What Happens After You Cross 5 Percent in a Japanese Listed Company?

Foreign investors acquiring shares in Japanese listed companies should understand what happens immediately after crossing the 5 percent ownership threshold.

This article explains, step by step, the filing obligations and ongoing reporting requirements under Japan’s Large Shareholding Reporting System.

1. The filing obligation arises on the date you exceed 5 percent

The obligation to file a Large Shareholding Report arises on the date the holder exceeds 5 percent of the total issued shares.

The report must be filed within five business days from that date.

Business days exclude Saturdays, Sundays, national holidays, and the period from December 29 to January 3.

2. How the shareholding ratio is determined

The shareholding ratio is calculated as follows.

Number of shares held divided by total number of issued shares.

The denominator is based on the total issued shares as of the date the reporting obligation arises.

All issued shares are included, regardless of whether they carry voting rights.

3. Aggregation with joint holders

When calculating the shareholding ratio, shares held by joint holders must be aggregated.

Joint holders include the following.

• Persons who have agreed to jointly acquire, transfer, or exercise voting rights
• Persons deemed joint holders due to certain control or family relationships

A written agreement is not required. The actual relationship is considered.

4. Amendment reports after the initial filing

After filing the initial Large Shareholding Report, an Amendment Report must be filed if the following occurs.

• The shareholding ratio increases or decreases by 1 percent or more
• There is a change in material information such as name, address, or joint holder composition

The monitoring obligation continues after the first filing.

5. Electronic filing requirement

All Large Shareholding Reports and Amendment Reports must be filed electronically through EDINET.

Paper filing is not permitted.

6. Ongoing compliance after crossing 5 percent

Crossing the 5 percent threshold is not a one time event.

Investors must continue monitoring their shareholding ratio and any changes in joint holding relationships to determine whether further Amendment Reports are required.

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 the following.

• Assessment of filing obligations
• Calculation of shareholding ratios
• Analysis of joint holder status
• Review of required attachments
• Management of filing deadlines

For inquiries or engagement requests, please contact us through the inquiry form on our website.