Press Conference by the Minister for Financial Services

(Excerpt)

10 August, 2001

Q.

The ''Program for Structural Reform of Securities Markets'' was announced the other day, do you have any additional comments as to its purpose and so on?

A.

First of all, this is a comprehensive package, in which we have brought up almost every major issue which needs to be addressed and reformed as the structural reform of securities markets. I'm sure you can readily understand this point.

Regarding time schedule of the implementation of the program, even without being told to do so, we intended to carry out whatever measures which need to be done at each step. Among others, it is the tax system that calls for extensive coordination among various authorities concerned.

Regarding tax system, we have, of course, made requests about stock transactions, but as you know, we have also brought up an issue of bringing the tax treatment of the investment trusts which invest a certain percentage of their assets in stock closer to the tax treatment of stock transactions, rather than treating them more or less like deposits as in the past, and accordingly we requested such treatment.

We want to attract more individual investors into stock markets and have individual investors access stock markets more frequently. Rather than starting with specific stocks and starting transactions of specific stocks, in view of the results of various public opinion polls and questionnaire surveys, we think it would be after all more practical for them to enter the markets through investment trusts, to encourage investment in investment trusts, rather than to reach that stage in one stride. Our view is that investment trusts are more important in terms of attracting new individual investors into capital markets, and based on this view, we have requested a review of the tax system on investment trusts.

The tax system on investment trusts is certainly difficult to tackle, but as there seems to be some room for bringing forward the deliberations of certain issues, we hope that such deliberations would be furthered and deepened by all means so that we can achieve concrete results. If I may say so, we would like to obtain your cooperation so that our requests may be realized.

Q.

You are going to visit England and the United States in early September. Will you tell us the purpose of this visit and whom you plan to meet at this stage.

A.

Most importantly, we will explain what the financial administration in Japan is doing and how we view the current status of financial markets in Japan and the current position of the financial institutions. By offering explanations directly from me, I would like to deepen the understanding of the international financial circles. This is by far the most important agenda.

Secondly, we have been extended an invitation to visit England for a long time, and we have decided to accept this invitation this time. Among others, we will visit the UK FSA. In Japan, I hear of an argument which appears to call for or lead to segmentation of a financial regulatory body, in other words division of such a body up into administrative units in accordance with respective financial business operations such as banking, securities, and insurance. However, we have employed an integrated regulatory approach to financial services including those by conglomerates, considering it to be effective. Therefore, I would like to exchange views with the UK who has adopted a similar approach to ours. Furthermore, depending on situations, I wish to have talks with the officials of the SEC of the United States. In particular, the basic regulatory stance of the U.S. government on the securities markets contrasts sharply with that of Japan, and I want to have talks about this point. This, I would say, is the second purpose of my visit.