(4)The Commission has concluded that in Japan only the supervisory and regulatory arrangements applied to a subset of the Japanese investment firms comply with a series of operational, organisational and supervisory standards reflecting the essential elements of the Union's supervisory and regulatory arrangements applicable to investment firms. That subset of Japanese investment firms, as defined in Article 28 of the Financial Instrument and Exchange Act of Japan, engages in defined business and is referred to in Japan's legal framework as Type I Financial Instruments Business Operators (Type I FIBOs). Type I FIBOs are subject to specific rules related to registration capital requirements, as well as to ongoing risk-based capital requirements. Based on the analysis carried out, it is appropriate to consider the supervisory and regulatory requirements applied to Type I FIBOs located in Japan as at least equivalent to those applied in the Union for the purposes of Article 107(4) and Article 142(1)(4)(b) of Regulation (EU) No 575/2013.