RECENT REFORMS IN JAPANESE COMPANY LAW & FINANCIAL INSTRUMENTS AND EXCHANGE ACT

This article introduces recent market conditions and circumstances around listed Companies in Japan and recent movements of the legal system for the Japanese market and listed companies. In Japan, the importance of equity finance is higher than debt finance, while the presence of the bank is decreasing. There are some features of the Japanese stock market: for example, the level of dispersion is high; the ownership ratio of the (Foreign) Institutional investors is high. So, Japan needs to collect the confidence of institutional investors and to utilize its capital and substantial power to enhance and improve the situation for making innovations. In these situations, theres are some movements relating to the legal system for market and listed companies: the revision of Japan’s Stewardship Code; the revision of Japan’s Corporate Governance Code; the amendment of Companies Act; the amendments of Financial Instruments and Exchange Act, and related regulations; and the revision of Audit Standards. Through these movements, Japan has been following the measures, policies, and legal systems (like the stewardship code and the corporate governance code) of the U.S. and some European countries to some extent. However, of course, it is not enough for Japan to follow the U.S. and some European countries, because the situations and surroundings behind the policies and legal systems are different for each country. Additionally, fundamentals and soft infrastructures are also different. At the end of this article, on the bases of introducing and analyzing these movements, the author points out that it should be needed to think of new and Asia-oriented legal systems and policies that would fit Asian listed companies.