JAPAN Law and Practice Contributed by: Kunihiko Morishita, Masayuki Hashimoto and Koichi Miyamoto, Anderson Mori & Tomotsune
An investment trust manager must provide a document detailing the trust agreement to inves - tors seeking a subscription of units of an invest - ment trust, except where the units are offered by way of a private placement for qualified institu - tional investors only (“QII Placement” – please see 2.3.6 Rules Concerning Marketing of Alter- native Funds ). An investment trust manager of an investment trust must prepare and deliver a management report containing performance results, market conditions and its financial statements for the relevant fiscal year to known unitholders, and must also send this report to the regulator after the end of the fiscal year without delay, unless the units of the investment trust are offered by way of a QII Placement and the terms and condi - tions of the trust agreement provide that a man - agement report will not be delivered. A management report is comprised of two types of reports: • a summary management report, which con - tains material information; and • a full management report. In addition, the ITAJ provides detailed rules on matters to be included in a management report, and the forms necessary for drafting one. A full management report may be delivered to known unitholders through electronic means, includ - ing by posting the report on an issuer’s website, as long as the terms and conditions of the trust agreement so allow. An investment corporation must notify investors seeking a subscription of shares of the basic terms of a certificate of incorporation, such as its investment objective and its dividend policy, as well as its subscription requirements.
An investment corporation must prepare finan - cial statements, an asset investment report and a statement on the distribution of funds for each fiscal period, and must send them to the share - holders once approved by a board of directors. An asset investment report must include material issues on: • the situation of the investment corporation and other matters relating to the current situ - ation; • the directors; and • its shares. A foreign investment trust must deliver a docu - ment containing a constitutional document, such as the trust deed of a unit trust or a man - agement regulation for a fonds commun de placement (FCP), to a prospective investor, and must prepare a management report and deliver it to known unitholders. A foreign investment corporation is not required to prepare an asset investment report. With respect to a collective investment scheme, there is no general obligation of disclosure to a prospective investor, but a prospective investor is normally provided with a partnership agree - ment to review before executing it. Ongoing disclosure obligations applicable to a collective investment scheme depend on the relevant governing law. For example, a gen - eral partner of an investment limited partner - ship formed pursuant to the LPAI must prepare a balance sheet, profit and loss statement and business report, and must maintain these at its principal office; a limited partner may inspect or request their own copies at any time during nor - mal business hours.
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