Companies which intend to start offering the above services sometimes find it difficult to comply with the current laws and regulations. To handle such cases, the government has been trying to establish a system to attain the purpose of the regulation in a different way.
Depending on the contents of services being offered, necessary registration and requirements for such registration differ.
For each of (i) investment advisory services, (ii) investment management services and (iii) services related to investment including sale and purchase of securities in the market, different registration is required under the Financial Instruments and Exchange Act.
The requirements vary depending on the kind of registration, and the requirements for (i) above are the laxest and those for (iii) are the strictest. To complete the registration of (iii), an operator is required to be a stock company (kabushiki kaisha) and to meet the requirements concerning its financial status, its major shareholders and restriction on subsidiary business, among other requirements.
Costs and legally required running costs for registration also vary depending on the kind of registration. For example, the registration of (iii) requires 5 million yen as a deposit and 150 thousand yen as a registration and license tax, among other costs.
With respect to robo advisory/ auto-trading, the market is rapidly expanding with existing major financial institutions as well as venture companies arestarting to provide the services. It is estimated that the market will continue to expand in the future. According to a projection, the balance of the assets managed in this business area will reach approximately 5 trillion yen in 2020.
Among the companies that offer broking services, Nomura Holdings, Inc. is the No.1 company in Japan as of 2016.
As for robo advisory/auto-trading that are based on discretionary investment contracts, MONEY DESIGN Co., LTD. is in first place in Japan in terms of the amount of assets in custody as of 2016.
Which registration, of (i) through (iii) above, becomes necessary affects such matters as the amount of the burden of expenses, the period of preparation necessary for registration and required personnel, etc.