Press Conference by Shozaburo Jimi, Minister for Financial Services

(Excerpt)

(Tuesday, February 7, 2012, from 8:37 a.m. to 8:42 a.m.)

[Questions & Answers]

Q.

First, I would like to ask you two questions.

My first question concerns the system glitch that occurred at the Tokyo Stock Exchange (TSE) last week. I presume that the TSE's investigation has made progress over the weekend. What is the current situation and the cause of the glitch as you understand it? Also, could you tell me about your present stance on future administrative actions?

A.

I would like to refrain from commenting on specific administrative actions. Last Thursday, February 2, Financial Services Agency (FSA) Commissioner Ryutaro Hatanaka ordered TSE President Saito, based on Article 151 of the Financial Instruments and Exchange Act, to submit a report after examining the cause of the system glitch and drawing up measures to prevent its recurrence. We will continue to carefully monitor the situation.

Q.

I will move on to my second question. Late last week, the Swiss competition policy authorities (anti-monopoly authorities) announced the start of an investigation into the case of interest rate manipulation related to LIBOR (London Interbank Offered Rate) and TIBOR (Tokyo Interbank Offered Rate). Among the banks targeted by this investigation are three Japanese banks. In light of that, how does the FSA view this case?

A.

I am aware of media reports about the case that you mentioned, but I would like to refrain from commenting on the activities of foreign authorities.

Q.

Yesterday, a system glitch occurred at SMBC Nikko Securities. Have you received any report on that and are you considering taking any action?

A.

I was told that that system glitch has already been resolved. The FSA will monitor the company's efforts to prevent any recurrence.

Q.

Haven't you yet received an interim report from the TSE on the cause of the system glitch and its measures to prevent a recurrence? Also, do you intend to ask exchanges in general to take any particular measures in the future?

A.

Generally speaking, an appropriate deadline is set for the mandatory submission of a report in accordance with the nature of the relevant problem. However, I would like to refrain from commenting on the details of a specific order for the submission of a report.

As I already mentioned, last Thursday, February 2, FSA Commissioner Ryutaro Hatanaka summoned TSE President Saito and ordered him, based on Article 151 of the Financial Instruments and Exchange Act, to submit a report after examining the cause and drawing up measures to prevent the recurrence of a system glitch. We will continue to carefully monitor the situation.

Q.

How serious do you think the system glitch at SMBC Nikko Securities is?

A.

Even though the system has been quickly restored to normal operation, system glitches should not occur at financial institutions in principle, so I will keep close watch on that.

Q.

The FSA conducted across-the-board inspection into examine system risks at deposit-taking financial institutions. Do you have an intention to conduct similar inspection regarding securities companies?

A.

Nothing has been decided regarding securities companies.

Thank you very much.

(End)