23 July 2020 - Events
Amendments to the Foreign Exchange and Foreign Trade Act of Japan (the ‘FEFTA’) came into effect on May 8, 2020, and is currently subject to a thirty days transition period with the aim of the FEFTA becoming fully effective on June 7, 2020.
The aim of the amendments to the FEFTA (the ‘Amendments’) is for the Japanese government to provide guidelines for foreign investors that are investing into Japanese companies which may pose a risk to the national security of Japan, whilst also ensuring that foreign investors are not unduly restricted with respect to their investments into Japan.
Please click here of the Amendments to Foreign Exchange and Foreign Trade Act of Japan.pdf to read more details on the overview of the application of the Amendments to foreign fund managers who are trading listed securities and the circumstances which may require a foreign fund manager to submit a ‘prior notification of stock purchase’ to the Bank of Japan in relation to its contemplated investment into Japanese companies (‘Prior Notification’).
To get a better understanding as to whether a foreign entity may be subject to the reporting rules under the Amendments with respect to Prior Notifications, as well as which exemptions may be available, please refer to the diagram flowchart for your reference when reading the Client Alert.