The Association of Tokyo Stock Exchange Regular Members (ATSERM), a securities industry group in Japan, has decided to shake up its organisation and ambitions after losing a number of members, and especially foreign members.
One Tokyo-based observer says the defecting members were “exasperated by its ambiguous raison d’etre, poor cost-effectiveness to membership fees, and the near-zero speed in shake up talks among the three industry groups – the Japan Securities Dealers Association (JSDA), the Tokyo Stock Exchange and the ATSERM.”
Since September, nine members have resigned, reducing the total membership from 107 to 98. As the ATSERM relies on membership fees for revenue, the 2004 budget has fallen by more than 20 per cent.
In a reform plan published on Tuesday, ATSERM says it aims to transform itself from what an observer calls a “cosy industry salon” into a lobbying association for the Japanese securities industry. In a press conference, the chairman of the ATSERM cited the possibility of a merger with the Japan Securities Dealers Association (JSDA), which operates the JASDAQ over-the-counter market.
A voluntary organization created in 1957, ATSERM has functioned chiefly as a conduit for political donations from the securities industry to the ruling Liberal Democrat party. However, members have lost confidence in the efficacy of political contributions, and the chairman of the ATSERM himself admits “the reality is awareness of the ATSERM’s donations, let alone ATSERM itself, is minuscule among policymakers.”
Another complaint from non-resident members is that their say was not proportionate to their membership fees. They account for 35 per cent to the total membership fees, while major domestic institutions account for 25 per cent. Industry insiders agree ATSERM is controlled by small and medium-sized brokerages.
The reorganisation of ATSERM may chime well with JSDA plans to restructure itself to combine promotional activities with self-regulation of the securities market.