Guidelines

Oath of compliance with small and medium-sized corporate transaction M&A guidelines

Pledge of compliance with the small and medium-sized corporate transaction M&A Guidelines

In providing M&A advisory services to small and medium-sized corporate (SME) customers, we hereby pledge to comply with the following in accordance with the ‘SME M&A Guidelines’ formulated by the Small and Medium Enterprise Agency in March 2020.

1. Conclude FA contracts with SME customers that are consistent with the actual type of business and provide clear explanations to customers on important matters relating to the FA contract before the contract is concluded, to gain their understanding. The following points are particularly important:
   1. The difference between an intermediary who concludes a contract with both the seller and the buyer and advises both parties, and an FA who concludes a contract with only one party and advises only one party, and the characteristics of each. 
   2. Scope and content of services provided (up to matching, valuations, negotiations, scheme planning, etc.).
   3. Matters relating to fees (calculation criteria, amount, timing of payment, etc.)
   4. Matters relating to confidentiality (facts subject to confidentiality, partial termination of confidentiality obligations for professionals and other experts, etc.)
   5. Exclusivity clauses (e.g. availability of second opinions)
   6. Tail clauses (tail period, targeted M&A, etc.)
   7. Contract term
   8. If the customer specifies that the FA contract can be terminated mid-term, matters relating to such mid-term termination.
2. Encourage customers to reconfirm the conclusion of the final contract to ensure that there are no omissions in the contractual details.
3. With regard to the closing, the specific arrangements for the closing are put in place to ensure that the consideration for the transfer is received by the buyer on the day of the closing.
4. Act in accordance with the dedicated clauses, in particular in compliance with the following points:
   1. If the customer makes clear to the FA the areas in which they wish to seek opinions from other support organisations, and if there are no reasonable grounds for preventing this, the customer is allowed to seek second opinions from such organisations. However, consideration will be given to information management, such as prohibiting the disclosure of information on the other party, or limiting the consultation to those who are legally or contractually obliged to maintain confidentiality, or to public institutions such as the business succession and succession support centre.
   2. If a dedicated clause is provided, the contract term should be defined as a maximum of six months to one year. This does not apply if the customer wishes to have a contract term longer than one year or if there are reasonable grounds for stipulating a contract term longer than one year.
   3. Clauses, etc. (including verbal clarifications) stating that the customer can terminate the FA contract at any point in time.
5. Act in accordance with the Tail Clause, in particular by adhering to the following points:
   1. The maximum tail period should not exceed two to three years.
   2. Tail clauses shall be limited to only those counterparties with whom the customer has had involvement or contact during the provision of the Firm’s services.
   3. In addition to the above, AIBJ will act in accordance with the objectives of the Guidelines for Small and Medium-sized M&A transactions.

For an overview of the SME M&A guidelines, please use the URL below.
https://ma-shienkikan.go.jp/documents/ma-guideline-20200331001-2.pdf