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EDINET Service outline

Service outline

Have you ever experienced difficulties with the submission and administration of Reports of Possession of Large Volume while running your business in Japan?

Are you aware of the five percent rule?

When you purchase or sell a large number of stocks of a company listed in Japan, you are required to submit a Report of Possession of Large Volume. First of all, you are required to submit a report if the number of stocks you hold exceeds 5% of the total number of stocks issued by that company, and after that, if the amount of stocks you hold increases or decreases by more than 1%. The Report of Possession of Large Volume must be submitted to the Financial Services Agency within five business days through the Edinet system.

In case you fail to submit the report, you will face a surcharge and a cautionary warning.

This system was established in Japan to ensure the fairness of dealings on the stock exchange.

In order to submit the Report of Possession of Large Volume, it is necessary to have a bureau or branch office within Japan, which is listed in the Japanese stock exchange, at which you can be contacted (according to the Financial Instruments and Exchange Act, article 27-23-1).

The submission of the Report of Possession of Large Volume must be done quickly and accurately. Furthermore, you must be able to respond to phone calls and receive post from the Financial Services Agency.

However, do not worry!

Our company is able to act on behalf of your company in this matter. We offer the following services:

1.Applying to the Financial Services Agency
2.Preparation, submission and administration of the Reports of Possession of Large Volume
3.Corresponding by phone with the Financial Services Agency
4.Receiving post on your behalf, and forwarding post to clients
5.Registration as an administrative point of contact on your behalf
6.Functioning as a standing proxy

Our company will support you in the entire process of submitting the application documents.

Achieving regulatory compliance and cost reduction at the same time!

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Our company offers the following services as an agent:

1.Application to the Financial Services Agency

Applying for an Edinet code, user ID and password from the Financial Services Agency on your behalf.

2.Preparation, submission and administration of the Reports of Possession of Large Volume

Preparing paperwork for submission to Edinet, submitting the documents, and taking care of data management on your behalf.

3.Correspondence by phone with the Financial Services Agency

Handling phone calls directed to your company from the Financial Services Agency and the share-issuing company.

4.Reception of post on your behalf and forwarding post to clients

Receiving and forwarding post from the Financial Services Agency and the share-issuing company.

5.Registration as an administrative point of contact on your behalf

If you sign a proxy statement with us, our company can respond to all inquiries from the Financial Services Agency on your behalf. Our company will function as the “Tokyo branch” of your company.

6.Functioning as a standing proxy
Taking care of dealings on the stock exchange through a stockbrokerage firm on your behalf (additional costs involved).

On top of these fees, we have to charge a 10% management fee and 8% consumption tax.In order to provide a proxy statement, it is necessary to sign a custody contract with us.

Our company can support you in the entire process of submitting the application documents by offering the services listed above.

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FAQ: Report of Possession of Large Volume system

1.What is the Report of Possession of Large Volume system?

In accordance with Japan’s Financial Instruments and Exchange Act, those holding over 5% of a publicly listed company’s stocks certificates or investment securities are required to submit legal documents to the Financial Services Agency. This system is called the Report of Possession of Large Volume system, or the five percent rule.

2.In which cases is it necessary to submit a Report of Possession of Large Volume?

1.If you have newly acquired over 5% of a publicly listed company’s total amount of shares outstanding.
2.After that, if the number of shares you hold has increased or decreased more than 1% (including changes other than ownership ratio which affect the shareholder or joint holder, such as business name, address, collateral agreement, etc.).

Furthermore, be aware that if the shareholder in question does not submit the Report of Possession of Large Volume or alteration report within five working days (excluding weekend days and Japanese national holidays), they are in violation of the Financial Instruments and Exchange Act.

3.Regarding holders of shares of listed companies
The person submitting the Report of Possession of Large Volume or alteration report (referred to as the holder), must add up the number of held shares and calculate their equity ownership ratio. In case the holder’s equity ownership ratio is over 5%, they are considered to be a large volume shareholder and are obliged to submit a report.
Furthermore, in case there is a joint holder, the holder must add up their shares as well when calculating the equity ownership ratio.

* A joint holder is a person who jointly acquires shares, transfers shares, or who can exercise voting rights (real joint shareholder). Furthermore, a spouse, a majority stockholder (who has more than 50% of voting rights) of a controlled company, or controlled companies who have the same majority stockholder, are also considered joint holders.
However, a person who owns less than 20 shares or units is excluded from the considered joint holders.

4.Where to submit the Report of Possession of Large Volume

The Report of Possession of Large Volume should be submitted to the financial bureau that exercises jurisdiction over the location where the person submitting the report lives (in case of a corporation, the location of the head office). In case the person lives outside Japan, documents must be submitted to the Kanto Local Finance Bureau.

However, it is mandatory to submit Reports of Possession of Large Volume, alteration reports, or rectifications regarding these reports to Edinet, in the same way as other disclosure systems under the Financial Instruments and Exchange Act.

5.How to submit the Report of Possession of Large Volume

Since April 1st 2007 it is mandatory to submit the Report of Possession of Large Volume (including alteration reports and reissued reports) through the electronic disclosure system Edinet. Therefore, you must submit all Reports of Possession of Large Volume through the Edinet system.

6.Sanctions for reporting violations

A new surcharge system for the Report of Possession of Large Volume system has been introduced under the Financial Instruments and Exchange Act.

1.First of all, the range of subjects of the surcharge has been expanded. Under the new surcharge system, the following persons will also be subject to a surcharge:

a.Those who do not submit a Report of Possession of Large Volume
Persons who do not submit a Report of Possession of Large Volume or alteration to the Report of Possession of Large Volume by the deadline may face a surcharge.

b.Those who make a false statement in the Report of Possession of Large Volume
In case a false statement is made regarding important items, or if important items are missing from the report, a surcharge may be imposed. (In case the report submitted is A) a Report of Possession of Large Volume, B) an alteration to the Report of Possession of Large Volume, or a restatement of report type A or B.)

2.The amount of the surcharge
The surcharge will be 1/100.000th of the total market value of the stocks issued by the company regarding which you had the obligation to submit the Report of Possession of Large Volume. (For example, if the company’s total market value is 1 trillion yen, the amount of the surcharge will be 10 million yen.)

3.Rules regarding decrease or increase of the surcharge
Under certain circumstances the amount of the surcharge can be decreased or increased.

a.Decrease of the surcharge
The amount of the surcharge will be decreased by half in case the person who failed to submit the Report of Possession of Large Volume submits a declaration to the Securities and Exchange Surveillance Commission before the authorities perform an inspection of the report.

b.Increase of the surcharge
In case a person who was subject to the surcharge within the last five years violates the regulations again, the surcharge will be increased by one-and-a-half.

7.Problem points regarding the submission of the Report of Possession of Large Volume

To submit the Report of Possession of Large Volume, accurate information must be provided within a very short amount of time. Those who fail to do so will face a high surcharge.

Many people wish to submit the reports on paper, rather than through Edinet, due to their lack of experience in using computers. However, under the current law, submissions on paper will not be accepted. The only acceptable way to submit the report is through Edinet.

Even for people with good computer skills it is nearly impossible to submit the Report of Possession of Large Volume within five days, especially if it is their first time to submit the report.
This is because even if you submit the report with haste, it usually takes two or three days to submit the application to the Financial Services Agency. Therefore the person submitting the report has only two or three days left to familiarize themselves with the Edinet submission manual (which is several hundred pages long), set up the Edinet system, make alterations to the files, and submit the file in the format conforming with the Financial Instruments and Exchange Law. If one fails to do so, the system will give an error and it will not be possible to submit the report.

This means that although the Report of Possession of Large Volume must be submitted to Edinet within five business days, one must first understand the Edinet system and become familiar with the Financial Instruments and Exchange Law.

For individuals who are only specialized in computer technology or companies who only specialize in accounting or data conversion and generation, it is difficult to fulfill these requirements.

Therefore, our company can perform these tasks on behalf of your company, using the required professional technology.

Contact Us Financial Services Agency
http://www.fsa.go.jp/en/index.html

Company profile

Data conversion service for various types of data

In order to comply with new laws and regulations, it has become necessary to convert documents that you used to create as Word or PDF files to other formats such as XBRL, SGML and HTML. Horizon Data Works is a professional providing specialized electronic document technology which is needed for this task. We offer our services at a clear price, and are able to swiftly respond to your requests at any time.

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SGML conversion service for medicine package inserts

Horizon Data Works offers support in creating SGML data files for medical equipment, medicinal products for in-vitro diagnostics, and drug package inserts for ethical pharmaceuticals. Furthermore, we can help you register these files (including image files and PDF data) at the information homepage of the Pharmaceuticals and Medical Devices Agency (PMDA).

Related services:

  • XML and SGML conversion service for documents related to drug trials and application documents.
  • Developing and marketing a program for the entry of survey slips after production and distribution.
iXBRL (HTML) data conversion service for legal disclosure documents

We can support you in creating iXBRL data (body text and financial statement parts) for a variety of statutory disclosure documents which you are obliged to submit, such as the Yuho securities report (for companies or funds) or the Report of Possession of Large Volume. Furthermore, we can assist you in registering with Edinet, the electronic disclosure system for securities reports and other disclosure documents, based on the Financial Instruments and Exchange Act.

Related services:

  • Development and marketing of iXBRL Creator, a tool for creating iXBRL and XHTML files for submission to Edinet
  • A legal check by an affiliated lawyer of your statutory disclosure documents

Furthermore, we offer data conversion services for SGML, iXBRL, HTML and XML, as well as printing services. Please contact us for more information.

For inquiries, contact us at:

Business name Horizon Data Works Co., Ltd.
Established November 25, 2011
Capital 6,500,000 yen
Representative director Tsutomu Koshimitsu
Headquarters AIOS Gotanda Eki-mae 5F, Nishi-Gotanda 1-11-1, Shinagawa-ku, Tokyo 141-0031, Japan
Telephone number +81 (0)3-5740-3980
FAX +81 (0)3-5740-3981
Email info@horizondataworks.com

※Please contact us by email.
 Employees that can speak foreign language are not stationed in our company.

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