2006 amendments to the Trust Act

There had effectively been no amendments to the Trust Act for more than 80 years since its enactment in 1922. This Trust Act was designed with control features because of the unregulated establishment and unhealthy operation of minor trust companies at that time, and it focused largely on civil trusts (for example, administration of personal property).

However, the trust system has developed primarily through trust banks in the area of commercial trusts (for example, loan trusts and pension trusts), particularly since the end of World War II. Recently, there have been growing needs in the area of commercial trusts for new investments and financial schemes. Moreover, in the area of civil trusts, expectations have increased for family trusts for the purpose of guardianship asset administration and the succession of inheritance with the advent of the aging society.

The Trust Companies Association of Japan has for some time been particularly concerned about amendments to the Trust Act. We have held research seminars in conjunction with jurists who are very knowledgeable about trusts since the late 1980s. We have conducted research about arguments for legislation relating to the Commercial Trust, with those research results released as the Guidelines for the Commercial Trust at the conference of Japan Association of the Law of Trust in 2000. Beginning in 2002, we proposed revisions to trust related legislation to reflect the current needs of commercial use of trusts and submitted requests for regulatory reforms.

Under this background, the Japanese government has also considered amendments to and modernization of the Trust Act. As a result, the draft Trust Act and legislative bills were passed in December 2006 and enacted on September 30, 2007.

The draft amendments to the Trust Business Act in accordance with the enactment of the new Trust Act were also incorporated in the related legislative bills for the Trust Act, which were passed and enacted with the Trust Act.

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