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.