Leveling the Playing Field? Japan’s New Fair Disclosure Rule

Author: Yasuhiro Kasahara

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Publisher: Nagashima Ohno & Tsunematsu

Journal / Book: NO&T Japan Legal Update No.10 (July, 2017)

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*Please note that this newsletter is for informational purposes only and does not constitute legal advice. In addition, it is based on information as of its date of publication and does not reflect information after such date. In particular, please also note that preliminary reports in this newsletter may differ from current interpretations and practice depending on the nature of the report.

I. Introduction
On May 17, 2017, the Act for Partial Revision of the Financial Instruments and Exchange Act of Japan (the ‘FIEA’) was enacted and a fair disclosure rule was introduced in Japan for the first time (the ‘FD Rule’).

Once the FD Rule comes into effect, it will prohibit Japanese listed companies from making selective disclosures to certain types of recipients. The objectives of the FD Rule are to ensure the fair and timely disclosure into the public domain of material information about the disclosing company and to prevent market participants with access to selective disclosures from making a profit or avoiding a loss at the expense of other participants who may not have received such disclosures.

The FD Rule is similar to Regulation FD in the US. It is due to come into effect by no later than May 24, 2018.

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