The supervisory guidelines call for explaining how the product works and its risks, early termination, and the termination payment, for example by giving the client a document. The institution decides what the document contains12. It is separate from the pre-contract document, whose contents are set by law.

"Product explanation" is not a term used in the law. This site uses this name for the document.

Notes

  1. Financial Services Agency, "金融商品取引業者等向けの総合的な監督指針" (Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.) (October 2026), IV-3-3-2(6)① and ② (pages 164–165) (in Japanese). ↩

  2. Financial Services Agency, "主要行等向けの総合的な監督指針" (Comprehensive Guidelines for Supervision of Major Banks, etc.) (October 2026), III-3-3-1-2(2)①イ, items a and b (pages 217–218) (in Japanese). ↩