Securities Law Enforcement in Japan

Japan's Financial Services Agency has written an explanation regarding enforcement of Japan's Securities and Exchange law. The law provides for:

• enforcement of corporate disclosure rules;
• civil penalties for breach of disclosure rules; and
• a review of takeover rules.

Foreign company reports that are written in English must be submitted annually and are deemed to constitute "foreign company reports" under Japan's Enforcement Ordinance of the Securities and Exchange Law. Parent companies of listed subsidiaries must also report, but may do so by making its home-country disclosure documents available for review in Japan. Penalties for violations of the disclosure rules are calculated based on the market value of the shares; the new rules provide guidance on how these amounts are calculated.