JAPAN Law and Practice Contributed by: Raku Raku, Gen Takahashi, Yoshihiro Morisato and Taku Matsumoto, Anderson Mōri & Tomotsune
ners (and parent companies) of the funds may also need to be disclosed. The rules and regulations applicable to the market - ing and sale of interests/shares in foreign investment funds are categorised into two major parts. The rules and regulations applicable to foreign investment trusts/foreign investment corporations are entirely different from those applicable to interests in foreign collective investment schemes. Therefore, the specific requirements to be met for private placement of the funds vary depending on the legal characteristics of each fund. If the fund is regarded as either a foreign investment trust or foreign investment corporation, under the cur - rent regulatory environment and practice applicable to fund-type securities, there are two private place - ment exemptions for newly issued interests in the fund (namely, the “small number offerees exemption” and the “qualified institutional investors exemption”). If the fund is regarded as a foreign collective invest - ment scheme, a private placement for newly issued interests in the fund would be available if the number of investors is 499 or fewer (note that the threshold number is counted based on the number of subscrib - ers, not the number of offerees). In practice, however, the number and category of Japanese investors would need to be limited in order to enjoy exemptions from the registration requirements imposed on the general partner of the fund. 6. Antitrust/Competition 6.1 Applicable Regulator and Process Overview Japan has a merger control regime. Certain types of FDI involving a “business combination” – such as the acquisition of shares, amalgamations, joint share transfers, and acquisition of businesses – would trig - ger a requirement to file a prior notification to the Jap - anese Fair Trade Commission (JFTC). For example, in the case of an acquisition of shares, a prior notification would be required if:
• the total domestic sales of the acquiring compa - ny’s side exceed JPY20 billion; • the total amount of domestic sales of the acquired company and all of its subsidiaries exceeds JPY5 billion; and • the ratio of voting rights of the acquiring company after the acquisition newly exceeds 20% or 50%. The requirement to file a prior notification applies regardless of whether the company is a domestic company or a foreign company. If a business combination is subject to the prior noti - fication requirement, it is prohibited, in principle, for the companies to close the transaction for a period of 30 days after filing the prior notification unless the JFTC shortens this period at its discretion. The JFTC may request reports, information and materials from the parties during the period and, if it is considered necessary, this waiting period may extend up to 120 days from the filing of prior notification. 6.2 Criteria for Antitrust/Competition Review A business combination that would result in the sub - stantial restraint of competition in any field of trade is forbidden under the Antimonopoly Act. This regulation is applied regardless of whether such a business com - bination triggers the prior notification requirements mentioned in 6.1 Applicable Regulator and Process Overview . As to the criteria for review, the JFTC publishes “Guidelines to Application of the Antimonopoly Act Concerning Review of Business Combination” (the “Business Combination Guidelines”). The Business Combination Guidelines give safe harbour in deciding whether a horizontal business combination substan - tially restrains competition. If the parties involved fall under any of the following situations after the imple - mentation of the proposed business combination, the horizontal business combination is not considered to be a restraint on competition: • the Herfindahl-Hirshman Index (HHI), which is the sum of the square value of the market share for each enterprise in the particular field of trade, after the business combination is 1,500 or less;
345 CHAMBERS.COM
Powered by FlippingBook