Press Conference by Taro Aso, Deputy Prime Minister, Minister of Finance, and Minister for Financial Services

(Excerpt)

(Tuesday, January 20, 2015, 11:04 am to 11:22 am)

[Questions and answers]

Q.

The Swiss National Bank has abandoned the Swiss franc ceiling, and this is impacting on the markets in what some are describing as the “Swiss shock.” As a result, Alpari, a forex trader based in the U.K., collapsed, and because the company has customers in Japan, their positions were closed out forcibly, so what is the Financial Services Agency (FSA) doing to protect the forex customers that are affected by this? Also, because the Swiss franc is a widely traded international currency, what is the FSA doing to mitigate the impact on the operations of Japanese forex traders and Japanese financial institutions?

A.

Regarding the bankruptcy proceedings for Alpari U.K. Limited in London, given that the parent company has entered bankruptcy proceedings, there is the question of what is going to happen to the assets of its subsidiary, Alpari Japan. Unless we do something to safeguard the assets of the forex customers, they might be affected. I understand that on Friday last week the company announced that it would stop accepting new transactions. In order to protect investors in Japan, the Kanto Local Finance Bureau issued orders to Alpari Japan to keep its assets in Japan and improve its operations in accordance with the Financial Instruments and Exchange Act. I think we still have to keep an eye on whether that will have a big impact. In Europe the euro fell and the Swiss franc soared, and this might affect individual foreign exchange trading houses in various ways, but I won’t comment here on the specific case of that company. However, within Japan, I think the impact will be fairly limited. I think that we will need to continue to keep a close eye on things like this in the future.

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