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Support your overall business for EDINET

Have you ever experienced difficulties with the submission and administration of the Large Shareholding Report (Reports of Possession of Large Volume) in Japan?
HORIZON DATA WORKS is a professional company for the Large Shareholding Reports.
We can assist clients in the overall business for EDINET, from preparation to administration, as a professional agency for the preparation of the reports.
We provide accurate and prompt services at a more reasonable price than law firms and accountancy firms.

Obligation to submit Large Shareholding Report – as known as “5% Rule”

If you become a shareholder with more than 5% of the total number of shares issued by a listed company in Japan, you are obliged to disclose a Large shareholding Report (Report of Possession of Large Volume / Report of Large Volume Holding) on EDINET ("Electronic Disclosure for Investors' NETwork", operated by the Financial Services Agency), and you are also required to disclose Change Reports each time your Ownership Ratio increases or decreases 1% or more, or other specific change occurs (for example, increase and decrease of joint shareholders).

The Large shareholding Report (Report of Possession of Large Volume) must be submitted on the EDINET within five business days (according to the Financial Instruments and Exchange Act, article 27-23-1).

What happens if a shareholder does not submit a proper Large Shareholding Report?

The EDINET was established to ensure the fairness of dealings on the stock exchange in Japan, therefore, in the case (1)a shareholder does not submit a proper Large Shareholding Report (Reports of Possession of Large Volume), or (2)a report (including Large Shareholding Report, Change Report, and Amendment Report of Large Shareholding Report) containing false information, there is a possibility that the shareholder could be surcharged, warned, and listed their name on the website by the FSA. According to the Article 197-2 of the Law, those shareholders who do not obey the law may be liable to imprisonment for up to five years or a fine of up to five million Japanese yen, or both.
The submission of the Report of Large Volume Holding must be completed quickly and accurately.

Language support is absolutely necessary for submission of the Large Shareholding Report

It is necessary to have an administrative branch office in Japan in order to submit the Large Shareholding Report, and a contactable phone number and contact person’s name must be disclosed on the EDINET. All shareholders who submit the Large Shareholding Report have to respond to phone calls in Japanese language and receive post from the Financial Services Agency, however, the FSA does not provide any English support at the present time.

Our services for EDINET - From obtaining an EDINET CODE to responding to the FSA

HORIZON DATA WORKS can act on behalf of clients, therefore, our clients do not have to be troubled about the language barrier and difficulty with the unfamiliar EDINET system. We have a lot of knowledge and experience related to EDINET, from obtaining an EDINET CODE to responding to the FSA. As we have provided very reasonable, prompt, and accurate services, we currently have a high market share in the preparation and submission of large shareholding reports. We have over 200 clients, and they are not only in Japan, but also from around the world.

We provide the following services:

1. Applying to the Financial Services Agency for obtaining an EDINET CODE and creating an EDINET account
2. Preparation, submission, and administration of the Large Shareholding Report, Change Reports, and Amendment Reports of Large Shareholding Report
3. The agent of administrative contact on behalf of clients without any branch or contact person in Japan. Corresponding by phone with the FSA and third parties (e.g., investors and journalists) on behalf of clients, also receiving post from the FSA and forwarding it to clients.
4. As a standing proxy, we can manage the stock exchange through a stock brokerage firm on behalf of clients (additional costs would be charged).

For all clients who concern about high legal fees

We offer our professional services with low price, therefore, the clients can achieve regulatory compliance and cost reduction at the same time. Of course we will support you in the entire process of EDINET from application for an EDINET CODE to submission of the Large Shareholding Report, however, the service is focused on what is really needed, so we can offer the most reasonable service fee in the reporting agency industry.

EDINET Service Detail

We offer the following services as an agent:

1. Application to the Financial Services Agency

Apply for an EDINET code to the Financial Services Agency and create an account of EDINET website on behalf of clients.

2. Preparation, submission, and administration of the Large Shareholding Report

We calculate shareholding ratio, create and convert the Large Shareholding Report(the Report of Possession of Large Volume), Change Reports, and Amendment Reports of Large Shareholding Report to the format as required by the Law, and submit it on the EDINET website. The report will be disclosed on the EDINET immediately.

3. Act for the clients as an agency in Japan

We correspond with issuers, investors, and especially the FSA (who frequently asks questions to submitters and does not provide any English support), respond to their telephone enquiries on behalf of clients. This service is also very useful for private investors who want to conceal their phone number from public. In addition, we receive post and forwarding it to clients as a registered administrative office in Japan.

4. Functioning as a standing proxy

Manage the stock exchange through a stock brokerage firm on behalf of clients (additional costs would be charged).

5.Registration as an administrative point of contact on your behalf

If you sign a proxy statement with us, our company can respond to all inquiries from the Financial Services Agency on your behalf. Our company will function as the “Tokyo branch” of your company.

A data management fee (10%) and a consumption tax (10%) shall be applied to the total amount of service fees each time.
Clients have to sign a custody agreement with us in order to be provided a proxy statement.

We can support you in the entire process of EDINET, not only submitting Large Shareholding Reports, but also creating an EDINET account and acting as an administrative agency in Japan, furthermore, our services are provided at very reasonable price. You do not have to hire an interpreter or make a high-priced contract with an international law firm or an accountancy firm. (Unfortunately securities companies do not provide support in the preparation of the reports.)

FAQ: Large Shareholding Report(Report of Possession of Large Volume) system

1. What is Large Shareholding Report(Report of Possession of Large Volume / Report of Large Volume Holding) system?

In accordance with Japan’s Financial Instruments and Exchange Act, those holding over 5% of a publicly listed company’s stock certificates or investment securities are required to disclose the status of shareholding by submitting reports to the Financial Services Agency. This system is called “Large Shareholding Report(Report of Possession of Large Volume / Report of Large Volume Holding) system”, or “Five Percent Rule”.

2. Who needs to submit the Large Shareholding Report? When the Large Shareholding Report should be submitted?

(1.) When a shareholder has newly acquired over 5% of the total amount of shares issued by a listed company in Japan.

(2.) After that, when the shareholder’s Ownership Ratio has increased or decreased 1% or more (The holdings of joint holders are included in this calculation(if any)), or other specific change occurs, such as change of business name, address, collateral agreement, etc.

Furthermore, the Large Shareholding Report(Reports of Possession of Large Volume) and Change Report must be submitted within five business days (excluding on Saturdays, Sundays and Japanese public holidays) from the date on which the reporting obligation arose. Exceeding deadline is violation of the Financial Instruments and Exchange Act.

3. Definition of Large Volume Shareholder

When a shareholder’s ownership ratio of shares issued by a publicly listed company exceeds 5%, the holder considered to be a Large Volume Shareholder who is obliged to submit a Large Shareholding Report(Reports of Possession of Large Volume).

4. Are the shares of joint shareholders included in the calculation?

The shareholdings held by joint shareholders must be included as well in the calculation of ownership ratio.

5. Who is a Joint Shareholder counted as?

There are two types of joint shareholders.

(1) Real Joint Shareholder

Persons who jointly acquire shares, transfer shares, or agree to exercise their voting and other rights.

(2) Deemed Joint Shareholder

Persons in the following relationships are also deemed to be joint shareholders.

• (a.) Marital relationship
• (b.) Relationship between a majority shareholder (who holds more than 50% of voting rights) and a controlled company
• (c.) Relationship between controlled companies that have the same controlling shareholder

6. Where to submit the Large Shareholding Report

7. How to submit the Large Shareholding Report

As from 1st April 2007, submission of the Large Shareholding Report(including Change Reports and Amendment Reports) through the EDINET (Electronic Disclosure for Investors’ NETwork) has become a legal obligation and also disclosure system on EDINET has been imposed on all the submitters.
At first, the Large volume holders who are obliged to submit the report have to obtain an EDINET CODE and create a EDINET account (supporting documents are required to send to the local finance bureau by mail), and then, submit a report in the specified format on the EDINET.

8. Penalty for reporting violations

A new surcharge system for the Large Shareholding Report (Report of Possession of Large Volume) system has been introduced under the Financial Instruments and Exchange Act.

(1.) The scope of the surcharge has been expanded. Under the new system, the following persons would be subject to the surcharge as well:

(A.) Those who do not submit the Large Shareholding Report
Persons who do not submit the Large Shareholding Report (Report of Possession of Large Volume) or Change Report, and Amendment Report of Large Shareholding Report by the deadline may be surcharged.

(B.) Those who make a false statement in the Large Shareholding Report
Persons submit an improper report may be surcharged, such as the following (a.), (b.), or (c.) reports with a false statement regarding important items, or without important items that should have been written.

• (a.) The Large Shareholding Report (Report of Possession of Large Volume),
• (b.) Change Report, or
• (c.) Amendment Report of Large Shareholding Report or Change Report

(2.) The amount of the surcharge will be one hundred thousandth of the total market value of the shares issued by the issuer of the share certificates and other securities that are subject to large shareholding reporting.

(For example, if the total market value of the shares issued by an issuer concerned is 1 trillion yen, the amount of the surcharge will be 10 million yen.)

(3.) Addition or reduction of surcharge

Under certain circumstances the amount of the surcharge would be reduced or added.

(a.) Reduction of the surcharge
obliged person The amount of the surcharge regarding the most recent violation will be halved in the case that the person obliged reports their own failure to submit the Large Shareholding Report to the Securities and Exchange Surveillance Commission before the authority orders the person to submit the reports or supporting documents or starts their investigation.

(b.) Addition of the surcharge
In the case that a person who has been subject to a surcharge within the last five years violates the law again, the amount of the surcharge is raised by 1.5 times.

9. Problems with submission of the Large Shareholding Report (Report of Possession of Large Volume)

The persons who are obliged to submit the Large Shareholding Report have to collect accurate and proper information within a short period, and create the report in required format by the law. These tasks are not easy to be carried out, however, those who violate the law by failure to submit the report would be imposed a high surcharge.

Quite a number of people wish they could submit paper-based reports rather than through the EDINET due to difficulties with user-unfriendly system and the digital divide. In addition, there is a Japanese-language barrier as well. English support for non-Japanese-speaking people is not available on EDINET, all submitters have to create and submit the reports written in Japanese. Unfortunately, neither paper-based reports nor reports written in languages other than Japanese are not accepted under the current law. EDINET is very unique and difficult to manage, however, it is unavoidable system when shareholders are obliged to submit the Large Shareholding Reports.

Even for people who are familiar with IT works and have plenty of knowledge about Japanese and computer languages and stock market, it is very difficult to submit the Large Shareholding Report within five business days, especially first time. There are some reasons for difficulties in submission of the report, for example, it usually takes two or three days to create an EDINET account which is necessary to submit the report, therefore the submitter has only two or three days left to familiarise themselves with the EDINET submission manual (which has several hundred pages), set up the EDINET system, make alterations to the report files, and submit the file in the specified format by the Financial Instruments and Exchange Law. If the created report contains only one error (even minor one), the EDINET rejects submission of the report, and the submitter would fail to complete their tasks by the deadline.

Persons who are obliged to submit the Large Shareholding Reports (the Report of Possession of Large Volume) have to learn about the EDINET system, and understand the Financial Instruments and Exchange Law within five business days, and there is no exception.

For persons who are only specialized in computer technology, accounting or data conversion and generation, it is also difficult to fulfill these requirements and complete the report submission.

We can carry out difficult EDINET tasks on behalf of our clients by using our plenty of know-how and expertise we have developed through a lot of experience.

For your reference: Financial Services Agency https://www.fsa.go.jp/en/index.html

Company profile

Data conversion service for various types of data

In order to comply with new laws and regulations, it has become necessary to convert documents that you used to create as Microsoft Word or PDF files to other formats such as XBRL, SGML and HTML. Horizon Data Works is a professional company with electronic document technology, providing specialised data conversion services. Our team has a lot of experience especially EDINET(Large Shareholding Reports) and medical leaflets. We offer our services at a clear and reasonable price, and swiftly respond to your requests at any time.

• High-quality data
• Quick delivery
• Attentive support
• Low-cost services

XML / SGML conversion service for medicine package inserts

We provides data conversion service, such as creating XML / SGML data files for medical equipment, medicinal products for in-vitro diagnostics, and drug package inserts for ethical pharmaceuticals. Furthermore, we can assist you to register these files (including image files and PDF data) on the website of the Pharmaceuticals and Medical Devices Agency (PMDA) in Japan.

Related services:

• XML and SGML conversion service for documents related to clinical trials and application documents
• Developing and marketing a program for the entry of survey slips after production and distribution

iXBRL (HTML) data conversion service for legal disclosure documents

We can support you in creating iXBRL data (body text and financial statement parts) for a variety of statutory disclosure statements which you are obliged to submit, such as securities report (for companies or funds) or the Large Shareholding Report(Report of Possession of Large Volume). Furthermore, we can assist you in submitting the reports on the EDINET which is the electronic disclosure system for securities reports and other disclosure reports and statements, based on the Financial Instruments and Exchange Act in Japan.

Related services:

• Development and marketing of iXBRL Creator, a tool for creating iXBRL and XHTML files for submission to EDINET
• A legal check of your statutory disclosure statements(performed by our affiliated lawyer)

Furthermore, we offer data conversion services for SGML, iXBRL, HTML and XML, as well as printing services. Please contact us for further information.

Company information:

Business name	Horizon Data Works Co., Ltd.
Date of Establishment	November 25, 2011
Capital	6,500,000 yen
Representative director	Tsutomu Koshimitsu
Headquarters	AIOS Gotanda Eki-mae 6F, Nishi-Gotanda 1-11-1, Shinagawa-ku, Tokyo 141-0031, Japan
Telephone number	+81 (0)3-5740-3980
FAX	+81 (0)3-5740-3981
Email