Summary of the application of the Article 63 Exemption for the offering of Limited Partnership Funds to Japan investors

The Article 63 Exemption is one of the most commonly used exemptions relied on by foreign and domestic fund managers in connection with capital raising activities of limited partnership funds to Japanese investors.

However, it is also one of the most frequently misunderstood exemptions due to its numerous nuances and complexities in application.

Speaking with fund managers, we note that there is a range of information as well as misinformation on this exemption across the Japan financial and legal markets regarding when a GP is required to operate under the Article 63 Exemption, and when this filing is not required (i.e., the “just in case” filing).

This Client Alert is both a summary of the black letter law of the Article 63 Exemption, as well as a practical overview of various issues and considerations we have seen in real-world scenarios.