This alert provides a summary of the announcement (Announcement) issued by the Kanto Local Finance Bureau (KLFB) at the beginning of August 2020. Responding to the Japanese government’s “Report concerning Promotion of Regulatory Reform,” the Financial Services Agency (FSA) announced on July 17, 2020 the FSA’s temporary treatment for applications or notifications given the circumstances of the continuing coronavirus (COVID-19) pandemic. The KLFB has sought to implement the FSA’s announcement and has temporarily changed its practice to accept Article 63 notifications to permit them to be filed by email.
A general partner (GP) of a foreign limited partnership offering its limited partnership interests in Japan and/or managing assets of such limited partnership where Japanese investors are involved may be exempted from business registration requirements under the Financial Instruments and Exchange Act (FIEA) where the GP meets the requirements for this exemption and files a notification with the KLFB pursuant to Article 63 of the FIEA (an Article 63 Notification).
Together with the Article 63 Notification, all of the following documents also need to be filed with the KLFB as supporting documents:
Although it appears that the KLFB has been aware of the global dislocations in communications and delivery structures caused by the COVID-19 pandemic, until the recent Announcement, they were not providing any special relief from the above requirements for Article 63 Notification filings. Accordingly, regardless of the COVID-19 pandemic, an original and “wet signature” Article 63 Notification together with the relevant supporting documents have still been required to be filed for all Article 63 Notifications.
While the FSA has recently promoted electronic applications and notifications through the e-Gov system, the e-Gov system for Article 63 filings is not ready for use. At the beginning of August 2020, the KLFB announced that it will grant a special treatment regarding the Article 63 filings and accept the Article 63 filings by email until the e-Gov system can handle Article 63 filings in response to the continuing COVID-19 pandemic. Under this special treatment, the KLFB will accept filing of unsigned documents or documents without a seal affixed by email.
With respect to the documents issued by public authorities (such as corporate registrations, certificates of residence or affidavits), the KLFB will accept the filing of PDF copies of these documents by email based on the assumption that the original documents are subsequently submitted to the KLFB within approximately one month following the date of the corresponding email filing.
Upon completion of the Article 63 Notification filing, in ordinary circumstances, the KLFB will affix a “receipt” stamp on the filing documents. However, in the Announcement the KLFB noted that it will only affix this “receipt” stamp only when the original “wet-signature” documents have been submitted on a paper basis. Where unsigned documents are filed, the KLFB will send the filing party or its agent an email confirming the receipt of the filing documents upon request, instead of affixing the KLFB’s “receipt” stamp.
The KLFB confirmed that this special treatment will also apply to amendment filings concerning Article 63 Notifications.
Under the FIEA, Article 63 Notification filers are required to file annual business reports with the KLFB within three months after the end of each fiscal year. In connection with the filing of these annual business reports, the KLFB encourages Article 63 Notification filers to file the reports through the online system provided by the FSA. Where it is difficult to file the annual business reports through the FSA’s online system, Article 63 Notification filers need to submit the original and “wet-ink” documents to the KLFB.
The KLFB’s Announcement confirmed that the special treatment for Article 63 Notifications filings will also apply to the annual business report filings. Accordingly, for the time being, annual business reports can be filed by email without executed documentation.
This is the sixth alert in a series from Morgan Lewis’s investment management team in Tokyo that summarizes how the COVID-19 pandemic has impacted investment fund-related businesses in Japan. For more, read our earlier alerts:
COVID-19’s Impact on Annual Report Filing Requirements in Japan
COVID-19’s Impact on Notification Filings in Japan
Update: COVID-19’s Impact on Filings to Japan’s Kanto Local Finance Bureau
COVID-19 in Japan: State of Emergency Declared, Emergency Economic Measures Issued
COVID-19: Japan, FSA Issue Announcement After Declaring State of Emergency.
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