Amendments to The Retail Mutual Funds (Japan) Regulations (2007 Revision)
The Retail Mutual Funds (Japan) Regulations (2007 Revision) (the "Regulations"), which regulate licensed mutual funds that offer their securities to the public in Japan ("retail mutual funds"), have been amended. The amendments are contained in The Retail Mutual Funds (Japan) (Amendment) Regulations, 2012 which were implemented on 31 August 2012. The principal purpose of the amendments is to ensure that the Regulations keep pace with changes to the corresponding rules in Japan and their practical application. The majority of the amendments are to the provisions of the Regulations which restrict the investment activities of retail mutual funds. In particular, the restriction on acquiring the shares of any one company will no longer apply if the company in question is an investment company. In addition, the restriction on acquiring an investment, which is not listed on an exchange or which is not readily realisable, will not apply if the method of valuing such investment is clearly disclosed in the retail mutual fund's prospectus.
The provision of the Regulations dealing with changes in the directors of a retail mutual fund's investment adviser has also been amended in a way which should address the practical difficulties of complying with that provision. In future, only managers of retail mutual funds will be required to obtain approval before making changes to their directors. Furthermore, that approval need only be obtained from the operator of the relevant mutual fund (the trustee, in the case of a unit trust), rather than from the Cayman Islands Monetary Authority or the mutual fund's investors as had previously been the case.
If you are not an existing Maples and Calder client, you are welcome to contact one of our Global Funds Group partners listed above to discuss the amendments to the Regulations in more detail.