A client may be dissatisfied with an explanation or solicitation and turn to a channel outside the securities firm. The financial institution is then expected to respond to the outside organization's requests to investigate and to take part in its procedures. Handling this calls for an understanding of the path from complaint to settlement or lawsuit, and of the institution's obligations.

Why there are outside channels for complaints and disputes

The Financial Services Agency (FSA) lists, as one purpose of financial ADR, that the authorities designate and supervise the dispute resolution organizations, which ensures their neutrality and fairness1.

A complaint (the Act's complaint processing procedure) and mediation (the Act's dispute resolution procedure) are separate procedures. A complaint is a client's expression of dissatisfaction; mediation is a procedure in which an outside organization steps in to seek a resolution. The Act defines the former as the procedure for processing complaints about services related to financial instruments business, etc., and the latter as the procedure for resolving, without court proceedings, disputes that the parties can settle2.

Using complaint data and content to strengthen an organization's controls is covered in Conduct Risk.

From complaint to resolution

The path a client follows at FINMAC, from consultation to dispute resolution, is as follows3.

  1. The client contacts FINMAC by phone, fax, website, or mail. A consultation officer gives advice and, if the matter is a complaint, refers it on4.
  2. The consultation officer tells the financial institution about the complaint and asks it to investigate.
  3. The financial institution or the consultation officer reports the result of the investigation to the client.
  4. If the client is not satisfied with the result, the case moves to FINMAC's mediation procedure. The client submits a mediation application, and FINMAC notifies the client that it has been accepted.
  5. The client pays the filing fee, and a mediator who is a lawyer (the "dispute resolution mediator" in the Act5) hears from the client and from the financial institution.
  6. The mediator presents a settlement proposal, and if both sides agree, they sign a settlement agreement.
ClientFINMACInstitutionContact FINMACby phone, etc.Tell institutionof complaint, askit to investigateReport the resultto the client(or FINMAC staff)If dissatisfied,submit a mediationapplicationNotify acceptancePay the filing feeMediator hearsboth sidesMediator presentsa settlementproposalIf both agree,sign a settlementagreement
Figure 1From a complaint to FINMAC to a settlement
Figure description

The figure arranges steps 1 to 6 above by who carries them out: the client, FINMAC, or the financial institution (the Institution lane). In step 3, the report may be made by a FINMAC consultation officer as well as by the financial institution. If either side does not accept the settlement proposal, the procedure ends without a settlement.

Even when the financial institution answers the client directly in step 3, FINMAC receives from the financial institution a report on the result of its complaint processing. If the client is not satisfied with the institution's answer, FINMAC urges the parties to talk further and, if the client wishes, instructs the financial institution to respond further6. On the legal side, when a designated dispute resolution organization receives an application from a client to resolve a complaint, the Act requires it to provide consultation and advice, investigate the circumstances, and notify the financial institution of the complaint and request prompt processing7.

How the financial ADR system works

Financial ADR (alternative dispute resolution) is a system for resolving disputes between a financial institution and a user by means other than court. A dispute resolution organization designated by the authorities for each type of business, such as banking, insurance, and securities, handles them through settlement proposals from dispute resolution mediators such as lawyers1. When a user files an application, the system ensures effective resolution by asking the financial institution to take part in the procedure and to respect the settlement proposal. It also secures expertise by having dispute resolution mediators with knowledge of the financial field handle cases1.

Designation under the Financial Instruments and Exchange Act works as follows.

  • On application, the Prime Minister may designate a corporation that meets the requirements set by the Act as the organization that conducts "dispute resolution services, etc."8.
  • A designated organization (a designated dispute resolution organization) sets operational rules. A change to the operational rules requires the Prime Minister's approval, and a change made without approval has no effect9.
  • A financial institution enters into a basic contract for the implementation of dispute resolution procedures with a designated dispute resolution organization. The contract includes terms under which the financial institution takes part in the procedure when the organization asks it to9.
  • Dispute resolution procedures are not open to the public10.

On the FSA's list, as of October 3, 2026, the only organization shown as designated under the Act with the category specified Type I financial instruments business is FINMAC. The list also includes organizations for each type of business, such as the Japanese Bankers Association for banking and the Life Insurance Association of Japan for life insurance11. FINMAC states that it does not handle disputes about deposit products or insurance products, which go to the financial ADR bodies such as the Japanese Bankers Association, the Life Insurance Association of Japan, and the General Insurance Association of Japan12.

FINMAC's scope and how mediation proceeds

FINMAC is the abbreviation of the Non-Profit Organization, Financial Instruments Mediation Assistance Center. It received designation as a designated dispute resolution organization from the Commissioner of the Financial Services Agency on February 15, 2011, and began its work as a designated dispute resolution organization on April 1, 201113.

The businesses FINMAC covers fall into three groups.

Group Description
Member Type I financial instruments business operators Type I financial instruments business operators that have entered into a basic contract for the implementation of dispute resolution procedures with FINMAC. They include security token offering (STO) handlers, crypto-asset derivatives operators, FX-only operators, and securities firms
Agreement operators Members, etc. of six financial instruments business associations, including the Japan Securities Dealers Association. FINMAC handles their cases under entrustment from the associations
Specified operators Type II financial instruments business operators, etc. that have separately registered with FINMAC to use its services

This grouping comes from FINMAC's published pages1412. FINMAC states that it does not accept complaints or disputes about the business of operators outside these groups6. It also does not give investment advice or answer inquiries about share prices15.

Mediation is a procedure in which a fair and neutral lawyer serving as mediator hears from both sides and encourages a resolution through discussion. The mediator hears from the parties individually or facilitates a discussion with both present, and presents a settlement proposal. If neither side moves toward the other, the mediation ends without agreement16. From the time it receives an application, FINMAC aims to conclude the case within four months where possible15.

The client pays the filing fee within 10 days after receiving notice that the mediation application has been accepted. If the client does not pay by the deadline, the application is deemed not to have been filed. The fee paid is not refunded, except when the application is withdrawn before the mediation session17.

The filing fee depends on the amount of damages the client claims from the financial institution. Part of FINMAC's fee schedule (including consumption tax; checked on October 3, 2026) is shown below. The financial institution, as the respondent, does not bear a fee for taking part in the mediation17.

Amount claimed Filing fee
1 million yen or less 2,090 yen
Over 5 million yen up to 8 million yen 11,550 yen
Over 50 million yen 52,360 yen

Consultation and complaint processing are free of charge15.

FINMAC describes mediation as a simpler and quicker procedure than court. At the same time, because it rests on the parties' consent, resolution through discussion is difficult when the two sides' positions differ greatly, and it does not find facts or carry the binding force of a court16.

The Act also provides for cases in which the mediator does not carry out the procedure. The mediator does not carry out the procedure when the mediator finds it inappropriate, for example because the client is found to have the ability to resolve the dispute properly. The same applies when the mediator finds that a party filed the application without good reason and for an unjust purpose18.

Obligations of financial institutions

A financial instruments business operator engaged in Type I financial instruments business must, when a designated Type I dispute resolution organization exists, take measures to enter into a basic contract for the implementation of dispute resolution procedures with one of them. Once it has done so, it publishes the name of that organization19. It applies to Type I financial instruments business operators other than registered financial institutions, and leads to a contract with FINMAC14.

The basic contract for the implementation of dispute resolution procedures includes the terms the Act prescribes9.

Term What it means for the financial institution
Taking part in the procedure When the organization or the mediator asks it to take part, it may not refuse without just cause
Submitting materials When asked to submit reports, books and documents, and the like, it may not refuse without just cause
Reporting litigation (pending) When a procedure begins for a claim in pending litigation, it reports the pending litigation, the grounds for the claim, and the progress of the litigation to the organization
Reporting litigation (filed) When litigation is filed on a claim that was the subject of the procedure, it reports that fact and the grounds for the claim (the progress is not included)
Informing clients It provides the necessary information and takes other measures to inform clients of the organization's dispute resolution services, etc.

On settlement proposals, the mediator may prepare a settlement proposal and recommend that the parties accept it. If there is no prospect of a settlement, and the mediator finds it reasonable in light of the nature of the case and the parties' intentions, the mediator may present a special conciliation proposal with reasons. The financial institution must accept a special conciliation proposal, except in the cases the Act lists, such as when the client does not accept it9.

Mediation and court

The Financial Instruments and Exchange Act has provisions on prescription after a dispute resolution procedure and on court proceedings that are already pending.

What matters after a procedure ends is the postponement of completion of prescription. This is the Civil Code rule that prescription does not expire while certain grounds exist21. Suppose the dispute resolution mediator ends the procedure because there is no prospect of a settlement and notifies the party that filed the application. If that party sues on the claim that was the subject of the procedure within one month from the day it receives the notice, the action is treated, for the postponement of completion of prescription, as having been filed at the time the claim was made in the procedure22.

Suspension of court proceedings concerns the case where litigation already exists. When litigation is pending between the parties, a ground such as a dispute resolution procedure being carried out exists, and the parties jointly petition, the court in charge of the case may decide to suspend the proceedings for a fixed period of no more than four months23.

Example: filing for mediation with a claim of 6 million yen

Consider a hypothetical example in which a client of the securities subsidiary of Bank A (fictional) files for mediation, claiming 6 million yen in damages because the client cannot accept the explanation given for a derivative transaction. The subsidiary is a Type I financial instruments business operator with a basic contract with FINMAC for the implementation of dispute resolution procedures. This example does not consider whether the claim is justified.

  • Filing fee: A claim of 6 million yen falls in the "over 5 million yen up to 8 million yen" row of the fee schedule, so the fee is 11,550 yen. The client pays it within 10 days after the notice of acceptance arrives. The respondent securities subsidiary does not bear a fee for taking part in the mediation.
  • The financial institution's side: Because of the basic contract, it may not refuse, without just cause, when FINMAC or the mediator asks it to take part in the procedure.
  • If the result is a settlement: If both sides agree to the settlement proposal, they sign a settlement agreement and the case ends. The filing fee paid is not refunded, except when the application is withdrawn before the mediation session.
  • If the result is no settlement: Suppose the mediator ends the procedure because there is no prospect of a settlement and notifies the client. If the client files an action on the same claim within one month from the day the client receives that notice, the action is treated, for the postponement of completion of prescription, as having been filed at the time the claim was made in the mediation. The filing fee is not refunded in this case either.

Whether the case ends in a settlement or not changes what the client bears and the choices open afterward.

What this page does not cover

Complaint and dispute channels for registered financial institutions such as banks are not covered on this page.

Notes

  1. Financial Services Agency, "金融ＡＤＲ制度について" (On the financial ADR system, in Japanese; PDF, 1 page), "金融ＡＤＲ制度のイメージ" (Image of the financial ADR system) and "金融ＡＤＲ制度の趣旨" (Purpose of the financial ADR system). ↩ ↩2 ↩3

  2. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese; English translation: Japanese Law Translation), Article 156-38, paragraph 9 (complaint processing procedures), paragraph 10 (dispute resolution procedures), and paragraph 11 (dispute resolution services, etc.). ↩

  3. Non-Profit Organization, Financial Instruments Mediation Assistance Center, "相談等の流れ" (The flow of consultation, etc., in Japanese; checked October 3, 2026), "苦情解決の流れ" (The flow of complaint resolution) and "納得いかない場合（あっせん手続きへの移行）" (If you are not satisfied (moving to the mediation procedure)). ↩

  4. Non-Profit Organization, Financial Instruments Mediation Assistance Center, "苦情処理・紛争解決支援" (Complaint handling and dispute resolution support, in Japanese; checked October 3, 2026), the ways to make contact (phone, website consultation form, fax, mail). Mail also appears in the "利便性" (Convenience) column of "フィンマックとは" (About FINMAC, in Japanese). ↩

  5. Non-Profit Organization, Financial Instruments Mediation Assistance Center, "紛争解決等業務の質の向上への取組み" (Efforts to improve the quality of dispute resolution services, in Japanese; checked October 3, 2026), "紛争解決委員（あっせん委員）の選任について" (On the appointment of dispute resolution mediators (called mediators at FINMAC)). ↩

  6. Non-Profit Organization, Financial Instruments Mediation Assistance Center, "苦情処理・紛争解決支援" (in Japanese; checked October 3, 2026), "相談（質問）・苦情について" (On consultations (questions) and complaints). ↩ ↩2

  7. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese), Article 156-49. ↩

  8. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese), Article 156-39, paragraph 1. ↩

  9. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese), Article 156-44. Approval of a change to the operational rules is in paragraph 7; the content of the basic contract for the implementation of dispute resolution procedures is in paragraph 2 (reporting of litigation: items 6 and 7); acceptance of a special conciliation proposal is in paragraph 2, item 5 and paragraph 6. ↩ ↩2 ↩3 ↩4

  10. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese), Article 156-50, paragraph 7 (not open to the public; with the parties' consent, the mediator may allow attendance by a person the mediator considers appropriate). ↩

  11. Financial Services Agency, "指定紛争解決機関一覧" (List of designated dispute resolution organizations, in Japanese; checked October 3, 2026), "紛争解決機関としての指定を受けた団体の一覧" (List of bodies designated as dispute resolution organizations). ↩ ↩2

  12. Non-Profit Organization, Financial Instruments Mediation Assistance Center, "フィンマックの業務内容" (FINMAC's services, in Japanese; checked October 3, 2026), "指定第 1 種紛争解決機関としての業務" (Services as a designated Type I dispute resolution organization) and "金融商品取引法上の金融商品取引業協会からの委託を受けた業務" (Services entrusted by financial instruments business associations under the Act). ↩ ↩2

  13. Non-Profit Organization, Financial Instruments Mediation Assistance Center, "指定紛争解決機関として" (As a designated dispute resolution organization, in Japanese; checked October 3, 2026), "指定紛争解決機関の指定取得について（平成 23 年 2 月 15 日）" (On obtaining designation as a designated dispute resolution organization, February 15, 2011) and "指定紛争解決機関としての業務開始について（平成 23 年 4 月 1 日）" (On starting work as a designated dispute resolution organization, April 1, 2011). ↩

  14. Non-Profit Organization, Financial Instruments Mediation Assistance Center, "対象とする事業者" (Operators covered, in Japanese; checked October 3, 2026), "加入第１種金融商品取引業者" (Member Type I financial instruments business operators), "協定事業者" (Agreement operators), and "特定事業者" (Specified operators). ↩ ↩2

  15. Non-Profit Organization, Financial Instruments Mediation Assistance Center, "フィンマックとは" (About FINMAC, in Japanese; checked October 3, 2026), "フィンマック 5 つの特色" (FINMAC's five features) and "どんな相談にのってもらえるの？" (What kind of consultation can I get?). ↩ ↩2 ↩3

  16. Non-Profit Organization, Financial Instruments Mediation Assistance Center, "あっせんとは" (What is mediation, in Japanese; checked October 3, 2026), "あっせんとは？" (What is mediation?) and "あっせんと裁判の違い" (Differences between mediation and court). ↩ ↩2

  17. Non-Profit Organization, Financial Instruments Mediation Assistance Center, "あっせん申立ての料金表" (Fee schedule for mediation applications, in Japanese; checked October 3, 2026). Payment of the filing fee is under Article 32 of FINMAC's mediation rules. ↩ ↩2

  18. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese), Article 156-50, paragraph 4, proviso. ↩

  19. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese), Article 37-7, paragraph 1, item 1 (Type I financial instruments business; (a) is the case where a designated organization exists and (b) the case where none exists) and paragraph 2 (publication). Items 2 to 5 set out measures of the same structure for persons engaged in other businesses. ↩ ↩2

  20. "金融商品取引業等に関する内閣府令" (Cabinet Office Order on Financial Instruments Business, etc., in Japanese), Article 115-3, paragraph 1, item 1, and items 2 to 5 of the same paragraph (other measures, such as complaint resolution by an association or a certified investor protection organization). ↩

  21. "民法" (Civil Code, in Japanese; English translation: Japanese Law Translation), Article 147, paragraph 1 (prescription does not expire while grounds such as demand by litigation exist). Other grounds include a notice demanding performance (Article 150) and a written agreement to hold discussions (Article 151). ↩

  22. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese), Article 156-51, paragraph 1. ↩

  23. "金融商品取引法" (Financial Instruments and Exchange Act, in Japanese), Article 156-52, paragraph 1. ↩