Laws, regulations, and Q&As with regard to the ”act of material proposal” and ”joint holders” under the Large Shareholding Reporting Rule
- to promote constructive dialogue between institutional investors and investee companies - 

The Financial Services Agency published ”Laws, regulations, and Q&As with regard to the ”act of material proposal” and “joint holders” under the Large Shareholding Reporting Rule - to promote constructive dialogue between institutional investors and investee companies -. ”

”Principles for Responsible Institutional Investors 《Japan’s Stewardship Code》 (hereafter ”the Code”)” were published in February 2014. Since then, the Code was revised twice in May 2017 and March 2020, and the third revision was published in June 2025. 

The Code requests institutional investors to conduct constructive dialogue with investee companies to foster sustainable growth in investee companies and enhance the medium- to long-term investment return for clients and beneficiaries. It is expected that each institutional investors will be encouraged to self-motivated changes in their mindsets, and constructive dialogue between companies and investors will become deeper and more effective.

In light of environmental changes such as the increase in passive investment, the growing significance of constructive dialogue between institutional investors and investee companies, and the expansion of collaborative engagement, the scope of ”act of material proposal” was clarified to enable institutional investors to have in-depth dialogues. The scope of “joint holders” was also clarified to promote collaborative engagement that contributes to the improvement of corporate value in the medium- to long- term, through the amendment of the Financial Instruments and Exchange Act in 2024 and the subsequent amendment of related Cabinet orders and the Q&As. 

In order to facilitate smooth dialogue between institutional investors and investee companies, this document summarizes the following issues described in the laws and Q&As.

1. Relationship between ”act of material proposal” in the Large Shareholding Reporting Rule and dialogue with Investee companies
2. Relationship between ”joint holders” in the Large Shareholding Reporting Rule and collaborative engagement

This document is based on the amendment of the Financial Instruments and Exchange Act in 2024 and the subsequent amendment of related Cabinet Orders and Cabinet Office Orders pertaining to the amendment and the Q&As, which will be implemented and applied from Friday, May 1, 2026.

This document was originally prepared in Japanese and has been translated for reference purpose only.

(Appendix)

Laws, regulations, and Q&As with regard to the “act of material proposal” and “joint holders” under the Large Shareholding Reporting Rule - to promote constructive dialogue between institutional investors and investee companies - 

Contact

Corporate Accounting and Disclosure Division, Policy and Markets Bureau, Financial Services Agency

Tel +81-(0)3-3506-6000 (Ex. 3836, 3624)