The Japanese regulator, the Financial Services Agency (FSA), has issued proposals designed to strengthen its surveillance of the securities industry.
According to a report in Nihon Keizai Shimbun on Thursday, the FSA wants to beef up the surveillance systems of the Securities and Exchange Surveillance Commission (SESC). SESC, which has so far confined its attentions to securities houses, is now likely to see fund managers, investment advisers, buy-out funds, and other special-purpose vehicles come within its remit.
“In addition to the inspection of unfair-trading, which has traditionally been the target of inspection by the regulators, the proposal also calls for the examination of the financial soundness of financial services companies,” says a spokesman for Bank of Tokyo Mitsubishi in Tokyo. “The purpose of the FSA proposal is to protect wide variety of investors while financial services have been diversified and complex financial transactions are being introduced in the market.”
The FSA is expected to establish a new department to run the intensified surveillance regime.
The strengthening of the role and functions of SESC was included in the revised Securities and Exchange Law, enacted during the previous Diet session. The FSA plans to seek an increase in staff numbers.