Japan's Financial Services Agency published its Progress Report 2026 on the Sophistication of Asset Management Services on July 24, laying out where it thinks the industry is still tripping over its own paperwork.
The headline recommendation is about division of labor, not investment strategy. The report argues that if asset managers are going to sharpen their investment capability, they first need an environment where they can focus on investing rather than administration. Its answer: consolidate "administrative processing and the like" into trust banks and specialist companies, with clearer allocation of tasks among the parties involved, to make operations more efficient and rational. The FSA frames this as a two-way gain, arguing the shift would also push trust banks themselves to upgrade their own operations.
The push did not come from thin air. According to the report, asset management firms themselves told the FSA that inefficiency is widespread and that what one company can fix on its own is limited; many asked for an industry-wide review rather than firm-by-firm patchwork. In response, the FSA ran a fact-finding survey to give regulators and industry a shared evidence base for future joint work on what an efficient, rationalized setup should look like.
The back-office chapter is one piece of a seven-part report that also covers sharpening institutional-investor services inside financial groups, expanding corporate research at asset management companies, further use of generative AI within those firms, ongoing monitoring of the sector, improving the environment for corporate defined-contribution and iDeCo pension plans, and supporting growth among capable, diverse private-equity funds. The report frames all of it as an extension of the government's Asset Management Nation Realization Plan, adopted in December 2023, which set out measures aimed at households, product distributors, asset managers, asset owners, and companies across the investment chain.
What the supplied excerpt does not do is name which specific back-office functions, such as trade settlement, custody records, or fund accounting, the FSA wants moved, nor does it establish that this is a repeat instruction the agency has issued before. It also does not show how the section on corporate research sophistication is framed relative to outside analysts. Those are gaps in the excerpt reviewed, not confirmed absences from the full 70-plus-page report, which readers can check directly through the FSA's linked PDFs.