improvement plan in writing by July 24,
2024.
(3)
Report the implementation status
of B in the immediate future, no later than within 15 days from the
end of the quarter.
2.
Regarding the administrative
action against MUMSS (Article 51 of the Financial Instruments and
Exchange Act)
Business improvement order
(1)
In order to ensure sound and
appropriate operation of business with respect to this matter, we
shall implement the following.
A.
Clarify where responsibility
lies, including of management, in light of these administrative
actions.
B.
Promptly develop and steadily
implement an effective business improvement plan, based on an
analysis of the fundamental causes of these incidents, including
the following points, to prevent recurrence:
- Strengthen internal control systems including management
systems, legal compliance systems related to banking-securities
collaboration, etc., and customer information management
systems.
(2)
Report the implementation status
of A and the business improvement plan in writing by July 24,
2024.
(3)
Report the implementation status
of B in the immediate future, no later than within 15 days from the
end of the quarter.
3.
Regarding the order to MUFG to
submit report (Article 52, paragraph 31-1 of the Banking Act)
Order to submit report
(1)
In order to ensure sound and
appropriate operation of business with respect to this matter, we
shall implement the following.
A.
Confirm the facts of the
recognized incidents at MUFG’s subsidiary MUFG Bank related to the
prohibition on engaging in other business as specified in Article
12 of the Banking Act and management of customer information as
specified in Article 12, paragraph 2-2 of the Banking Act, analyze
their causes (including background causes) as MUFG Bank’s parent
company, and identify issues based on these analyses.
B.
Promptly develop and steadily
implement effective improvement measures based on these incidents,
including the following points, to prevent recurrence (including a
plan for implementing improvement measures, implementation status,
etc.):
- Strengthen internal control systems including management
systems, legal compliance systems related to banking-securities
collaboration, and customer information management systems.
(2)
Report the implementation status
of A and the business improvement plan in writing by July 24,
2024.
(3)
Report the implementation status
of B in the immediate future, no later than within 15 days from the
end of the quarter.
4.
Regarding the order to MUFG Bank
to submit report (Article 24, paragraph 1 of the Banking Act)
Order to submit report
(1)
In order to ensure sound and
appropriate operation of business with respect to this matter, we
shall implement the following.
A.
Confirm the facts of the
recognized incidents related to the prohibition on engaging in
other business as specified in Article 12 of the Banking Act and
management of customer information as specified in Article 12,
paragraph 2-2 of the Banking Act, analyze their causes (including
background causes), and identify issues based on these
analyses.
B.
Promptly develop and steadily
implement effective improvement measures based on A, including the
following points, to prevent recurrence (including a plan for
implementing improvement measures, implementation status,
etc.):
- Strengthen internal control systems including management
systems, legal compliance systems related to banking-securities
collaboration, and customer information management systems.
(2)
Report the implementation status
of A and the business improvement plan in writing by July 24,
2024.
(3)
Report the implementation status
of B in the immediate future, no later than within 15 days from the
end of the quarter.
- End –
About MUFG
Mitsubishi UFJ Financial Group, Inc. (MUFG) is one of the
world’s leading financial groups. Headquartered in Tokyo and with
over 360 years of history, MUFG has a global network with
approximately 2,000 locations in more than 40 countries. The Group
has about 120,000 employees and offers services including
commercial banking, trust banking, securities, credit cards,
consumer finance, asset management, and leasing. The Group aims to
“be the world’s most trusted financial group” through close
collaboration among our operating companies and flexibly respond to
all of the financial needs of our customers, serving society, and
fostering shared and sustainable growth for a better world. MUFG’s
shares trade on the Tokyo, Nagoya, and New York stock exchanges.
For more information, visit https://www.mufg.jp/english.
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version on businesswire.com: https://www.businesswire.com/news/home/20240624761879/en/
MUFG Bank, Ltd. Toshinao Endou, +81-3-3240-1111 Managing
Director, Head of Documentation & Corporate Secretary
Department Corporate Administration Division