Notice of the Deadline regarding the Professional Investors' System
Under the Financial Instruments and Exchange Act (hereinafter the ‘Law’), the Professional Investors’ System (hereinafter ‘System’) is stipulated and the System categorizes customers into Professional Investor or customers other than Professional Investor (hereinafter ‘General Investor’)”.
Under the System, if a customer is categorized as a Professional Investor, then some restrictions on financial instruments business operators with which Japan Hotel REIT Advisors Co., Ltd. (hereinafter "JHRA") should otherwise comply, including restrictions on advertising, etc. as well as obligations to deliver documents to customers prior to, and upon the conclusion of a contract will be excluded, because Professional Investor is considered that it can appropriately manage the risk related to financial transactions based on its status of knowledge, experience and property.
In addition, a customer who meets certain conditions may shift its status between the Professional Investor category and the “General Investor” for each type of a contract (defined in the Article 53 of Cabinet Office Ordinance on Financial Instruments Business, etc.) by completing the required application procedures and upon approval by JHRA.
In case the customer shift status from the General Investor category to the Professional Investor category
A customer categorized as General Investor may shift its status to the Professional Investor category by completing certain procedures. In this case, the maximum duration of shift to the Professional Investor category is one year, and in JHRA’s case, JHRA specifies June 30th of each year as the deadline for changing investor’s status under the System.
When JHRA conducts any acts based on the provisions of laws and regulations, or contracts regarding the contract (limited to an investment advisory contract or a discretionary investment contract), JHRA will treat a customer as Professional Investor only in the case that such acts are conducted before the deadline.
The customer will be automatically categorized as the General Investor on the day following the deadline aforesaid. A customer that wishes to maintain its status as Professional Investor must complete the necessary procedures. After the shift to the “Professional Investor” category, a customer may request at any time to be treated as General Investor again, and JHRA will treat the customer as General Investor from the date of approval by JHRA. If the customer has already requested to be treated as Professional Investor on the specified type of a financial instruments transaction contract, and submitted a written consent to JHRA, and has obtained JHRA’s approval, JHRA will treat the customer as Professional Investor through the effective term without receiving a new application for the same type of a new financial instruments transaction contract.
In case the customer shift status from the “Professional Investor” category to the General Investor category
A customer which may shift its status as Professional Investor to the General Investor may shift its category to General Investor by completing certain procedures. In this case, the deadline does not apply to the customer. The shift to General Investor will be maintained unless the customer request to be shifted back to Professional Investor (unless the customer becomes a qualified institutional investor). After shift to the General Investor category, a customer may request at any time to be treated as Professional Investor again, and if JHRA accepts the request, the effect of the shift to the General Investor will expire as of the acceptance. If the customer has already requested to be treated as General Investor on the specified type of a financial instruments transaction contract and accepted by JHRA, JHRA will treat the customer as General Investor without receiving a new request regarding the same type of a new financial instruments transaction contract.