The First Subcommittee of the Financial System Council an advisory board to the Japan’s Prime Minister issued a report last December that urged authorities, self regulating entities, securities companies to adopt stronger measures for substantial shareholding reporting.
Substantial shareholding reporting is a requirement under the Japanese Securities Law where investors in listed shares are required to report and disclose holdings in certain situations, for example, in case holdings exceed five percent of outstanding shares.
In response to the December recommendation, The Japanese Financial Services Agency announced on its website to continue market hearing efforts on incidents suspicious of non-reporting, which will be reported to the Japanese Securities and Exchange Surveillance Commission as appropriate.
The regulator also clarified Substantial Shareholding Reporting is within the scope of its Disclosure Hotline, open for reporting (or whistle blowing) of misconduct in regards to disclosure requirements under the Japanese Securities Law.
On the same day, the Tokyo Stock Exchange also responded by announcing this issue will be monitored through the listing approval process along with reporting (or whistle blowing) measures similar to that of the JFSA. Other stock exchanges have made collaborated announcements and a media report suggested that the Japanese Securities Dealers Association will follow suit.