The Financial Instruments and Exchange Law (FIEL) was passed
by Japan's Diet in June 2006 and superseded the Japanese
Securities and Exchange Law (SEL), the Securities Investment
Advisory Law (SIAL) and several other securities laws on
September 30 2007, marking Japan's most sweeping securities law
reform in decades.
The stated goal of the FIEL is to impose integrated
"cross-sectional" regulation on all investment vehicles used
for investments in Japan. This has increased the regulatory
burden on certain types of investment vehicles, particularly
so-called silent partnerships (tokumei kumiai, or
TKs), that had been lightly regulated under the SEL. Regulatory
inconsistencies also remain, as the FIEL did not replace the
Investment Trust and Investment Company Law (ITICL), which will
continue to govern investment trusts and corporate vehicles.
The FIEL also raises several unanswered questions, as noted
The FIEL regulates all forms of collective investment
schemes (CIS) unless an exemption is available....