Japan Liberalises Foreign Involvement In Bond Private Placement Market

The consultation period for potential changes in legislation enabling non resident institutional investors in Japan to has closed, and change is now imminent. The Financial Services Agency (FSA) in Tokyo hopes revision to the requirements for $B F (Bqualified institutional

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The consultation period for potential changes in legislation enabling non-resident institutional investors in Japan to has closed, and change is now imminent. The Financial Services Agency (FSA) in Tokyo hopes revision to the requirements for $B!F (Bqualified institutional investors $B!G (B(QIIs) will increase foreign activity in the privately-placed bond market. Changes will be effective from 1 July.

“We consider the revision will be favourable to our clients, as non-resident institutional investors will be able to purchase privately-placed securities, including privately-placed corporate bonds issued to less than 50 investors and asset-backed securities issued by special purpose companies,” says a Bank of Tokyo Mitsubishi (BTM)spokesman.

“Qualified institutional investors $B!G (B are beneficial owners. The FSA requires non-resident QIIs to appoint a domestic agent to conduct all activity from FSA filing to the purchase and transfer of securities. BTM has confirmed with FSA that it can serve as their $B!F (Bagent $B!G (B in a multi-tier custody structure with global custodians as intermediaries.

Businesses eligible for QII status must have minimum capital of 100 million, as must fund managers and investment advisors. Banks need 2 billion and insurers Yen 1 billion. Non-Japanese governments, governmental organizations, municipal governments and public organizations, central banks, and international organizations in which Japan has membership can qualify for QII status by completing a filing with the FSA. And non-Japanese corporations with portfolios in Japan valued at over Yen 10 billion, and which report regularly to the FSA, also have merely to complete a filing with the FSA.

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