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Rule-tightening signals Japan wants investors to toe the line

'Very, very low' 1% threshold for reporting seen as barrier to activism

Japanese Prime Minister Shinzo Abe delivers a speech on Japan's economy and investment-friendly reforms at New York Stock Exchange in 2017, although new legislation to scrutinize foreign investments in Japan is drawing fire.   © Reuters

HONG KONG -- Investors have written to the Japanese government, seeking clarification over a proposed foreign investment law that would significantly tighten scrutiny of market activity, the secretary general of the Asian Corporate Governance Association said in Hong Kong recently.

Nikkei interviewed Jamie Allen on Nov. 6, a day after he had written a second letter to the Ministry of Finance requesting further details on the law. At the core of the legislation is a requirement that foreign investors must obtain approval from regulators for investments of 1% and more in a wide range of sectors. The current rule requires permission only for investments of 10% and more in a company's shares.

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