The Financial Services Agency plans to allow individuals and nonfinancial firms to register to set up trust companies with limited operations.
A copy of the outline of a bill to revise the Trust Business Law obtained Thursday by Kyodo News shows that the legislation would expand the scope of trust operations to include the handling by trust firms of patent and other types of intellectual properties.
The revision, the first since the creation of the 1922 law, is designed to allow individuals and nonfinancial companies to raise funds and manage assets with a variety of trust products.
Under the current system, trust operations are restricted to the management of such financial instruments as cash, securities and real estate. Only financial institutions are permitted to engage in the trust business under a license system.
The revision would maintain a license system for trust companies that provide a full range of trust services, and introduce a registration system for companies that only manage and dispose of assets in trust at the request of entrusters, the outline shows.
The registration would be renewed every three years.
The revised law would limit trust companies to those under stock ownership in principle. Legal experts said they expect both nonfinancial and startup companies to set up trust companies to raise funds with intellectual property rights and sales credits.
It would also allow big firms to form trust firms to manage in-house intellectual property rights with registration.
The revised law would also permit individuals and corporations to establish trust sales agents, and retail outlets to sell securitized trust assets only after registration.