On June 27th, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) opened a public comment period for a proposed amendment to the enforcement rules of the Ordinance for Enforcement of the Real Estate Specified Joint Enterprise Act.
The amendment aims to address the emerging trend in Japan of using blockchain technology to tokenize and circulate ownership rights under specified joint enterprise contracts, usually in the form of Security Token Offerings (STOs).
The MLIT ‘s proposal is to redefine the sales and solicitation of tokenized assets as a "specified solicitation business”.
As background, the 2023 amendment to the Financial Instruments and Exchange Act (Act No. 79 of 2023) extended existing sales and solicitation regulations to these tokenized ownership rights.
Consequently, the Real Estate Specified Joint Enterprise Act (Act No. 77 of 1994) was also amended.
Now, under the new MLIT proposal, failing to register as a financial instruments business for tokenization solicitation will now be considered grounds for disqualification to operate said business.
The deadline for submitting comments is July 27, 2024. For more details and to submit comments, please visit e-Gov (link in Japanese only).
Enforcement of the proposed amendment is expected to be within one year from its original promulgation on November 20, 2023.
Further Reading:
MLIT Amendment Summary (Japanese only)
Source:
R.E. Port News (Japanese only)
