Expansion of trust managers under the 2004 amendments to the Trust Business Act

The 2004 amendments to the Trust Business Act extended the realm of managers of trusts to trust companies in addition to financial institutions concurrently conducting trust business. The expansion of companies that manage trust business is expected to expand the trust system, improve its service and convenience to users promoting competition, and increase the size of the overall market.

Financial institutions concurrently conducting trust business and trust companies

Enacting legislation License/ registration Structure Minimum capital Amount of business security deposit Main business operations
Financial institutions concurrently conducting trust business Banking Act (Establishment) #1
Concurrent Business Act (Approval for Trust business) #2
License #1 Financial institutions such as banks 2 billion yen #1 25 million yen Trust business
Concurrent operation #3
Banking business
Investment-based trust companies (including investment-based foreign trust companies) Trust Business Act License Stock company 100 million yen 25 million yen Trust business
Accompanying business #4
Custodian-type trust companies (including custodian-type foreign trust companies) Trust Business Act Registration
(Updated every 3 years)
Stock company 50 million yen 10 million yen Custodian-type trust operations #5
Accompanying business #4
Trusts within the group companies #6 Trust Business Act Notification Company - - Management of assets held by companies belonging to the same group
Technology Transfer Institutions (authorized TLO)
#7
Trust Business Act Registration Juridical person - 10 million yen Acceptance of a trust that falls under the category of a specified university technology transfer project
Note
  1. The establishment, licensing, organizational structure, and minimum capital of financial institutions other than banks are determined by their respective fundamental laws.
  2. The provisions of the Trust Business Act are applied mutatis mutandis to trust banks and others pursuant to Article 2 of the Concurrent Business Act.
  3. Concurrent operation is the business defined in the Concurrent Business Act Article 1 (1) Items 1 to 7. The main business is real-estate business, securities agency business, and will (inheritance)-related business. Furthermore, restrictions apply to trust banks that can handle real-estate business.
  4. Accompanying business is restricted to separately authorized business related to trust business that is considered unlikely to impede trust business.
  5. Custodian type trust business is the administration and disposal of trust property based on the instructions of the settlor or a person entrusted by such settlor with the authority to give instructions, and undertaken only in relation to the use, enhancement, and preservation of trust property to the extent that it does not change the quality of the asset.
  6. In trusts within group companies, the settlor, trustee, and beneficiary belong to the same group company. Transfer of beneficial interest outside the group is prohibited.
  7. Technology transfer organizations (authorized Technology Licensing Organizations or TLO) transfer the results of technological research at universities and other institutions to companies.

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