Country Manual Independent Portfolio Manager/Advisor (EAM)
Japan Update 2024
BRP has updated its Country Manual Independent Portfolio Manager/Advisor (EAM) for Japan out of company’s country of establishment (Def, RS & BT).
| SOURCE OF CHANGES | ANSWERS |
| Law/Regulation | No |
| New Position of the Authorities | No |
| Evolution of Expert’s interpretation | Yes |
Regulatory Summary and Behaviour Template
Material changes
This Country Manual has been reviewed to ensure that the content of all the documents remains accurate and up-to-date. We can confirm that the regulatory framework for a foreign, unlicensed company’s investment services directed towards or performed in Japan remains restrictive. There have not been any major changes since the last update of this manual.
Despite that, we have reviewed and adapted the documents based on an evolving interpretation of the regulatory framework following consultations with our local counsel and the following material information has been added for completeness of the regulatory framework.
Regarding the Foreign Securities Firm Exemption that allows for the provision of brokerage services for securities to Japanese residents from outside of Japan, the bank acting in reliance of this exemption from registration requirements may:
Provide unsolicited brokerage services for securities to Japanese residents from outside of Japan, irrespective of the category/type of client by receiving orders not only through agency or intermediary services of a registered Financial Instruments Business Operator (Type 1) who is authorized to engage in “securities related business” in Japan but also directly from the Japanese client. Other situations involving placing of orders by other locally licensed parties need to be analysed on a case-by-case basis.
Provide custody/depository services for money, securities or certificates to a Japanese client without triggering a licensing requirement in Japan when such custody/depositary services are inevitably associated to the provision of brokerage services (i.e., trading of securities) under this exemption (“Custodian/Depositary Services associated to brokerage services provided under the Foreign Securities Firm Exemption”).
Regarding introduction of a foreign custodian bank’s custodian services, information has been added regarding ‘pure custody/depository services of securities’ (i.e. not associated to other banking and/or investment service for which a banking license or a FIEA license is needed; e.g. where the foreign bank/company will not be providing brokerage services) and including receiving principal and interest of such securities (“Pure Custody Services”), are not a regulated activity in Japan and may therefore be offered and provided by a foreign bank/company to Japanese clients without triggering licensing requirements in Japan. A careful analysis of the services to be offered is however needed to ensure that the offering/provision of Pure Custody Services will not derive in the triggering of banking and/or other investments licensing rules.
Non-material changes
Non-material changes have been made throughout the document, some comments have been reworded and additional references to applicable law/regulation have been added.
The comment “In reliance of an available exemption” has been added to brokerage services related activities in the BT to better reflect that this service may be provided pursuant to the Foreign Securities Firm Exemption (as was already the case in the previous version of the manual).
BT Short Comparison
BRP has created a comparison document allowing users to quickly identify the modifications made compared to the previous version of the EAM Manual (BT Short Comparison). The BT Short Comparison can be found on BRP’s platform (mybrponline) in the Search tab by entering in the Document Field “CM EAM BT SHORT COMP” and “JAPAN” in the Target Country Field.
The BT Short Comparison should be read as follows:
The first column contains a short description of the activity in question. The second column contains the answers of the previous version of the Country Manual (online until the day of the alert). The third column contains the new answers of the most recent version of the Country Manual. Only the modified answers are displayed (in color). If the answers in the new version are unchanged compared to the previous version, they are shaded in grey.
For more information, please contact us: info@brpsa.com
Best regards,
Geneva, September 26th, 2024