Japanese Financial Services Agency plans to relax approval procedures for Exchange Traded Funds in bid to facilitate the creation of new ETF products that track the performance of stock market indices.
Under the current structure, the procedures take some time until final approval is granted, as the commissioner of JFSA has to give approval on individual ETF basis. By relaxing the approval procedures and thereby greatly shortening the time taken for approval, JFSA aims to further activate ETF market with a wide range of products.
Along with the designation from JFSA, tax-related procedures are also required so that it would normally take a few months for the whole completion of designation/approval procedures. JFSA is currently proposing to remove tax-related procedures appertaining to ETF designations in the proposals for Fiscal Year 2008 tax reform. If approved, the time taken for ETF approval will be substantially shortened.
Presently, 11 kinds of indices are designated for ETFs under the Securities Investment Trust Law. As part of policies that aims to strengthen global competitiveness of the Tokyo Market, Financial System Council, an advisory panel to the prime minister, recently spelled out a plan to widen the range of listed products in the Exchanges.