Advocacy Talking Points 16 December 2019
Amendments to Japan's Foreign Exchange and Foreign Trade Act (FEFTA)
「外国為替及び外国貿易法（FEFTA）の一部を改正する法律案」に関する調査
Results of the CFA Society Japan and CFA Institute survey
On October 8, 2019, the Ministry of Finance (MOF) in Japan, unveiled a proposed amendment to the Foreign Exchange and Foreign Trade Act (FEFTA). This amendment lowers the ownership threshold in companies deemed to be nationally sensitive from 10% to 1% before government pre-approval is required for foreign shareholders.
Subsequently, the MOF has included provisions to exempt from this 1% prenotification requirement investors that are neither seeking board seats nor looking to propose shareholder resolutions on sales or divestments. For these investors only a post-investment report will be required.
As this amendment is of significant importance to the investor community both in Japan and overseas, from November 15, 2019 to November 27, 2019, CFA Society Japan and CFA Institute conducted a survey of professionals in the investment industry in order to gauge their understanding and concerns on the amendment to FEFTA.
The survey met with high interest of the investment community, whose members were keen to express their opinion on this matter. We were able to collect 115 responses, 70 of which came from practitioners at Japanese institutions and 45 from outside Japan.
The results show that almost 70% of respondents do not agree with the amendment, and 86% are concerned that the amendment might have a negative impact on investment into the Japanese equity market.
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CFA Institute is the global association of investment professionals that sets the standard for professional excellence and credentials. The organization is a champion of ethical behavior in investment markets and a respected source of knowledge in the global financial community. Our aim is to create an environment where investors’ interests come first, markets function at their best, and economies grow.