[Newsletter] Policy Research Institute: "Report of Working Group on Capital Market Regulations and Asset Management Task Force of the Financial System Council"

Report of Working Group on Capital Market Regulations and Asset Management Task Force of the Financial System Council -“Promotion of New Entrants in the Asset Management Business and Support Program for New Entrants (Japanese EMP (Emerging Managers Program))"-

1． Promotion of New Entrants in the Asset Management Business

(1) Deregulation of Entry Requirements for Asset Management Businesses

A)      Deregulation of Entry Requirements for Asset Management Businesses, Outsourcing of Middle- and Back-office Operations

For operators who have entered the market through professional frameworks (e.g., investment management business for qualified investors and specially-permitted business for qualified institutional investors, etc.), it was expected that as their business expanded, they would transition into the general asset management business (the businesses targeting general investors). However, the number of asset management firms in Japan has not showed significant growth.

The main functions required for conducting asset management operations are as follows:

1. Management operations for funds and similar entities;

2. Investment operations; and

3. Tasks related to accounting and legal compliance (so-called "middle- and back-office operations ").

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