Comparative Studies on Investor’s Remedies
of Corporation-Type and Trust-Type Vehicles
for Collective Investment and AssetSecuritization
Motoaki Tazawa（Meijigakuin University）

The essential character of the organization law is not a legal
personality but a function of asset partitioning. Because of thisfunction, trust is used as a vehicle for collective investment and asset
securitization, although it does not have a legal personality.
Investment Trust and Investment Corporation Act（ITICA）
and Asset Securitization Act（ASA）provide two types of vehicle,
i.e. a corporation-type and a trust-type. These two types of vehicle
are designed as functional equivalents. However, there are somedifferences and this paper examines following three points: duty ofcare, liability for damages and injunction.
From the viewpoint of protection of investors, it is desirable
that a person in the fiduciary status shall owe a duty of care toinvestors. ITICA and SAS prescribe the mandatory provisions of aduty of care of directors of corporation-type vehicles and a trustee ofasset securitization. But ITICA does not prescribe such mandatory
provisions applicable to a trustee of an investment trust and itsinvestment manager, and general rules of Trust Act and Civil Code,i.e. the discretionary provisions of a duty of care apply to them. They
are subject to administrative regulations of Trust Business Act
and Financial Instruments and Exchange Act. These Acts impose
the mandatory provisions of a duty of care on them as a business― 157 ―

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regulation. Generally speaking, breach of business regulation cannot bea cause of private action but a cause of regulatory sanction, however,in this case it should be a cause of private action.
Companies Act prescribes the provisions of liability of directors toa third party for damages, and prevailing interpretation is that“a thirdparty”does include a creditor who suffers from indirect damages,
which mean damages caused by decrease of company’s assets, but notinclude a shareholder suffering from indirect damages. Although thesame liability rule applies to directors of corporation-type vehicles, theinterpretation of“a third party”may be different.
ITICA treats an investment management corporation as a directorof an investment corporation in respect of the liability rules, and in thiscase“a third party”should be interpreted to include a shareholder of
an investment corporation suffering from indirect damages. The reasonof this interpretation is to provide a shareholder of an investment
corporation with a protection equal to that of a beneficiary of aninvestment trust. An investment manager of an investment trust owes
liability for indirect damages, which mean decrease of trust assets, to abeneficiary of an investment trust under ITICA.
Legal status of a creditor of a special purpose company is very
similar to that of a shareholder of it under SAS, so that a creditor
should be treated the same as a shareholder when applying theliability rules of a director to a third party.
Lastly, concerning the right to demand an injunction, SAS adopts
an unique system in a special purpose trust that the right to demand
an injunction can be exercised not by each individual beneficiary
but by a representative beneficiary. Under this system, the rightto demand an injunction of a beneficiary is substantially subject tothe same requirements of the right to demand an injunction of ashareholder of a special purpose company.
― 158 ―