The Japan Securities and Exchange Surveillance Commission has recommended that the Prime Minister and the Commissioner of the Financial Services Agency take administrative action against Durac Asset Management Co., Ltd. after an inspection found that the firm had not secured personnel with sufficient knowledge and experience or the systems needed to properly conduct its Type II financial instruments business and investment advisory and agency business. The commission found that the firm's management, compliance and internal control framework was effectively non-functioning, allowing misconduct at its sales office to go unchecked and creating grounds for supervisory measures under the Financial Instruments and Exchange Act. Among the deficiencies, board oversight had largely ceased, two of the three executives other than the representative director were not engaged in operations, and overall management of the sales office was left to a person with no knowledge or experience in financial instruments business. Seven people without employment contracts with the company, representing about 20% of sales office staff, were found to have solicited investment advisory agreements and provided related advice on domestic stocks to 100 clients, while the heads of investment management and compliance lacked visibility over sales practices, advisory records and complaint handling, and no internal audits had been conducted since January 2022. The commission also noted 48 complaints linked to crypto asset trading related activities, including claims that sales staff had facilitated trading through crypto asset exchange operators not registered with the Financial Services Agency, and found that branch staff refused without justification to submit requested materials and sought deletion of electronic data already provided, significantly obstructing the inspection.
Japan Securities and Exchange Surveillance Commission2026-06-02
Japan Securities and Exchange Surveillance Commission recommends administrative action against Durac Asset Management over control failures and inspection evasion
The Japan Securities and Exchange Surveillance Commission has recommended that the Prime Minister and the Financial Services Agency Commissioner take administrative action against Durac Asset Management Co., Ltd. for serious governance and control failures in its Type II financial instruments and investment advisory business. The inspection found non-functioning management and compliance, unqualified and non-contracted personnel soliciting and advising clients, extensive oversight and internal audit deficiencies, numerous complaints linked to crypto asset trading, and obstruction of the inspection.