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Case Studies

Case Studies

Case Studies (Columbia Threadneedle) November 2021

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Yoshihisa Kojima Columbia Threadneedle Investments Japan Co., Ltd.
Representative Director and CEO, Head of Japan
Interviewer: Financial Services Agency (October 2021)

Yoshihisa Kojima
Columbia Threadneedle Investments Japan Co., Ltd.
Representative Director and CEO, Head of Japan

Yoshihisa Kojima joined the company in 2011 as Sales Director for Japan.
In 2021, Yoshihisa Kojima assumed management responsibilities for the Japan office as Representative Director and CEO, Head of Japan responsible for business development and client services for the region.
Previously, he was vice president, fund marketing, at Goldman Sachs Asset Management in Tokyo, Japan. In this role Mr. Kojima managed the distribution of fixed-income and quantitative products in the Japanese retail market. In addition to building this business, he supervised the company’s fund marketing team. Mr. Kojima has been a member of the financial services industry since 1998.

Company profile
Company: Columbia Threadneedle Investments Japan Co., Ltd.
Established: February 2021
Main Business: Financial Instruments Business (Investment Advisory and Agency Business)
Financial Instruments Business Operator: The Director-General of Kanto Local Finance Bureau (FIBO) No. 3281
Member Association: Japan Investment Advisers Association

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1. Introduction

Congratulations on obtaining a financial business license and starting operations in Japan. Could you give us an overview of Columbia Threadneedle’s business?

Columbia Threadneedle Investments is the global asset management group of Ameriprise Financial, Inc. (NYSE:AMP), a leading US-based financial services provider. As part of Ameriprise, we are supported by a large and well-capitalized and diversified financial services firm. Columbia Threadneedle Investments is a leading global asset manager that provides a broad range of actively managed investment strategies and solutions for individual, institutional, and corporate clients around the world.
With more than 2000 people including over 450 investment professionals based in North America, Europe, and Asia, we manage £430bn / €500bn / US$593bn¹ of assets across developed and emerging market equities, fixed income, asset allocation solutions, and alternatives.

Our Tokyo office will serve existing institutional clients and partners in Japan and develop new relationships. We see Japan as a key growth market and opening a Tokyo office signals a long-term commitment to our clients in Japan. Columbia Threadneedle Investments has a long history of managing institutional client assets in Japan, and this is an important step in helping us to better serve our partners and clients. As a leading global asset manager, we provide a broad range of actively managed investment strategies and solutions for individual, institutional, and corporate clients around the world.

We are very pleased to be opening an office in Tokyo and establishing a more permanent presence in Japan. We hope to contribute to development of investment management industry as well as development of dedicated International Financial Center Tokyo.

Source: Columbia Threadneedle Investments as at 30 June 2021
1 Source: Ameriprise Financial Q2 2021 earnings release.

Why did you decide to acquire a financial license and start an Investment Advisory and Agency business in Japan?

Columbia Threadneedle has historically focused its business on Europe and the United States, and therefore its entry into Asia Pacific has been cautious, reflecting the complexity of the market. Nevertheless, the market in Japan was particularly large and attractive, so when I first joined Columbia Threadneedle in Singapore in 2011, I developed a vision for advancing into the Japan market. However, if we were to do that, we should be confident that we would be able to leverage our strengths and have a long-term commitment. Consequently, it took about 10 years to open the Japan office.

What was the tipping point which led to more specific research in Japan?

Since 2017 when the Financial Services Agency announced the "Principles for Customer-Oriented Business Conduct", we have seen a shift from products with high returns and risks to strategies that emphasize long-term track records. I felt that this shift was considerably larger in scale than what we had seen before and we could add value to the Japanese market, since the strength of Columbia Threadneedle lies in its traditional products, which are focused on long-term investments. Columbia Threadneedle also has a growing suite of alternative offerings which we felt over time would be appropriate for the Japanese market as well. I decided to take the head of APAC to Japan and met CEOs of other asset management companies that had already expanded into Japan, to start a full-scale research project for business in Japan.

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2.Financial Start-up Support Program

Columbia Threadneedle has become the first company to be accepted into the new JFSA and Tricor Japan’s Financial Start-up Support Program. How did you feel about this program?

When we decided to start business in Japan, we had not yet hired Japanese staff, so the Singapore staff of Columbia Threadneedle were engaged in back-office preparations. While it is possible to consult with law firms regarding FIEA registration, it was difficult to proceed with administrative items such as opening bank accounts and making representative seals and bank seals without any support, due to the complexity of the procedures in addition to the language differences.

This Financial Start-up Support Program started a little later than our preparation period, so we were unable to get full support initially. However, as soon as we were accepted into this project, we were able to consult with Tricor Japan, the subcontractor of JFSA, whom we found very reliable.

Financial support such as subsidy programs are welcome, but we think a one-stop English support where we can consult about various barriers we face when entering Japan, is just as important, along with the Financial Market Entry Office starting English registrations and consultations for foreign asset managers.

*Financial Start-up Support Program (JFSA’s subcontractor: Tricor Japan)
The Japanese government is working in unison to achieve its goal of transforming Japan into an international financial center. As part of this effort, this program was implemented to provide foreign nationals and financial businesses with cost support, and one-stop English support that covers from business start-up to daily life aspects.
https://www.fsa.go.jp/internationalfinancialcenter/en/our-support/business/index.html

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Pictured, from left to right: Scott Sato (CEO Tricor Japan), Yoshihisa Kojima (Representative Director and CEO, Head of Japan Columbia Threadneedle Investments Japan Co., Ltd.), Takuma Tanaka (Deputy Director of Strategy Development Division, Financial Services Agency)

3.Acquisition of financial license

Columbia Threadneedle is the third successful registrant of a financial license using Financial Market Entry Office’s English registration. Please share your English registration experience with us.

When we decided to expand into Japan, the registration process in English did not exist, so we were preparing to register in Japanese.

In November 2020, I learned from a newspaper article that the Financial Services Agency and Local Finance Bureaus will establish "Financial Market Entry Office" in January 2021 to handle all the regulatory process, from pre-application consultation, registration, to supervision after the registration for newly entering asset management firms, acting as a single point of contact with all the communications available in English.

This sounded like good news, but as there was no precedent at that time, I was worried that the English procedure may not be smooth and thought that sticking with Japanese registration would be better. However, after consultation with the Financial Market Entry Office, my concerns were resolved, and eventually, we proceeded with the English registration.

The actual English registration process through the Office was much smoother than I expected with no disadvantages. As the number of English registration cases increase in the future, the perception that obtaining a financial license in Japan is complicated and time-consuming could change. I hope that the range of financial registration accepted in English will expand in the future.

In addition, I found the "Guidebook for Registration of Investment Management Business and Other Financial Instruments Businesses", published by JFSA in January 2021 very helpful. We were able to establish where our business model fits by referring to the flowcharts and other detailed explanations. These were prepared in both Japanese and English, making it very convenient to engage both the Japanese law firms and our Singapore office. (On the day of the interview, Mr. Kojima showed us his very own printed-out Guidebook with lots of Post-It notes which are proofs of his hard work!)

The e-mail questions from Financial Market Entry Office were written in both Japanese and English, so 1) we could understand the interpretation of the law in Japanese as a Japanese, and 2) also share the information with the Singapore office in English concurrently, and 3) provide our responses in English, which are all very helpful. If we had chosen the registration process via the Japanese language route, our Japanese staff would have to translate all the discussions from Japanese to English and share them with the Singapore office. This process of translating the complex laws and regulations in a way that the nuances would be properly conveyed would have taken an immense amount of time and effort, and ultimately delayed the entire registration process.

Have you had any issues or problems in obtaining an Investment Advisory and Agency license?

We were initially concerned if we could join Japan Investment Advisers Association (JIAA) in time before we commence business, but this was resolved as Financial Market Entry Office had advised us to consult with JIAA before completion of registration. All documents submitted in English to the Financial Market Entry Office were also accepted by JIAA, so there was no need to translate any materials.

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We have also received comments from the Japanese compliance officer and colleagues from the Singapore Office, who have all worked together with CEO Mr. Kojima.

  • With language barriers and procedures unique to Japan, we think that the establishment of the Financial Market Entry Office itself is a step in the right direction, as we are usually not as comfortable contacting the regulatory authority or sometimes encounter difficulty finding out who we should contact.
  • JFSA and Tricor’s Financial Start-up Support Program would also be helpful for foreign financial institutions entering Japan, acting as a one-stop English support, providing a wide coverage from bank account opening to visa applications.
  • Thanks to the publication of the "Guidebook for Registration of Investment Management Business and Other Financial Instruments Businesses" available in both Japanese and English; the Japanese and Singapore office were able to have a conducive discussion with the law firms.
  • The special website of JFSA International Financial Center has useful information in Japanese and English, including the Guidebook. So our suggestion for FSA is to make the page more visible to the public.