Press Conference by Kaoru Yosano, Minister of State for Economic and Fiscal Policy and Financial Services

(Excerpt)

May 16, 2006

Q.

According to some press reports, investors whose holdings of investment securities issued by real estate investment trusts (REITs) accounting for more than 5% of all the securities issued will be obliged by the Financial Services Agency (FSA) to submit a substantial holding report under the enforcement regulations of the Financial Instruments and Exchange Law currently under deliberation in the Diet. Please confirm the facts.

A.

While I am not sure of the technical details, it is not an enforcement regulation but a government ordinance, to be precise.

Q.

Murakami Fund has submitted a notice of closing its investment advisory business in Japan to relocate to Singapore. At a time like this when there are various repercussions, their move seems to be elusive of the FSA. What is your view on such a move to relocate overseas by a Japanese business that appears to be elusive of the FSA?

A.

If they relocate to Singapore, the laws of Singapore will be applied, and Singapore is no heaven as its laws are rather strict. Furthermore, if Mr. Murakami and his group engage in various investment activities in Japan, they will be subject to Japanese laws and regulations as a matter of course. As for the tax law, taxes will be imposed according to the tax treaty between Singapore and Japan.

Therefore, regardless of whether Mr. Murakami is based in Japan or relocates his base to Singapore, his activities in Japan will be subject to all laws and regulations of Japan in this situation.

(End)