Japanese FSA has confirmed FIAMI (Foreign Indirect Account Management Institution) will not be mandatory for foreign investors in case of settlement of corporate bonds at JASDEC, starting January 2006.
Mizuho and JASDEC recently asked FSA if FIAMI will be required, and the regulatory body deferred the confirmation of its decision to the Ministry of Justice.
At the meeting, FSA officials said “It is not related to the matter of taxation, but the matter of interpreting Book-Entry Law. Legally, FIAMI system is not mandatory for foreign investors.”
Mizuho, as a chairman of the Bankers Association is now lobbying tax-exemption for corporate bonds held by foreign investors as one of the tax revision 2006. If the tax exemption will be applied to foreign investors like JGB under Special Taxation Measures Law, the FIAMI system will likely be introduced by the Tax Authority.