Japan Compliance

Regulatory Environment

Financial Instruments and Exchange Law (“FIEL”)

Enacted in 2006

  • To substantially reform pre-existing securities regulations
  • To have more comprehensive regulation of investment services including investor protection

Expansion of the Definition of Securities

  • Traditional Securities – Bonds, shares etc
  • Deemed Securities – Trust beneficiary interest, interests in collective investment structure

Application of FIEL to structured real estate finance transactions

  • Deemed Securities – Instrumental to structured real estate finance transactions
  • Registration of Financial Instruments Business Firm (“FIBF”) – Essential for conducting structured real estate finance business
Category Classification Comments
Brokerage / Placement Type 1 FIBF Brokerage & public offering/private placement of traditional securities such as bonds and shares previously categorized as Securities Broker.
Brokerage / Placement Type 2 FIBF Limited to brokerage & public offering/private placement of Deemed Securities. More popular in real estate related industry.
Investment Management Discretionary Investment Management Conduct discretionary investment management business. Fund managers for mutual funds, J-REITs etc.
Investment Management Investment Advisory Limited to provide investment advice only.