JAPAN Law and Practice Contributed by: Daisuke Tanimoto, Etsuko Yamazaki and Miki Okuda, Anderson Mōri & Tomotsune
• with FIBOs conducting securities-related busi - nesses, government organisations, the Bank of Japan, FIBOs engaging in an investment manage - ment business and acting on behalf of their clients in the course of such business, banks, trust banks, insurance companies, co-operative banks, federa - tions of co-operative banks, labour credit associa - tions, federations of labour credit associations, The Norinchukin Bank, The Shoko Chukin Bank, credit associations, federations of credit associations (for their own investment purposes or for the account of a settlor (entrustor) pursuant to a trust agree - ment); • with an Eligible Financial Derivatives Investor in Japan pursuant to an order of such investor without any solicitation on the part of the Foreign Securities Dealer; or • with an Eligible Financial Derivatives Investor in Japan through a Type I FIBO acting as intermedi - ary, broker or agent without any solicitation on the part of the Foreign Securities Dealer. According to X-1-2 of the JFSA’s “Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.”, the posting by a Foreign Securities Dealer of advertisements regarding activi - ties concerning securities-related businesses on its websites will, in principle, be deemed to constitute a solicitation. However, it may not be deemed to con - stitute a solicitation aimed at investors in Japan if rea - sonable measures (as illustrated below) are taken to prevent such advertisement from resulting in activities concerning securities-related business with investors in Japan as their transaction counterparties: • Disclaimer: A disclaimer to the effect that the advertised service is not targeted at investors in Japan must be indicated. • Measures to Prevent Transactions: Measures to prevent transactions with investors in Japan regarding activities concerning securities-related businesses must be put in place. (3) Exemption from the Commodity Derivatives Business Operator licensing requirement under the CFEA As an exemption from the licensing requirement as a Commodity Derivatives Business Operator, the
CFEA provides that for OTC Commodity Derivatives Transactions, a person will not be considered to be engaging in the business of OTC Commodity Deriva - tives Transactions by acting as a principal, intermedi - ary, broker or agent in such transactions where the counterparties to such transactions are limited to the following entities (“Eligible Commodity Derivatives Investors”): • (i) Commodity Derivatives Business Operators; • (ii) Commodity Investment Advisers; • (iii) qualified institutional investors (QIIs); • (iv) Type I FIBOs; • (v) Registered Financial Institutions; • (vi) stock corporations with a paid-up capital of JPY1 billion or more; • (vii) overseas persons equivalent to (i) to (vi) above; • (viii) special purpose companies ( tokutei mokuteki kaisha ) established under the Act on the Securitisa - tion of Assets (Act No 105 of 1998, as amended) (i) whose specified share capital is JPY1 billion or more or (ii) whose specified share capital of JPY30 million or more and whose asset-backed securities are held by eligible investors only; and • (ix) subsidiaries of any of the foregoing entities. OTC Commodity Derivatives Transactions with Eligi - ble Commodity Derivatives Investors are referred to as “Excluded OTC Commodity Derivatives Transac - tions”. Under Article 349 of the CFEA, a person who engages in the business of Excluded OTC Commodity Derivatives Transactions is required to file a prior noti - fication as a Specified OTC Commodity Derivatives Transaction Dealer if the underlying assets of such transactions are related to commodities or commodity indices which are designated by the relevant author - ity (currently, commodities and commodity indices referred to by exchange-traded commodities deriva - tives listed on commodities exchanges licensed in Japan are designated). 2. Exchange-traded derivatives (1) Exemption from the FIBO registration requirement under the FIEA The exemption from the FIBO registration requirement under the FIEA in cases where the counterparties are limited to certain sophisticated investors (see 1 (1)
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