Japanese financial market regulator Financial Services Agency (FSA) has relaxed rules to allow foreign investment management open shops in the country.

There are about 55 hedge funds registered with a Japan-based head office, while only about 20 funds are domiciled in the country, according to Financial News.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

The changes were introduced by the FSA in April 2012 specifically to attract institutional investors by easing the requirements for capital the number of hired employees, thereby relaxing some of the regulatory burden for fund management companies in Japan.

The new rules mean that the capital requirement for an institutional hedge fund registered in Japan is now JPY10 million and the employees required are just two full-time members of staff and an auditor, who can be part-time.

Kazuho Suzuki, COO OF Edgebell said: "Prior to the changes, the regulatory hurdles for institutional hedge funds were very high. Before opening for business you had to hire at least seven people as investment managers and then wait a year before getting a licence – while paying those seven people. You also needed JPY50 million ($50,000) of capital."

Many hedge fund operations in Japan that target domestic and foreign institutional clients register only as investment advisory firms that advice a fund which is managed overseas.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Makoto Kikuchi, chief executive of Myojo Asset Management, said: "On paper, the rules have relaxed but, in fact, the inspection regime has become stricter. The law may say you only need a certain level of capital and staff but the authority has the discretion to require a higher level and they are typically requiring much more."