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English Disclosure Support Program (Disclosure G)

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To engage in activities falling under “Financial Instruments Business” as defined by the Financial Instruments and Exchange Act, registration as a Financial Instruments Business operator or notification for Qualified Institutional Investor Exempt Business is required. While broadly termed “Financial Instruments Business,” it is further divided into the following four categories. Here, we explain which activities require registration for each of these four categories.

Explanation of Types and Content of Financial Instruments Business

To engage in activities falling under the “financial instruments business” defined by the Financial Instruments and Exchange Act, you must either obtain registration as a financial instruments business operator or file a notification for the Qualified Institutional Investor Exception Business. While referred to simply as “financial instruments business,” its scope is further divided into the following four categories. Here, we explain which activities require registration for each of these four categories of financial instruments business.

• 1. Content of Type I Financial Instruments Business

  Type I Financial Instruments Business encompasses activities such as the “purchase, sale, and solicitation of securities” (e.g., highly liquid stocks and bonds), “underwriting,” and the custody and management of securities. Securities companies are the prime example. As of March 31, 2024, there are 299 registered firms. *The total number of registered financial instruments business operators is 1,945. Since a single company may be registered in multiple categories, this total does not match the sum of the registration counts for subsequent categories.

• 2. Scope of Type II Financial Instruments Business

  Type II Financial Instruments Business involves the sale and solicitation of securities with lower liquidity, such as “trust beneficiary rights” and “collective investment scheme interests.” Soliciting investments in hedge funds also constitutes solicitation of “collective investment scheme interests,” requiring registration under this Type II Financial Instruments Business. As of March 31, 2024, there are 1,206 registered firms.

• 3. Investment Advisory and Agency Business

  Investment advisory and agency services are divided into two categories: “investment advisory services” and “agency/brokerage services.” Investment advisory companies are the primary examples for both. “Investment Advisory Services” involve providing advice on investments in securities for a fee. General economic information, such as economic forecasts, does not fall under the Investment Advisory Services defined by the Financial Instruments and Exchange Act. Registration for “Investment Advisory Services” is required when providing specific advice on investment targets, timing of trades, or other concrete investment recommendations. “Agency and Brokerage Services” involve handling financial instruments or financial services that fall under either “Discretionary Investment Services”or financial services that fall under “investment advisory services” at their own counters or similar locations. Investors (customers) purchasing these products or services enter into contracts with the originating investment trust management companies or investment advisory firms regarding the management or purchase of the products. The act of a securities company or similar entity acting as an intermediary for this constitutes “agency and brokerage services.” As of March 31, 2024, there are 990 registered firms.

• 4. Content of Investment Management Business

  Investment management business primarily encompasses “discretionary investment management services” conducted by entities such as investment trust management companies and J-REIT management companies, as well as “fund management services” conducted by entities such as hedge funds and venture capital firms. As of March 31, 2024, there are 429 registered entities.

• 5. Qualified Investor Exemption Business

  When a fund offers its units to one or more qualified institutional investors (professional investors defined by law) and 49 or fewer general investors, and other requirements specified by law are met, the fund can be operated without registration as a financial instruments business by submitting a prior notification.

• Step 01
  

  Preliminary Consultation

• Step 02
  

  Submission of Application

• Step 03
  

  Review

• Step 04
  

  Registration

• Step 05
  

  Association Member/ADR Member

• Step 06
  

  Security Deposit for Activities and
  Notification Regarding the Security Deposit

• Step 07
  

  Commencement of Operations

Average 4 to 6 months (excluding Type I Financial Instruments Business)

(Note) When prior consultation with the Financial Bureau/Financial Affairs Office and consultation regarding joining the Financial Instruments Exchange Association are conducted concurrently. Note that variations exist depending on the business type and the applicant’s circumstances. For detailed information, please refer to the “English Explanatory Guide on Financial License Registration Procedures” below.

English Guidebook on Financial License Registration Procedures

Prepared by the Tokyo Metropolitan Government, this guide facilitates the entry of overseas asset management firms into the Japanese market. Supervised by the Financial Services Agency, it clearly explains Japan’s financial laws and regulations, as well as the registration application procedures for financial instruments business operators.

Financial One-Stop Support Service

A support organization of the Tokyo Metropolitan Government, providing free administrative procedure support and comprehensive consulting services to foreign financial firms (asset management firms, FinTech companies, etc.) considering establishing a base in Tokyo, in collaboration with the Financial Services Agency. Additionally, “Financial Consultation Officers” provide free consultations to foreign financial firms and others, introducing financial experts and others as appropriate based on the content.

Financial Services Agency (Financial Industry Base Establishment Support Desk)

For inquiries regarding financial regulations and procedures related to overseas financial institutions establishing a base in Japan, please contact here.