Introduction
- This Guide provides an overview of certain key changes to the Large Shareholding Report (“LSR”) regime in Japan. On 22 May 2024, the Diet of Japan passed the bill of amendments to the Financial Instruments and Exchange Act of Japan (the “FIEA”, and as so amended, the “Amendment Act”). Following a public consultation, the Enforcement Order and Cabinet Office Order (together with the Amendment Act, the “Amendment Regulations”) were approved by the Cabinet on 1 July 2025 and promulgated on 4 July 2025. The relevant provisions of the Amendment Regulations in relation to LSRs will come into effect on 1 May 2026.
- The LSR regime in Japan was first introduced in 1990 and has not undergone major revisions since 2006. The regime sets out the disclosure obligations for large shareholders to promote market transparency and fairness by ensuring that investors have access to timely information in relation to significant shareholdings. Over time, market developments – such as the rise of passive investment strategies, the growth of collaborative engagement among shareholders, and the increasing emphasis on constructive dialogue between companies and investors – highlighted various issues with the existing regime. These concerns were reviewed by the Financial Services Council’s “Working Group on Tender Offer Systems and Large Shareholding Reporting Systems” in 2023. The Working Group published a report of its recommendations on 25 December 2023 and the revised LSR regime under the Amendment Regulations is intended to reflect such recommendations.
- The amendments to the LSR regime are extensive, as is the updated guidance issued by the Financial Services Agency (“FSA”) with respect to the existing rules that were not technically amended as part of the Amendment Regulations. This Guide aims to assist AIMA members investing in Japanese listed equities in understanding and navigating these changes, with a particular focus on the amendments most relevant to institutional investors.
- This Guide was prepared with the assistance of legal counsel, drawing on materials published by the FSA, including its responses to the public consultation (“Public Consultation Response1”) in July 2025.. We wish to thank law firms Iwaida Partners and Akin Gump for their contributions to this Guide, as well as the AIMA Japan Regulatory and Tax Committee.
- This Guide is for educational purposes only and does not constitute legal or investment advice and should not be relied upon as a substitute for professional legal counsel or financial advisors. This Guide does not comprehensively set out all aspects of the Amendment Regulations. Please consult with a licensed legal or financial professional concerning your specific circumstances.
- Certain changes described in this Guide do not apply, or apply only in a limited manner, to filers that rely on the special reporting system under the FIEA (which relaxes the frequency and deadline of submission of LSRs by certain eligible financial instrument business operators or institutional investors that continuously engage in the sale and purchase of shares in their day-to-day operations). While the Amendment Regulations expand the disclosure obligations for ordinary LSR filers, special reporting system filers may continue to benefit from various exemptions if they satisfy certain conditions. Accordingly, the amendments summarised in this Guide should therefore be read in light of the filer’s reporting status under the FIEA.
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