Against a background of the globalization of capital markets, the Japanese financial system underwent its deregulatory "Big Bang" in 1996. From the 1990s to the 2000s there was rapid and significant reform of a whole range of systems surrounding capital markets and disclosure. Many new start-ups wanted to launch IPOs. As a response to these needs, six new and emerging markets were created in Japan from 1999 onwards.
Revisions to both the Commercial Code and the Securities and Exchange Act came one after another, together with a series of significant reforms to both accounting standards and the disclosure system. Revisions to the Securities and Exchange Act resulted in changes to associated fields, including consolidated disclosure, cash flow accounting, current-value accounting and electronic disclosure. These changes culminated with the Financial Instruments and Exchange Act coming into force in 2007 which marked the beginning of quarterly legal disclosure, XBRL disclosure, and the use of internal control reporting systems in financial reporting.
In the years following 2001, significant revisions to areas relating to the Commercial Code resulted in deregulation to the unit share system and regulations covering share buy-backs. Corporate auditing systems were revised, and consolidated financial statements and electronic public notification systems were introduced. The Companies Act was enacted in 2006 as the culmination of these reforms to company legislation.
Furthermore, the digitization of stock certificates of listed companies began in January 2009. As a result, listed companies were required to comply with these new changes.
In response to these changes to legal systems, PRONEXUS set up a range of support services to offer clients accurate information on a timely basis and to enhance the legality and eligibility of disclosure documents. At present we have around 80 consulting staff who check texts prepared by clients and give advice on the preparation of disclosure documents, in accordance with the latest legal systems. They also supply case studies and relevant data to clients. Our Disclosure and Education Support Division publishes 85,000 copies of procedures and guidebooks in 38 categories related to disclosure. In addition to our existing practical seminars, we have expanded programs on finance and accounting, IFRS, legal, labor and tax affairs, as well as English-language documents used overseas. We hold over 1,000 seminars annually, which are attended by some 30,000 people.
We also have a dedicated website for members that provides the latest information about disclosure over the Internet, and we publish an e-mail magazine. These are examples of our ongoing efforts to deepen and expand our consulting services to optimize clients' work and make it more efficient.
"Big Bang" deregulation of Japan's financial markets and our response to major changes to the disclosure system
|1996||In the wake of the financial market Big Bang in Japan, capital markets expand and the reform of accounting and disclosure systems continues|
|2000||Major revision of the Securities and Exchange Act: consolidated disclosure, cash flow accounting, current-value accounting|
|2001||Start of electronic disclosure of securities reports via the EDINET|
|2003||Start of quarterly disclosure of earnings reports and electronic publication of financial notification|
|2004||Electronic disclosure of securities reports via the EDINET made mandatory|
|2007||The Financial Instruments and Exchange Act comes into force|
|2008||Introductions of quarterly legal disclosure, XBRL disclosure, and the use of internal control reporting ("J-SOX")|
|2014||Start of disclosure of securities reports via the new EDINET|
|2019||Start of disclosure of securities reports via the Next-generation EDINET|
Our responses to the overhaul of the Commercial Code, and subsequent Companies Act
|2001||Major revision of the Commercial Code: creation of the unit share system, deregulation of stock buy-back rules, amendments to the share system|
|2002||Strengthening of the functions of corporate auditors and revision of shareholder derivative actions|
|2005||Introduction of consolidated financial statements in convocation notices|
|2006||The Companies Act comes into force: systems to ensure appropriate company operation (internal control reporting), digitization of stock certificates, corporate governance, revision of organization design, defenses against hostile takeovers, etc.|