Choose Site

LawFlash

COVID-19’s Impact on Article 63 Notification Filings in Japan: Regulators Face New Normal

August 12, 2020

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.

Article 63 Notification Filings

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:

  • An original of the oath of the GP as an entity
  • A copy of the articles of incorporation of the GP
  • A certified copy of the GP’s corporate registration or equivalent document (e.g., an original of the signed and notarized affidavit issued by the GP’s representative)
  • An original of the resume with respect to officers and key employees of the GP
  • An original of the certificate of residence or equivalent document (e.g., an original of the signed and notarized affidavit in respect thereof) for the officers and key employees of the GP
  • An original of a certificate of competency or equivalent documents (e.g., an original of the signed and notarized affidavit) with respect to officers and key employees of the GP
  • An original of an oath made by the officers and key employees of the GP in their individual capacities

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.

Announcement from the KLFB

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.

Annual Business Report

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.

Additional Resources

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.

CORONAVIRUS COVID-19 TASK FORCE

For our clients, we have formed a multidisciplinary Coronavirus COVID-19 Task Force to help guide you through the broad scope of legal issues brought on by this public health challenge. Find resources on how to cope with the post-pandemic reality on our NOW. NORMAL. NEXT. page and our COVID-19 page to help keep you on top of developments as they unfold. If you would like to receive a digest of all new updates to the page, please subscribe now to receive our COVID-19 alerts, and download our biweekly COVID-19 Legal Issue Compendium.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Tokyo

Christopher P. Wells
Tomoko Fuminaga
Narumi Ito