FINANCIAL SECTOR REFORM IN JAPAN: PROGRESS AND CHALLENGES
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• Expand range of business permitted securities subsidiaries and trust-banking subsidiaries
1997: All business except equities-related. 1999: Eliminate all regulations (Financial System Reform Law),
• Permit cross-sectoral competition between insurance companies and other financial institutions
1998: Entry of insurance companies into securities business and securities companies into insurance business accelerated (Insurance Business Law, Banking Law). 1999-2000: Entry of insurance companies into banking business (Financial System Reform Law). Entry of banks into insurance business.
8. Over-the-counter sale of insurance by banks
2001: Lift ban on handling of certain products,
9. Utilization of holding companies (HCs)
1997: Enacted two laws on HCs.
Create Efficient Markets 1. Improve exchange trading and review exchange market operations
1997-98: Improved trading systems within the exchange. Formulate merger rules for securities exchanges (Securities and Exchange Law). 1999: Improvement of trading systems within the exchange for amortization of company's own stock.
2. Abolish requirement of consolidation of orderflow for listed securities
1998: Abolish the requirement of consolidation of order-flow for listed securities—formulate fair trading rules (Securities and Exchange Law).
3. Strengthen the functions of the registered overthe-counter market
1998: Securities and Exchange Law
4. Deregulate unlisted and unregistered equities market
1998: Securities and Exchange Law
5. Create share-lending system
1998: Review rules on margin rates (Securities and Exchange Law), Formulate rules for share lending. (Appendix continues on the following page)
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