JAPAN Law and Practice Contributed by: Hiroaki Takahashi, Kaoru Sato, Kenji Miyagawa and Koji Kawamura, Anderson Mori & Tomotsune
• type II financial instruments business opera - tors ( dai-nishu-kinyu-shohin-torihiki-gyosya ) that deal in type II financial instruments, such as trust beneficiary interests, standard or pre - ferred equities in GKs and TK equities in a TK under a GK-TK investment structure. Underwriters are typically securities companies, whereas placement agents can be securities companies, banks, trust banks and asset sale or management companies registered as type II financial instruments business operators. 2.5 Servicers In transactions involving the securitisation of monetary claims, the originator would usually act as the servicer after the assets have been trans - ferred to the relevant SPE because the originator is expected to service the assets more efficiently based on its existing business relationship with the obligors. Additionally, since the transfer of monetary claims is frequently made without any notice to obligors, the originator would need to continue servicing the assets as if they were the asset-owner. However, if there is any default in respect of the monetary claims, or if the monetary claims are not collectible through ordinary means (for instance, in situations of dispute or litigation with an obligor), the servicer’s involvement in the servicing of the monetary claim will give rise to legal concerns as to whether such involve - ment is deemed an activity that falls within the “legal business” that can be undertaken only by qualified attorneys under the Attorney Act. In such events, a third-party claim-collection company licensed to conduct claim-collection business as a “special servicer” under the Act on Special Measures Concerning Claim Manage - ment and Collection Businesses would usually be engaged, or the transferee SPEs would be
engaged in the servicing of such monetary claim by themselves. Furthermore, if an originator servicer becomes insolvent or unable to continue to provide collec - tion services, the servicing role will be transferred to another third-party servicer as a “back-up ser - vicer”. As part of the typical process of structur - ing a securitisation transaction, the questions of whether to appoint a back-up servicer from the outset and, if so, which party to be appointed as such will be discussed between the relevant sponsor arranger and a credit rating agency. 2.6 Investors The role of an investor is to provide funds to the originator through SPEs. Investors are split into two categories for purposes of disclosure under the FIEA:
• qualified institutional investors; and • non-qualified institutional investors.
Additionally, investors are split into two catego - ries for purposes of the regulation of product sales activities of brokers/dealers or placement agents: • “specified investors” ( tokutei-toshika ), which includes QIIs and quasi-institutional investors (as defined in the FIEA); and There is no legal concept under Japanese law of bond or note trustees who act as trustees for bond or noteholders. With that said, the Compa - nies Act requires bond issuers to appoint bond administrators, which will be entrusted with the performance of certain functions, such as receipt of payments and preservation of rights of claim, on behalf of bondholders unless (i) the • non-specified investors. 2.7 Bond/Note Trustees
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