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In response to the recent global financial crisis, there have been various
discussions held in Japan and overseas on such topics as over-the-counter (OTC)
derivative transactions, hedge funds and short selling.
In view of these discussions and the actual condition of Japan’s markets, the
Financial Services Agency (FSA) decided to commence a detailed examination on
the issues that Japan should address early next year. Based on a fact-finding survey, the FSA has compiled the “Draft Blueprint for
the Development of Institutional Frameworks Pertaining to Financial and Capital
Markets” as shown below:
Hedge fund regulation
1. Expansion of the scope of registration
Under the Financial Instruments and Exchange Act (FIEA), regulation is imposed on hedge fund managers as registered
discretionary investment managers and as registered investment trust managers.
Given that no collective investment schemes for professionals, which are subject to
a notification system, has not been confirmed at present as falling under the
category of hedge funds which could entail systemic risk, there seems to be no
need to change the regulation to make them subject to registration.
The style of investment management where foreign investment trusts marketed to
Japanese investors are set up and given instructions directly from within Japan are
not covered by the current FIEA. However, since such investment management can
be found in Japan, albeit infrequently, it should also be s...................... To view our full article Click here
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