Regulation – how to approach it? 規制~そのあるべき姿とは?

Dear readers,


I was recently interviewed by AltFi about Maneo and Maneo’s plans for its overseas operations. Here is a link to the article:


Today I would like to give my two cents on regulation. I am mainly interested in regulation in the P2P lending industry (as I am a part of it), but I believe my views can be applied to regulation in general.


In essence, the following is my main view on regulation: regulation is absolutely necessary, but the regulation needs to make sense. This might seem obvious, but all too often regulatory frameworks do not match the reality of the businesses which have to operate within them.


What is the point of regulation? Personally I feel there are two main points. The first is to protect consumers from being exposed to unnecessary risk and harm from corporations, whose number one priority is to make money, not to protect consumers (whether we like it or not, this is reality). The second is to support up-and-coming businesses and to provide a framework within which large corporations must operate.


In regard to the P2P marketplace industry, regulators in most countries are at least trying to keep up with this growing industry. For example, platforms such as RealtyMogul and RealtyShares would not exist if it wasn’t for the JOBS Act being passed a few years ago. FinTech companies are actively being promoted by the Australian Government, and the Lithuanian Government is very open to forming new laws together with the industry.

ソーシャルレンディング業界については、たいていの国の規制当局はこの業界に合わせた規制を作ろうとしています。例えば、数年前アメリカではJOBS Actという法律が施行されましたが、この法律のおかげで不動産クラウドファンディングプラットフォームであるRealtyMogulやRealtySharesは事業が展開できます。オーストラリアですとフィンテック会社は政府に積極的に後押しされており、ヨーロッパのリトアニアという国では、政府はソーシャルレンディングのプラットフォームと話し合いながら法整備をしています。

In Japan the situation is unique. The regulatory framework required for P2P platforms to operate in certainly does exist, but it is not tailored specifically to the operations or needs of these platforms. Active consultation by regulators with the industry and researchers of our industry may change this in the future, but for the time being Japanese platforms need to make do with the framework which exists.


During good economic times, businesses (and consumers on their behalf, at times) tend to claim that they are overregulated. During recessions, however, consumers claim that businesses are underregulated. Regardless of the economic cycle, the best regulation is regulation which makes sense, which is based on facts and which is flexible to the needs and reality of the industry it is supposed to regulate.


Regulators need to work together with businesses to create rules which support these businesses, and businesses need to work with regulators to ensure they are meeting their corporate social responsibility requirements. If regulators neither engage with the industry nor actively try to acquire independent data about the industry, how can they create regulations which make sense? In the end businesses operate within an unrealistic or inefficient regulatory framework, innovation is stifled and regulators are left wondering why the industry is so “uncooperative”.


In regard to our industry on a global level, there are some organisations performing very good objective research on the reality of our industry, such as the Cambridge Judge Business School (CJBS) at the University of Cambridge. The Financial Conduct Authority (FCA) in the UK is going to partner with the CJBS to gather reliable objective information about the UK P2P industry so that it can create regulations which make sense. This will help further develop the already innovative UK market.

世界のソーシャルレンディング業界については、ケンブリッジ大学のCambridge Judge Business Schoolのような団体が質の高い研究をしてくれています。金融庁のイギリス版に近いFCAがこの団体と連携して、ソーシャルレンディングについての情報を提供してもらうことになっています。これは、理にかなう規制を作るためです。この連携は、UKのソーシャルレンディング業界にとっての更なる追い風になるでしょう。

There are similar bodies in Japan conducting local research, such as Yano Research. I believe there is a need in the Japanese P2P industry for regulators to access similar valuable research, engage with the industry and improve the regulatory framework within which we operate. I am not saying this as a euphemism for deregulation – regulation is required, but it has to make sense, which is the case for any industry. I believe that our industry in Japan has huge potential to continue disrupting the ancient industry which is the Japanese financial sector. Regulators should “jump on the bandwagon,” so to speak, and help us transform this industry for the better.


One final point: regulators and industry should not be enemies. They should work together for the common good. Namely, to create an environment where businesses can operate within clear parameters and be successful, whilst consumers are protected but have access to a wide variety of products and services. No two parties can see eye-to-eye if they do not actively try to understand the other, however. This applies to both the regulators and the regulated.