JAPAN Law and Practice Contributed by: Kunihiko Morishita, Masayuki Hashimoto and Koichi Miyamoto, Anderson Mori & Tomotsune
details of a specific investment fund is likely to be treated as solicitation of securities and must follow the requirements of the relevant private placement. In the case of a foreign investment trust/corpora - tion, an advance notification must be filed before conducting a private placement in Japan under the Investment Trusts Act (please see 2.1.2 Common Process for Setting Up Investment Funds ). 2.3.6 Rules Concerning Marketing of Alternative Funds With respect to investment trusts/corporations, the FIEA principally provides for the following three methods of private placements: • QII Placements; • Professional Investor Placements; and • private placements of small numbers of investors (“Small Number Placements”). It should be noted that any solicitation of secu - rities that does not meet the requirements for private placements will generally be treated as public offerings under the FIEA. Pursuant to a QII Placement, an issuer of an investment trust/corporation may offer its units/ shares to an unlimited number of QIIs. An inves - tor acquiring units/shares under the QII Place - ment is subject to a transfer restriction prohibit - ing any sale or transfer of units/shares to any person who is not a QII. Professional Investor Placements have been made available relatively recently with respect to units/shares of investment trusts/corpo - rations. Pursuant to a Professional Investor Placement, an issuer of such units/shares must disclose basic information regarding the units/
shares and the issuer to the offerees, and must disclose information regarding the issuer on an annual basis to the holders of the units/shares, in accordance with the JSDA rules. In a Profes - sional Investor Placement, the issuer may offer its units/shares to an unlimited number of Pro - fessional Investors. An investor acquiring units/ shares under the Professional Investor Place - ment is subject to a transfer restriction prohibit - ing any sale or transfer of units/shares to any person other than a Professional Investor. Pursuant to a Small Number Placement, an issu - er may offer its units/shares to fewer than 50 offerees. This limitation is based on the number of offerees but not acquirers, and the number of QIIs can be excluded in calculating the number of offerees if they are subject to the requirements specified for a QII Placement (including trans - fer restriction). In addition, if units/shares of the same kind as the units/shares to be offered were issued during the three-month period preceding the scheduled issue date of the relevant private placement, the number of offerees of such pre - ceding issue will be aggregated in calculating the number of offerees, which must be fewer than 50. An investor acquiring units of an investment trust under a Small Number Placement is subject to a transfer restriction prohibiting any sale or trans - fer of units, unless it transfers all of its units as a whole, or unless certificates of units are unable to be divided. No transfer restriction is imposed on shares of an investment corporation issued pursuant to a Small Number Placement. A foreign investment trust/corporation follows the same requirements as stated above (in case of a Professional Investor Placement, it must meet certain requirements provided by the JSDA rules applicable to a publicly offered foreign
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