One of the challenges presented by the dematerialization of shares in Japan, which is scheduled for completion by 2009, is to find a new way of complying with the Foreign Ownership Limits (FOLs) imposed by the Japanese government on 18 “strategic” stocks. These are currently held outside the CSD (JASDEC) and settled in physical form.
It was reported in newspapers last week that one solution under consideration is to have quarterly record dates and announce FOLs at the same time, rather than the current biennial basis. Currently, FOLs are released twice a year – at the end of the fiscal year, and when interim results are announced. In the meantime, transfer agents and issuers provide estimated figures on a voluntary basis.
Mizuho Corporate Bank, which advises its foreign customers of the impact of FOLs on a weekly and a monthly basis, says “the most effective way to determine the record date is still being reviewed, mainly under the leadership of JASDEC.”