Japan: Article 63 exemption and investment manager licensing
30 June 2011
Koichiro Ohashi, Koji Yamamoto and Yoshiyuki Omori of White & Case describe fund distribution in Japan and analyse the article 63 exemption from business registration requirements which is increasingly being used by offshore managers as a resource-saving technique to distribute securities in Japan, and recent amendments to the securities law in relation to fund distribution to professional investors.
Due to the strict regulations on the distribution of fund interests in Japan, raising capital in Japan has been historically challenging for offshore managers seeking Japanese investors. Under Japanese law, any person who engages in the marketing of fund interests in Japan must either be registered as a Type 1 Financial Instruments Dealer or a Type 2 Financial Instruments Dealer depending on the type of fund sought to be distributed in Japan. Furthermore, an additional filing may be necessary in connection with the offering itself if the offshore fund is an investment corporation or a unit trust.
The Qualified Institutional Investor Exemption (tekikakukikan toushikatou tokurei gyoumu, the article 63 exemption) set forth under article 63 of the financial instruments and exchange law of Japan (Law No 25 of 1948, as amended or supplemented from time to time, the FIEL). The article 63 exemption is an exemption from the business registration...
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