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Japanese FSA getting more aggressive in the wake of multiple issues

This week the Japanese Securities and Exchange Surveillance Commission reportedly issued a fine against NY broker dealer, First New York Securities, for insider dealing. 

During a recent visit for the AIMA Japan annual conference various market participants were talking to us about rumours of another foreign financial firm that is thought to be the subject of an insider dealing inquiry.  It will be interesting to see what develops here.

The Japanese FSA has faced considerable domestic pressure from the scandals involving both Olympus and AIJ.  In addition to these two headline issues, the FSA has for the last few years been taking an increasingly strong stance towards issues of market misconduct.

The Oasis case that the SFC took action over was the result of considerable close co-operation between the HK SFC and the Japanese authorities.

We expect to see more headlines out of Japan as the regulator seeks to assuage public concerns about the operation of the domestic financial markets. 

From an industry standpoint the AIJ scandal is going to make capital raising from Japanese institutions a lot more difficult than it has been. 

On the positive side, the current debate about the importance of better corporate governance and respect for shareholder rights in Japan may ultimately start the process of bringing greater Japanese retail participation to the equity markets.  However this will not be a quick process.


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