• JPN FSA proposed a cabinet order and cabinet office ordinances pursuant to the Act amending the financial instruments and exchange act and Act on investment trusts.
• Including revisions to the tender offer and large shareholding reporting systems.
• On the same day, JPN FSA issued a preliminary regulatory impact evaluation report stating that a post-evaluation will be carried out within five years from effectiveness.
• Follows JPN FSA March 2023 issued matters to be considered by council.

Revisions to the Tender Offer System

• Review the scope of purchases that are exempt from the application of tender offers by setting the standard for cases where the number of shares purchased is extremely small, which is excluded from the so-called 30% rule, at less than 1% in one year.
• Exclude the scope of formal special related parties relationships of the acquirer and corporations with which the acquirer has a special capital relationship.
• Add flexibility to the tender offer procedures by allowing the tender offer price to be reduced in cases where the target pays dividends during the tender offer period.
• By expanding grounds for revoking a tender offer, making exemptions from regulations re the tender offer period, the revoking of a tender offer, and the obligation to solicit all offers where approval is obtained from the authorities on a case-by-case basis.
• Revise the format of tender offer notifications including re the purpose of purchase.

Revisions to the Large Shareholding Reporting System

• Specify an agreement for each exercise of individual rights, which is one of the requirements for not being considered a joint holder; clarify the scope of important proposals by reviewing the content of proposals that qualify as important proposals.
• Establish regulations on cash-settled equity derivatives transactions regarding the requirements for the application of the large shareholding reporting system.
• Plus, method for converting derivatives trading-related rights into number of shares.
• Add those with external factors like concurrent directors/funding to the list of deemed joint holders; clarify items to be described in the purpose of holding and important contracts including guarantee agreements columns of a large shareholding report.
• Improve the method of calculating shareholding ratio where there is a right to demand delivery between joint holders; review the format of the large shareholding report.

Effectiveness

• Comments shall be submitted by 13 April 2025.