The Financial Services Agency (FSA) will introduce new charges that will apply to investors that fail to submit reports on large shareholdings or include false information in such reports.
The charges will come into effect on the same day as the Revised Financial Instruments and Exchange Law 2008, which is scheduled to be implemented next month. Under Japanese law, investors are required to file a report if they acquire a stake in an issuer that exceeds 5% of the issuer’s total outstanding shares. In addition, they are required to file further reports if there is a change in this stake by 1% or more.
The new charges will be set at 1/100,000 of the total market value of the shares issued by the issuer of the stocks that are subject to the large shareholdings report, and they will be applied in the following cases:
– In the case that a large shareholdings report or a report making alterations to an existing large shareholdings report is not submitted by the deadline. However, in this case, under a charge reduction system, if this is reported to the Securities and Exchange Surveillance Commission before the Authority begins its examination or gives an order to submit the reports or documents, the charge will be halved. Details of how to report this will be announced later.
– In the case that there is false information on an important matter, or if the following are submitted but are lacking important information: (1) Large shareholdings report (2) Report making alterations to an existing large shareholdings report (3) Any amendments to either of the former.
A system will also be introduced whereby the charges paid by repeat offenders are increased.
D.C.