M&A Intermediary Association changes its name to the new organization name “M&A Support Institutions Association”
*M&A Intermediary Association, General Incorporated Association* Press release: September 19, 2024
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M&A Intermediary Association changes its name to the new organization name “M&A Support Institutions Association”
*-Strengthening the system and becoming an effective self-regulatory organization-*
The M&A Intermediary Association (hereinafter referred to as the Association), a self-regulatory organization for the M&A intermediary industry, / Location: Chiyoda-ku, Tokyo / Representative Director Kunihiko Arai / URL:
https://www.ma-chukai.or.jp/
) will change its name to the “M&A Support Organizations Association” from January 1, 2025. At the same time, we will change our system and accelerate efforts to restore the health of the industry, including efforts to eradicate malicious transferee businesses.
* Overview of organization name and structure changes *
*New organization name: Association of M&A Support Organizations* *Date of change: January 1, 2025*
*1 “M&A intermediary business” We act as both the transferor and receiver, selecting the other party, negotiating, and providing financial advice.
*2 “FA” (Financial Advisor)
In M&A, we take the position of either the transferor or receiver and provide advice on the selection of the other party, negotiations, and financial matters.
*3 “M&A Platformer” Refers to a platform-type service that matches transferors and transferees online to proceed with M&A.
* Background of the change in organization name and structure and future activity policy *
Our association promotes fair and smooth M&A transactions based on the “Small and Medium Enterprise M&A Promotion Plan” compiled by the Small and Medium Enterprise Agency to promote M&A among small and
medium-sized enterprises.
It was established in October 2021 with the purpose of working towards the healthy development of the brokerage industry.
In January 2024, we defined the ideal state of the M&A brokerage industry as a code of ethics, and formulated and implemented self-regulatory rules in three important areas of M&A support: advertising and sales, compliance, and explanation of important contract matters. Furthermore, from October 2024, we plan to begin operating a “Specified Business Operator List” to share information on malicious transferee businesses within the industry.
Recently, as awareness of small and medium-sized M&As and the number of deals have expanded, and the number of businesses supporting them has increased, there have been cases of false solicitations, aggressive sales methods, complaints about business quality, and malicious transferee businesses*4 by transferee managers. Cases of damage have been confirmed.
Our association aims to eradicate these inappropriate sales methods and raise the level of business quality, as well as eliminate malicious acquirers from the small and medium-sized M&A industry, and establish a system to become a more open and effective self-regulatory organization. We have decided to strengthen the. By changing the name to “Association of M&A Support Institutions,” and expanding membership to include FAs (financial advisors) and M&A platformers, we will collaborate not only with M&A intermediaries but also with all M&A support institutions. We aim to contribute to the development of Japanese small and medium-sized enterprises. In addition, in addition to inviting a wide range of experts from regional financial
institutions, FA, professional industries, etc. to serve as directors, we will establish committees and subcommittees within the association, such as the Self-Regulatory Rules Review Committee, to strengthen practical aspects, and We will strengthen governance by having people from corporate organizations serve on each committee.
*4
Transferee business owners acquire management rights without canceling the transferor’s manager’s guarantee, then take the target company’s cash and other assets, and either leave the target company alone or disappear.
*Main measures*
■* Qualification system to improve the service level of M&A support organizations*
* -Improve the effectiveness of self-regulatory rules and improve the quality of operations of M&A brokerage companies-*
In order to improve the service level of M&A support organizations, we will establish a qualification system review committee in January 2025 and proceed with the creation of our association’s own qualification system for M&A advisors. This qualification system will improve the quality and morale of M&A advisors’ work in terms of finance, legal and tax matters, increase the effectiveness and enforcement of self-regulatory rules, prevent conflicts of interest, and provide high quality customer-oriented services. The purpose is to develop professional awareness.
* ■Revision of self-regulatory rules “Rules for explanation of important contract matters” (enforced on September 1, 2024) * * -Prevention of conflicts of interest and disclosure of fee standards-* M&A intermediaries are required to explain the fees they receive from both the transferor and transferee, and when increasing fees after a contract is signed, they are required to explain this to the other party and confirm it in writing. By increasing the transferee company’s brokerage fees, the aim is to prevent conflicts of interest, such as reducing the transfer amount that the transferor company should have received.
* ■Revision of self-regulatory rules “Advertising and Sales
Regulations” (enforced on January 1, 2025) *
* -Preventing damage caused by malicious transferee businesses-* The self-regulatory rules “Advertisement and Sales Regulations” have been revised to add an obligation to provide explanations regarding risks after the completion of an M&A, and a provision obligating the transferred business operator to cancel the manager’s guarantee when drafting the final contract. It also stipulates the obligation to include drafts and conduct an investigation into the financial resources of the recipient business.
* ■Start of operation of “Specified Business Operator List” (starting operation on October 1, 2024) – Elimination of malicious transferee businesses – *
On October 1, 2024, we will begin operating a “Specified Business Operator List” to register malicious transferee businesses and share them within the industry.
* ・“Specified business operator list sharing member” *
It will be operated by members of our association who have agreed to share the list and are ready to do so based on their contract*5. *5 M&A contracts involve confidentiality obligations, so in order for members to report the reasons for reporting to the association, it is essential to revise each company’s NDA (non-disclosure agreement). * ・Reasons for reporting to the association (cases in which co-members are obligated to report) *
1.Delaying warranty cancellation for more than 6 months
2. If the reason for violating the Unfair Competition Prevention Act or confidentiality obligation remains unresolved for 4 months. If a joint member becomes aware of any of the above reasons, he or she will report it to the Association.
When our association receives a report from a shared member or a news report about the reason for the report, we will conduct an
investigation and consider and decide whether or not to register it on the list. In addition, joint members will be able to check whether they are registered on the specified business operator list when concluding a contract with a transferee business in the future. In effect, malicious transferee businesses will be shut out of the M&A market.
Reference: Published on August 26, 2024
M&A Intermediary Association strengthens efforts to prevent unfair M&A transactions – Starts operation of “Specified Business Operator List” for the purpose of sharing information on malicious transferee businesses –
* [M&A Intermediary Association Overview] *
Name: General Incorporated Association M&A Intermediary Association English name: M&A Intermediaries Association (MAIA)
Establishment date: October 1, 2021
board member:
-Representative Director-
Kunihiko Arai (Strike Co., Ltd.)
-director-
Ryosuke Kubo (ONDEC Co., Ltd.)
Shunsaku Sagami (M&A Research Institute Co., Ltd.)
Yasuto Shinoda (Meinan M&A Co., Ltd.)
Satoru Nakamura (M&A Capital Partners Co., Ltd.)
Takashi Miyake (Japan M&A Center Co., Ltd.)
-Auditor-
Attorney Yutaro Kikuchi (Kikuchi Sogo Law Office)
Location: 20th floor, Marunouchi Trust Tower Main Building, 1-8-3 Marunouchi, Chiyoda-ku, Tokyo
URL: https://www.ma-chukai.or.jp/
Inquiries: info@ma-chukai.or.jp