JAPAN Law and Practice Contributed by: Hiroaki Takahashi, Kaoru Sato, Kenji Miyagawa and Koji Kawamura, Anderson Mori & Tomotsune
and injunctive relief are, in principle, unavailable for such a default. 3.7 Principal Indemnities Damages constitute the principal indemnity in securitisation transactions, because specific performance and injunctive relief are, in princi - ple, unavailable in such transactions. 3.8 Bonds/Notes/Securities The standard set of documents involved in an issuance of bonds include (i) a bond purchase agreement containing the terms and conditions of the bonds and (ii) a fiscal agency agreement. 3.9 Derivatives Interest swap derivatives are typically used to hedge risks associated with interest rate fluc - tuations in situations where the instruments invested in adopt fixed rates while the underlying assets are based on floating rates. On the other hand, currency swap derivatives are typically to hedge foreign exchange risks where there is mismatch in the currency between underlying assets and the instruments invested in. 3.10 Offering Memoranda Certain forms of offering memoranda are required be delivered to investors under the FIEA for public offerings of bonds. Private offerings – ie, solicitation for purchase of bonds vis-à-vis 49 or less investors or qualified institutional investors, are exempted from the requirement to deliver offering memoranda under the FIEA. Neverthe - less, it is a customary practice for certain disclo - sure documents similar to the statutory offering memoranda to be delivered to investors in pri - vate placements, too. Furthermore, the Japan Securities Dealers Association has promulgated certain voluntary “Rules Concerning Marketing Securitization Products”. Under these rules, delivery of documents of certain formats setting
out specific disclosure items (depending on the type of assets be delivered to investors) is rec - ommended even in private placements.
4. Laws and Regulations Specifically Relating to Securitisation 4.1 Specific Disclosure Laws or Regulations
The Financial Instruments Exchange Act of Japan (FIEA) provides disclosure requirements and procedures. Article 5.1 of the FIEA provides disclosure rules applicable to “regulated securi - ties”, including securitisation products. Examples of regulated securities in respect of securitisation products include the following. • TMK bonds and preferred shares issued by TMKs under a TMK structure are considered “type I financial instruments”, and solicitation, sale and purchase and brokerage activi - ties in respect of TMK bonds and preferred shares accordingly have to be handled by type I financial instrument exchange business operators licensed under the FIEA. • TBIs issued under a trust structure and TK interest issued under a GK-TK structure are considered “type II financial instruments”, and solicitation, sale and purchase and brokerage activities in respect of TBIs and TK inter - est accordingly have to be handled by type II financial instrument exchange business operators licensed under the FIEA. For a public offering, forms are provided in the Appendices to the Cabinet Office Ordinance on Disclosure of Corporate Affairs, etc, which is an ordinance related to the FIEA.
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