JAPAN Law and Practice Contributed by: Raku Raku, Gen Takahashi, Yoshihiro Morisato and Taku Matsumoto, Anderson Mōri & Tomotsune
• require an inspection of the books, records and shareholders’ register of the company; • require the convocation of the general sharehold - ers’ meeting and to submit an agenda for that meeting; • initiate a shareholders’ lawsuit; • request the suspension of illegal conduct by direc - tors; and • request the dismissal of directors and corporate auditors in certain cases. 4.3 Disclosure and Reporting Obligations A stock company must provide its annual financial statements at its head office and branch offices at least two weeks before its annual shareholders’ meet - ing. Furthermore, a stock company shall publicly dis - close a summary of its balance sheet (in the case of a large company, the balance sheet and profit and loss statement) for each fiscal year. In addition, changes to certain matters such as an increase of paid-in capital and amendments to the articles of incorporation shall be registered with the relevant authorities. A public stock company must undertake more strin - gent disclosure obligations, such as: • business operation and financial statements must be disclosed to the general public on a quarterly basis in accordance with the FIEA; and • any material information – such as a merger, cor - porate split or declaration of dividends – must also be disclosed in a timely manner in accordance with the listing rules. The main equity market in Japan is the Tokyo Stock Exchange (TSE), established in 1878. The TSE has had three market divisions – Prime Market, Standard Market and Growth Market – effective from 4 April 2022. Aside from capital markets, bank financing is another way to access funds. Companies will typically choose whether to raise funds through capital markers or debt financing, based on various factors such as interest 5. Capital Markets 5.1 Capital Markets Overview
rates, relationships between banks, funding costs, shareholders’ intentions, or overall trends in capital markets. 5.2 Securities Regulation The key statutes and regulations affecting the securi - ties markets in Japan are set out below. The FIEA The FIEA regulates the issuance, placement and trad - ing of securities, such as corporate shares, corporate bonds, and interests or shares in investment trusts and investment corporations. It also regulates the primary and secondary markets of such securities in Japan. The FIEA regulates financial transactions in a cross-sectoral manner including various derivatives, commodity funds, partnerships, investment advisory/ management services, investment trusts, etc. The FIEA also regulates the dealing, brokering, under - writing and distribution (acting as a selling group member in a public offering), and arranging of private placement of FIEA Securities by foreign securities firms. The Act on Investment Trusts and Investment Corporations The Act on Investment Trusts and Investment Cor - porations (ITICA) regulates investment trusts and investment corporations, both domestic and foreign, including the establishment and operation of invest - ment corporations registered as such under the ITI - CA, while the operation of domestic investment trust management companies registered as such under the FIEA are primarily regulated by the FIEA. JSDA Rules The rules of the Japan Securities Dealers Association apply to all securities dealing. In addition to these, each securities exchange also has its own rules to
regulate public companies. 5.3 Investment Funds
FDI through investment funds is also subject to regu - lations under the FEFTA. See 7. Foreign Investment/ National Security for details of the regulations under the FEFTA. When filing a pre-closing FDI notification under the FEFTA, information regarding general part -
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