Legislation intended to boost protection for general investors and put hedge and buyout funds operating in Japan under closer scrutiny will come into full effect Sunday.

Analysts, who generally welcome the Financial Instruments and Exchange Law, say it will accelerate a shift from savings to investments and enhance the quality of services in a country where the financial sector is becoming increasingly important as an engine of growth as the working population declines.

The law, upgrading the existing Securities and Exchange Law and bringing together other financial regulations, was passed in June 2006 following the discovery of a series of corporate accounting fraud and insider-trading cases. It has already been partly put into force.