Introduction
On January 29, 2016, the amendments to the new regulations in relation to certain partnership-type funds in Japan, known as Special Exempted Business for Qualified Institutional Investors, etc. (SEB or Tekikaku Kikan Toushika Tou Tokurei Gyoumu) were approved at a cabinet meeting of the Japanese government.
The new rule for the SEB will be stringent. The amendments include transitional measures, under which entities utilizing the SEB before the effective date of the amendments will be required to submit certain documents and comply with certain disclosure and reporting obligations. The amendments will come into effect on March 1, 2016.
New Rule
Under the amendments, certain obligations and business conduct restrictions (such as the suitability doctrine) applicable to a registered financial instruments exchange business operator will also be applicable to entities under the SEB. Target investors will be limited to certain sophisticated investors. However, certain obligations and business conduct restrictions will not be applicable to activities in relation to professional investors (tokutei toushika), including qualified institutional investors.