Clifford Chance

New schemes to facilitate the entry of overseas investment managers into Japan

14 June 2021

To make Japan an international financial hub, the Japanese government has established a new system to attract overseas investment managers by reducing some of the barriers to entering the Japan market.

STREAMLINING OVERSEAS ASSET MANAGERS' ENTRY INTO THE JAPANESE MARKET

An amendment to the Financial Instruments and Exchange Act (FIEA) (Amendment to the FIEA) was enacted on 19 May 2021 to facilitate the entry of overseas investment managers (OIMs) into Japan's financial market. The Amendment to the FIEA was made based on the Japanese Financial Services Agency's (Japan FSA) "First Report － Regulatory Policy: Toward an International Financial Hub" published by the Working Group on Capital Market Regulations of the Financial System Council on 23 December 2020, with the aim of, among others, expanding and deepening the Japanese market by welcoming OIMs to Japan. See our previous Alerter, including a link to an English summary of the report.

Under the Amendment to the FIEA, two new schemes have been established to allow the following two types of OIMs to conduct business in Japan:

• investment managers operating under the supervision of overseas regulatory authorities and having a proven track record; and

• general partners (GPs) of limited partnerships with overseas qualified investors.

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