The main changes to the QII exemption are as follows: (i) the information to be included in the filing documents for using the QII exemption has been increased; (ii) certain code of conduct rules and reporting rules applied to registered investment funds will also become applicable to the investment funds utilising the QII exemption; (iii) certain qualification requirements will be introduced for non-QII investors making an investment into investment funds using the QII exemption; and (iv) the authorities will have wider supervisory powers over the investment funds using the QII exemption, such as being able to issue business suspension orders.
It is common for investment funds outside Japan to use the QII exemption when the Japanese investor is solicited for investment and makes an investment. Even if not domiciled in Japan, investment funds with Japanese investors should be well prepared to comply with the new rules with regard to the QII exemption.
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