A US-based hedge fund is alleged to have failed to file a large shareholding report for Taiyo Yuden shares, raising questions about the application of the 5% rule. The disclosure obligation under the Financial Instruments and Exchange Act requires holders of more than 5% to file a report within 5 business days.
The issue of disclosure obligations for investors with large shareholdings has once again attracted attention. According to a Nikkei report, a US-based fund is alleged to have failed to file a large shareholding report for Taiyo Yuden shares, raising questions about the application of the reporting obligation for holdings exceeding 5%.
The Financial Instruments and Exchange Act requires shareholders who acquire more than 5% of a company’s shares to file a large shareholding report with the relevant Local Finance Bureau. Subsequent increases or decreases of 1% or more are also reportedly subject to the filing of a change report.
Violations of this disclosure obligation continue to occur, with approximately 1,500 cases reportedly recorded each year. Through this case, Nikkei is reporting on the challenges surrounding the effectiveness of the system.
Taiyo Yuden is at the centre of the related coverage, and those involved are watching developments in future filings and the release of additional information.