Simplification of Entry Procedures | Starting an Asset Management Business

Opening an Asset Management Business

Procedures can now be carried out in English

In January 2021, the Japanese Financial Services Agency and the Finance Bureau jointly opened the Financial Market Entry Office as a centralized consultation center for overseas financial companies considering establishment in Japan. This makes it possible to handle everything from financial licensing consultation to registration procedures and, ultimately, ongoing operations, all in English and without any obstacles. We also provide advance consultation from overseas using video conferencing.

(Inquiries)

Business Hours: Weekdays 9:30 am-6:15 pm (JST)
E-mail: marketentry@fsa.go.jp
Phone: +81-3-6667-0551 (direct line)
Address: 7th Floor, FinGATE TERRACE,
8-1 Nihonbashi-kabuto-cho, Chuo-ku, Tokyo

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Current Status
Foreign asset management companies must have discussions with different contact points by the JFSA and Local Finance Bureaus High regulatory compliance cost due to the requirement to file application/registration in Japanese

Solution
"Financial Market Entry Office" was launched by the JFSA in January 2021 →One-stop English support services for pre-application consultation, registration procedures, and ongoing operations

Market entry procedures have been greatly simplified

Normally, the investment management business requires various registration, and the approval process for these registrations takes a considerable amount of time. However, we took steps to simplify market entry procedures. For example, by adopting a simplified registration system for asset managers of funds mainly targeting overseas professional investors and for asset managers with a business track record overseas or those licensed by overseas authorities.

About the actual registration procedures

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Current status
In principle, even an asset management firm that serves overseas professional investors (institutional investors) is required to be registered with JFSA in order to conduct asset management business in Japan. Moreover, registration procedures could take some time even for an asset management firm with a proven track record overseas

Solution
Facilitate overseas asset managers’ entry by introducing the following programs: Pre-registration entry program（5years） for those with authorization by regulatory bodies and a proven track record in specified foreign countries Simplified entry program for GP managers with overseas qualified clients *2021 November 22nd

New Exception for Investment Management Business in Japan [Summary]

		1. Specially permitted investment management business for Offshore Professional Investors, etc. (Article 63-8 to 63-15 of the revised Financial Instruments and Exchange Act)	2. Specially permitted investment management business during Transition Period (Article 3-3 of supplementary provisions of the revised Financial Instruments and Exchange Act)
Matters required to be entered		Notification to competent authority in Japan (not required to register) [Grounds for disqualification] Lack of adequate human resources or systems, existence of any officers or employees who are not fit and proper, not having physical facilities located in Japan, etc.
Matters required to be entered		The amount under management subscribed to by non-residents must exceed 50% of the total amount under management.	Having the approval, license or registration of overseas authorities (limited to the authorities located in Australia, France, Germany, Hong Kong, Singapore, Switzerland, UK and US) relating to fund management business, and a track record (not less than 3 years) in asset management business.
Scope of Business		Investment management business (Limited to operation of collective investment schemes)	Investment management business currently conducted overseas under the approval, license or registration of overseas authorities ((a) operation of offshore collective investment schemes, (b) operation of foreign investment trust funds, and (c) investment management based on discretionary investment contracts)
	Scope of Investors	Foreign corporations Individuals residing in a foreign country who fall under (1) or (2) below; (1) Neither net assets nor financial assets are less than 300 million Yen　and securities transactions experience is not less than 1 year, or (2) Being an investor equivalent to Professional investor as defined in Article 2 (31) of the FIEA under the laws of a foreign country (the country where the notifying person’s office or the relevant individual is located) Welfare pension funds and corporate pension funds under foreign laws (mainly for the purpose of managing retirement pension) Professional investors as defined in Article 2 (31) of the FIEA (including the investors in Japan) Persons in a close relationship with the notifying person	Foreign corporations Individuals residing in a foreign country Investment managers and trust banks registered under the FIEA Persons in a close relationship with the notifying person
	Investment property	No limit	Investment in any securities to which the voting right of any company incorporated in Japan pertains must not exceed 50% of assets under management by the notifying person.
	Amount	No limit of total amount under management
	Duration	No limit	Up to 5 years from the date of notification has been filed (Notification under this new regime shall be filed only within 5 years from the effective date of the revised FIEA)
Solicitation for acquisition of fund-shares		The notifying person is also able to solicit for fund-share acquisition that they conduct as an investment management business under this new regime, without registration.