Japan Industries Divided over Comprehensive Market Plan

Tokyo, June 30 (Jiji Press)--Japan's industries are divided over a
government plan to launch a comprehensive financial exchange by fiscal 2013
that will allow investors to trade in securities as well as commodities.
The plan, which would lead to a realignment of stock and commodity
exchanges, is good news for the commodity trading industry, which has seen
the number of investors plunge due to tighter regulations.
"An alliance with the securities industry would allow commodity
traders to boost waning performances," an official of the Japan Commodity
Futures Industry Association said.
The establishment of a comprehensive exchange would attract
investor attention back to shrinking commodity futures trading, traders
hope.
The Osaka Securities Exchange, which supports an alliance with
commodity exchanges, welcomes the government plan. A senior OSE official
said that the move would help improve investor convenience.
But a senior official of the Tokyo Stock Exchange, Japan's top
exchange, voiced concern about the government playing a leading role in the
realignment involving the TSE and OSE, now run as private companies.
"The government-led initiative to bail out slumping commodity
exchanges would simply put unnecessary financial burden on the TSE," the
official said.
The government plans to set up a team within the National Policy
Unit to discuss details of the plan.
Participants will include officials from the Financial Services
Agency, the Economy, Trade and Industry Ministry and the Agriculture,
Forestry and Fisheries Ministry.
Currently, the FSA oversees securities exchanges, while the
agricultural and trade ministries monitor commodities exchanges.
Although the government hammered out the comprehensive exchange
plan in its latest growth strategy, it has so far failed to set out details
of the plan due to difficulty coordinating opinions between the regulatory
bodies.
The government ministries and agency should discuss not only how
best to establish the new market but comprehensive ways to revitalize the
country's financial markets, including a legal framework to promote new
product development as well as tax breaks, critics said.