The House of Councilors on Friday enacted a law to promote "crowdfunding" in Japan so startup companies can more easily sell unlisted shares over the Internet to raise funds.

The bill revises the Financial Instruments and Exchange Law to lower the minimum capital amount to ¥10 million from ¥50 million for entities that can broker unlisted shares in startups for crowdfunding.

The bill limits an investor's investment in a startup to ¥500,000 to prevent excessive investment in the high-risk companies. It also reduces information disclosure and other burdens on companies issuing unlisted shares. The documents needed for listing shares will be simplified to encourage startups to list on stock exchanges.

During deliberations on the revision, the relevant Diet committees adopted a resolution urging the Financial Services Agency to appropriately supervise brokerages and warn investors to help prevent fraudulent sales of unlisted shares. The agency will reflect the resolution in future ordinances and regulations.