The Nikkei Shinbun newspaper reported that the Financial Services Agency (FSA) has decided to conduct a field survey on hedge funds established in Japan from this autumn.
According to the newspaper, a larger number of small-to-medium sized hedge funds are being set up and investments from regional financial institutions are increasing. FSA sees such hedge funds as a potential factor to disturb the domestic financial markets and will require annual reporting on asset balance to properly grasp the trends in market size.
Also in case false representations or inappropriate marketing is suspected, FSA will take necessary supervisory measures towards such funds as by launching an on-sight investigation.
After the complete implementation of the Financial Instruments Law which is scheduled this September, hedge finds attracting investment from individuals will need to be registered with the FSA. However, in case professional investors are targeted, such funds are only required to submit a report to the FSA and are outside the scope of orders or other penal action.