Approval Obtained for a Plan for New Business Activities by Digital Securities Preparatory Co., Ltd.’s Subsidiary:
First Ever Completion of Digital Security Token Transactions through Tokenized Equity Investment in a Silent Partnership among Investors in Japan

Aug. 01, 2023
Marubeni Corporation
The Joyo Bank, Ltd.

On August 1, 2023, OwnerShip Co., Ltd. (hereinafter, “OS”), a system subsidiary company of Digital Securities Preparatory Co., Ltd. (hereinafter, “DS”), with investment from Marubeni Corporation (hereinafter, “Marubeni”) and The Joyo Bank, Ltd. (hereinafter, “Joyo Bank”)*1, obtained certification for a plan for new business activities related to the requirements for assignment of claims*2 utilizing blockchain technology (hereinafter, the “Certification”). This is the first time that certification for an initiative of this kind has been granted in Japan.

The Certification was obtained following the successful completion*3 of accreditation under the Testing of New Technology Demonstration Plan based on the Industrial Competitiveness Enhancement Act (the so-called “Regulatory Sandbox” system), which involved the use of blockchain technology for electronic transactions related to the requirement for perfection against third-parties opposition requirements. This test was conducted by the real estate STO fund*4, in which Marubeni and Joyo Bank participated as part of their business collaboration with DS.

Traditionally, in order to fulfill the third-party opposition requirements related to the trading of security tokens through tokenized equity investment in a silent partnership (hereinafter, “Silent Partnership ST”), it was necessary to give written notifications using an “instrument bearing a certified date,” which has to date led to bottlenecks in the process of issuing security tokens. Following the Certification, it will be possible to digitally complete all of the procedures (issuance, custody, sale, and secondary distribution) involved in Silent Partnership ST, via the “OwnerShip” security token trading platform developed independently by OS.

Through further business collaboration, Marubeni and Joyo Bank will continue to support the initiatives of DS in the security token market, which is expected to serve as a new investment vehicle for individuals. The market will achieve this by enabling individual investors to make small investments in assets that were previously inaccessible, to promote the “shift from savings to investment” policy being promoted by the Japanese government.

Approval Obtained for a Plan for New Business Activities and Acquisition of Patent by Digital Securities Preparatory Co., Ltd..
https://digitalsecurities.jp/?p=314 (Japanese language only)

*1 Joyo Bank completed its investment in DS through J-Raise Investment Limited Partnership, a Corporate Venture Capital (CVC) fund.

*2 Special Provisions for the Perfection Requirements for Assignment of Claims
This Special Provision under the Act to Partially Amend the Industrial Competitiveness Enhancement Act  (Act No. 70 of the 3rd year of Reiwa), stipulates that, when the notification of an assignment of claims is made using an information system provided by operators certified under a new business activity plan based on the Industrial Competitiveness Enhancement Act, such notification through the information system shall be considered equivalent to notification through a certified instrument bearing a certified date.

*3 Real Estate Security Token Offering (STO):
STO is a method of raising funds by electronically issuing “security tokens” (digital securities) using distributed ledger technologies, as exemplified by blockchain technologies. Real estate STOs are digital securities with the underlying asset of real estate or rights related to real estate. They are attracting attention as a next-generation financial product that differs from conventional real estate securitization products.

*4 Preparatory act for accreditation of the Testing of New Technology Demonstration Plan based on the Industrial Competitiveness Enhancement Act (the so-called “Regulatory Sandbox” system).
The Certification was granted on October 14, 2022:
https://www.cas.go.jp/jp/houdou/pdf/20221014_3shiryou1-1.pdf (Japanese language only)
Cabinet Secretariat Press Release on October 14, 2022:
https://www.cas.go.jp/jp/houdou/pdf/20221014_sandbox.pdf (Japanese language only)

Company Overview
Company Name: Digital Securities Preparatory Co., Ltd.
Established: November 12, 2020
Representative: Kohei Yamamoto (CEO)
Location: 4-15-1, Akasaka, Minato-ku, Tokyo 107-0052, Japan
Main Business: Preparing to launch Real Estate STO business
Website: https://digitalsecurities.jp
Company Name: OwnerShip Co., Ltd.
Established: October 1, 2021
Representative: Haruhiko Matsui (President)
Location: 4-15-1, Akasaka, Minato-ku, Tokyo 107-0052, Japan
Main Business: Developing and operating a security token system
Website: https://www.ownership.jp/
Name: Marubeni Corporation
Established: December 1, 1949
Representative: Masumi Kakinoki (President)
Location: 4-2, Ohtemachi 1-chome, Chiyoda-ku, Tokyo 100-8088, Japan
Website: https://www.marubeni.com/en/
Company Name: The Joyo Bank, Ltd.
Established: July 30, 1935
Representative: Tetsuya Akino (President)
Location: 5-5, Minami-machi 2-chome, Mito, Ibaraki 310-0021, Japan
Website: https://www.joyobank.co.jp/eng/

Related releases:
・Oct. 28, 2022
Investing in Digital Securities Preparatory Co., Ltd

・Dec. 19, 2022
Establishment of a Real Estate STO Fund for Tokenization of Silent Partnership Equity Interests