Foreign securities houses will soon be able to enjoy remote membership of the Tokyo Stock Exchange (TSE), reports Bank of Tokyo Mitsubishi (BTM), citing a report in Nihon Keizai Shimbun. From as early as next year the Financial Services Agency (FSA) is expected to allow foreign securities houses to operate in Japan without a physical presence, says the newspaper.
“We assume that the aim of FSA is to lure more foreign funds into sluggish markets by removing the regulations that have hindered participation of foreign securities houses,” comments BTM. “To allow foreign securities houses without branches to operate in Japan, FSA will rectify the law that only requirement is to register the name of representative. On the other hand, FSA is thinking of setting the rules for a system of supervision for doubtful transactions in collaboration with its counterparts and exchanges overseas – amid concern that illegal trading might increase if the authorities admit the entries of securities houses that have no local branches without screening.”
BTM says the deregulation will benefit foreign investors. Setting up branches and operating in Japan is costly, and some foreign securities houses have pulled out of the market in recent years. Of 50 registered foreign securities houses in Japan, only around 20 actually participate in trading at TSE.