Japan Revises Rules for In-Kind ETFs
Overview
The Financial Services Agency (FSA) invited comments from July 28 to August 28, 2026, on a draft Cabinet Office Order partially revising the Enforcement Regulations of the Act on Investment Trusts and Investment Corporations, and received 10 comments. The amendment establishes rules allowing the portion corresponding to a constituent security whose ownership ratio by the person applying to establish the ETF exceeds 30% to be established in cash. The Cabinet Office Order was promulgated and entered into force on September 18, 2026.
Key points
- Rules were established to allow the portion corresponding to constituent securities with an ownership ratio exceeding 30% to be established in cash.
- The covered portion corresponds to securities whose ownership ratio by the person applying to establish the ETF exceeds 30%.
- There were 10 public comments.
- The Cabinet Office Order was promulgated and entered into force on September 18, 2026.
Overview
The FSA published the draft Cabinet Office Order partially revising the Enforcement Regulations of the Act on Investment Trusts and Investment Corporations and invited comments from July 28 through August 28, 2026, receiving 10 comments. A summary of the comments and the FSA's views are provided in Appendix 1.
The published materials are organized into “1. Outline of the Amendment” and “2. Promulgation and Effective Date.” Appendix 2 contains the Cabinet Office Order partially revising the Enforcement Regulations of the Act on Investment Trusts and Investment Corporations.
Details
The amendment covers the portion corresponding to a constituent security of an in-kind ETF whose ownership ratio by the person applying to establish the ETF exceeds 30%. The rules were revised to allow this portion to be established in cash. The Cabinet Office Order was promulgated and entered into force on September 18, 2026.
Comments were invited from July 28 through August 28, 2026. A summary of the comments received and the FSA's views are presented in Appendix 1, while the specific details of the amendment are presented in Appendix 2.