The Japanese regulator, the Financial Services Agency (FSA), may require shareholders in real estate investment trusts (REITs) to disclose holdings of 5% and above as early as 2007.
The move is part of an attempt to make REITs more transparent, and less exposed to hostile takeovers. At present, REITs are not covered by disclosure regulations.
There are more than 30 REITs listed in Tokyo, with combined assets of slightly above Yen 2.3 trillion yen. With the real estate market picking up in Japan, there are fears that REITs will become the targets of hostile takeovers.
In addition, there is currently a special reporting rule in Japan that applies exclusively to professional investors, requiring them to file quarterly reports if their holdings in a company exceed 10%.
The new proposal would also shorten the reporting period to twice-weekly.
Currently legislation is making its way through the Diet (Japanese Congress) and is expected to pass later this year as part of other sweeping changes in the Financial Products Trading Law, according to a spokesman for Mizuho Corporate Bank in Tokyo.