Introduction Of "Simplified" Type 1 License

1. Background

On May 15, 2024, the Diet passed into law amendments to the Financial Instruments and Exchange Act (the "FIEA") (the "Amendments"). While the Amendments contain many important measures, one of the noteworthy measures is to deregulate the requirements for the registration of a Type 1 financial instruments business (a "Type 1 License") under the FIEA for a person who engages only in the distribution of unlisted securities to certain professional investors. The proposed subordinated regulations under the Amendments relating to the introduction of a new special intermediary business operator license dealing with unlisted securities, which is the socalled "simplified (or attenuated)" Type 1 License, have undergone the public comment process and are in the process of finalization. They are expected to become effective around early May 2025.