JAPAN Law and Practice Contributed by: Kunihiko Morishita, Masayuki Hashimoto and Koichi Miyamoto, Anderson Mori & Tomotsune
3. Retail Funds 3.1 Fund Formation 3.1.1 Fund Structures
days after the filing, and thereafter an issuer can accept subscription orders placed by investors. However, for an investment fund that is offered on a continuous basis, the SRS becomes effec - tive on the day following the filing, on the condi - tion that one year has elapsed since the previous SRS was filed. Accordingly, an investment fund can continue its public offering by filing a new SRS annually. The SRS requires full disclosure of publicly offered investment funds, enabling investors to make reasonable investment decisions. For example, the SRS with respect to an investment trust must contain the following information: • the terms and conditions of the public offer - ing; • the investment objective, fund structure, types of assets, management system, dividend policy, investment restrictions, risk factors, charges and costs, taxation, perfor - mance results, procedures of subscription and redemption, valuation of assets, term, and description of an investment trust man - ager, a trustee and related parties; and • audited financial statements of an investment trust as well as an investment trust manager. The SRS is filed through an electronic filing sys - tem called the Electronic Disclosure for Inves - tors’ NETwork (EDINET), and is made available for public inspection online. If there is a change to material facts that must be stated on the SRS after it has been filed (includ - ing cases where new financial statements are prepared and an important lawsuit has been resolved), or if an issuer recognises there is an item on the SRS that needs amending, an amendment to the SRS must be filed.
Traditionally, most publicly offered investment funds in Japan are securities investment trusts, while investment corporations are predominantly used as J-REITs. Many foreign investment trusts are also publicly offered in Japan, while foreign investment corporations such as SICAVs domi - ciled in Luxembourg are sometimes used. Collective investment schemes are seldom pub - licly offered in Japan. 3.1.2 Common Process for Setting Up Investment Funds The statutory establishment processes for pub - licly offered investment funds are the same as those for privately placed investment funds; please see 2.1.2 Common Process for Setting Up Investment Funds . However, due to the rules of the ITAJ and the JSDA applicable to invest - ment trusts/corporations and foreign investment trusts/corporations, respectively, publicly offered investment funds have to satisfy the detailed requirements provided for by them; please see 3.3.1 Regulatory Regime . 3.1.3 Limited Liability In addition to the general disclosure require - ments applicable to investment funds (please see 2.1.4 Disclosure Requirements ), an issuer of an investment fund who intends to conduct a public offering in Japan must file a securities registration statement in the form prescribed based on the types of securities enumerated by the FIEA prior to conducting solicitation in Japan. The SRS generally becomes effective 15 Please see 2.1.3 Limited Liability . 3.1.4 Disclosure Requirements
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