ACGA Response to Japan Ministry of Finance consultation on FEFTA

2026-07-31

On 31 July, ACGA submitted a response to Japan’s Ministry of Finance (MOF) on proposed subordinate legislation implementing the recent amendments to the Foreign Exchange and Foreign Trade Act (FEFTA). We expressed that it is critical to investors that the sectors and technologies covered under FEFTA are defined clearly and in terms that are readily ascertainable by both investors and companies. Our recommendations focused on material protections and considerations from an investor perspective.

ACGA’s principle recommendations were:

1. Adopt a control- and influence-based passive-investment exclusion, available across both direct and indirect acquisitions, and preserve proportionate exemptions for regulated financial institutions and ordinary-course fiduciary investment.

2. State expressly that legal title held by a custodian or nominee does not by itself attribute investment discretion, voting authority or beneficial ownership.

3. Attribute holdings among funds, accounts, managers, advisers, sub-advisers and affiliates only where a person has actual discretionary authority or there is an agreement or concerted policy to exercise relevant rights together.

4. Use objective published thresholds and definitions for key concepts and provide worked examples and a rapid no-action process.

5. Limit post-investment filings for changes to risk-mitigation measures, and ongoing reporting obligations to material changes reasonably capable of affecting the original national-security assessment.

6. Publish consolidated rules, forms, Q&A, sector lists, examples, contact points, expected processing times and worked examples.

We thank our members who contributed their inputs. The ACGA full response can be found here.