A bill to amend the Act on Settlement of Funds and the Financial Instruments and Exchange Act (FIEA) has passed both the upper and lower houses of Japan’s National Diet and was enacted on May 31, 2019. The amendments enhance the regulations on ICOs (Initial Coin Offerings) by applying the securities regulations under the FIEA when an ICO is an investment program, i.e., the investors expect to receive distribution of profits from the issuer. This form of ICO is sometimes referred to as an STO (Security Token Offering), and the tokens or the rights represented on such tokens issued in an STO are called “security tokens.” STOs will be subject to disclosure requirements, and the issuers or brokers who deal with STOs will be subject to registration requirements under the amended FIEA.

In this GT Alert we explore the following:

  • Security Tokens as Collective Investment Scheme Interests
  • Disclosure Regime
    • Basic Rules
    • Private Placement
  • Distribution & Investment Management Business Registrations
    • Self-Offering by Issuers
  • Broker-Dealer or Investment-Manager Registration
    • Article 63 Exemption – Specially Permitted Business for Qualified Institutional Investors (QIIs)
  • Schedule

Click here for the full GT Alert.

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Photo of Koichiro Ohashi Koichiro Ohashi

Koichiro Ohashi is Co-Chair of the Japan Practice and focuses his practice on representing clients in a variety of financial matters, including cross-border and domestic banking, capital market transactions e.g. establishment of sponsored American Deposit Receipt programs, fund and investment management matters (private…

Koichiro Ohashi is Co-Chair of the Japan Practice and focuses his practice on representing clients in a variety of financial matters, including cross-border and domestic banking, capital market transactions e.g. establishment of sponsored American Deposit Receipt programs, fund and investment management matters (private equities, hedge funds and REITs), and corporate matters (especially in mergers and acquisitions, and restructuring transactions). He is experienced in the Japanese domestic market and represents both Japanese and international financial institutions on numerous types of financial transactions, such as syndicated loans, securitization transactions, derivative transactions, PIPE transactions, mezzanine finance transactions and equity finance transactions.

Koichiro advises various international and domestic fund managers for private equities, hedge funds, and real estate funds in the registration of funds for distribution in Japan and frequently provides advice on the structure of both domestic and offshore funds to be distributed to Japanese investors. He also advises Japanese trust banks and pension funds on their investments into foreign funds and foreign investment regulations.

Photo of Makoto Koinuma Makoto Koinuma

Makoto Koinuma focuses his practice on corporate, M&A and financial services matters. He is experienced in fund formation and management, licensing, and regulatory matters and advises a wide range of fund managers, broker dealers, financial institutions and FinTech firms (money transfer, crypto asset

Makoto Koinuma focuses his practice on corporate, M&A and financial services matters. He is experienced in fund formation and management, licensing, and regulatory matters and advises a wide range of fund managers, broker dealers, financial institutions and FinTech firms (money transfer, crypto asset exchange, online broker, cash management service, reward point program, etc.). He also represents various clients in mergers and acquisitions, joint ventures and business alliance transactions. Prior to joining the firm, he worked at a leading trading company, providing him with first-hand knowledge of business, commercial and legal perspectives of Japanese corporations.