Overview of Japan’s Large Shareholding Reporting System (5% Rule)— Summary Based on the Local Finance Bureau Q&A —
1. When does the filing obligation arise?
If a person acquires more than 5 percent of the total issued shares of a company listed on a Japanese financial instruments exchange, a Large Shareholding Report must be filed.
The report must be filed within five business days from the date on which the person became a large holder.
2. Holding is determined by substance, not by name registration
Under this system, whether the shares have been transferred into your name is not decisive.
Even if the shares are registered under another person’s name, they are treated as held if you substantively own or control them.
The reporting obligation cannot be avoided just because the shares are not registered in your own name.
3. When is an Amendment Report required?
After filing a Large Shareholding Report, an Amendment Report must be filed in the following cases:
- When the shareholding ratio increases or decreases by 1 percent or more
- When there is a change in material information, such as name, address, or composition of joint holders
Changes in joint holding relationships may also trigger the obligation.
4. How is the shareholding ratio calculated?
The shareholding ratio is calculated as follows:
Number of shares held divided by total number of issued shares.
The denominator is the total number of issued shares as of the date the reporting obligation arises.
All issued shares are included in the calculation regardless of whether they carry voting rights.
Market capitalization and acquisition price are not used in determining the reporting obligation.
5. Concept of joint holders
The shares held by joint holders must be aggregated.
Joint holders include:
- Persons who have agreed to jointly acquire, transfer, or exercise voting rights
- Persons deemed joint holders under certain control or family relationships
A written agreement is not required. The actual relationship is considered.
6. Filing method
Large Shareholding Reports and Amendment Reports must be filed electronically through EDINET.
Paper filings are not accepted.
Inquiries Regarding Preparation and Filing of Large Shareholding Reports
We provide professional support for the preparation and electronic filing via EDINET of Large Shareholding Reports, including Amendment Reports and Corrective Reports.
Our services include:
- Determination of filing obligations
- Analysis of joint holders and calculation of shareholding ratios
- Review of required attachments
- Management of filing deadlines
For inquiries or engagement requests, please contact us through the inquiry form on our website.