JAPAN Law and Practice Contributed by: Tomoyuki Tanaka and Henry Tan, Anderson Mori & Tomotsune
stated statutory period for the duration of the preliminary consultation and review.
• ability to generate income and pay for its own and its subsidiaries’ operating expenditure; • capital adequacy; • sufficiency of knowledge and experience on the part of relevant personnel who engage in banking business; and • sufficient social credibility. A “bank holding company” is subject to strict regulations compared to those applicable to a major bank shareholder. Under the Banking Act, the regulations applicable to a “bank holding company” include: • restrictions on the permitted scope of busi - ness of a “bank holding company” and its subsidiaries; • governance requirements; • capital adequacy requirements; and • disclosure requirements. Any person wishing to be a “principal share - holder” must obtain prior approval from the FSA. Additionally, the following criteria must also be satisfied. • In light of matters concerning funds for the acquisition of shares, the purpose of hold - ing shares in the local bank, or other matters concerning the holding of shares, will pose no risk of impairment to the sound and appropri - ate management of the business of the local bank. • In light of the property, income and expendi - ture of the person and their subsidiaries, there is no risk of impairment to the sound and appropriate management of the business of the local bank. • The person must have sufficient understand - ing of the public nature of the local bank’s business and must also have sufficient social credibility.
3. Changes in Control 3.1 Requirements for Acquiring or Increasing Control Over a Bank Shareholders of local banks may be subject to regulation pursuant to the Banking Act if they qualify as “principal shareholders” or “bank holding companies”. A “principal shareholder” is defined in the Bank - ing Act as a shareholder who has obtained approval from the regulator to acquire and hold 20% (or, if certain conditions apply, 15%) or more of the voting rights of a local bank. A “bank holding company” is defined in the Banking Act as a company that has obtained approval from the regulator for: • acquiring and holding shares in its Japanese subsidiaries for a price exceeding 50% of the total assets of the company itself; and • that holds more than 50% of the voting rights in a local bank. A shareholder that constitutes a “bank holding company” will be subject to regulations applicable to a “bank holding company” rather than a “principal share - holder”. Any legal entity that wishes to become a “bank holding company” must obtain the prior approval of the FSA. Approval as a “bank holding compa - ny” is granted at the sole discretion of the FSA. In principle, the criteria required to be met to obtain approval as a “bank holding company” include the:
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