Press Conference by Tadahiro Matsushita, Minister for Financial Services
(Friday, July 13, 2012, from 9:37 a.m. to 9:44 a.m.)
[Opening Remarks by Minister Matsushita]
Yesterday, I visited the Tokyo Stock Exchange. As I told you in door-step conversations yesterday, I held various discussions.
At today's cabinet meeting, a cabinet order to partially amend the Order for Enforcement of the Insurance Business Act was formalized. This cabinet order specifies the matters announced on January 6 with regard to transitional measures that are included in the Act to Amend the Insurance Business Act, which was enacted in March 2012, and concern the amount of insurance claims that may be underwritten by small-amount, short-term insurance providers.
For the details, please consult the FSA staff.
[Questions & Answers]
I have two questions.
First, the Japanese Bankers Association (JBA) started considering revisions to the calculation method of TIBOR (Tokyo Interbank Offered Rate) following the scandal over the manipulation of LIBOR (London Interbank Offered Rate).
Regarding TIBOR, a foreign securities company's use of an illegal practice was exposed last year. What measures does the Financial Services Agency (FSA) intend to take to prevent illegal acts related to TIBOR and what are your thoughts on the unfolding LIBOR scandal?
As for the LIBOR scandal, we regard it as a very serious problem. We are keeping close watch on it.
As for your question concerning revisions to TIBOR, the JBA is responsible for determining the standard for managing TIBOR, so the FSA is not in a position to make comments.
I understand that in response to inquiries from media organizations, the JBA has replied that nothing has been decided with regard to revisions to TIBOR. I believe that it is important that the JBA, which is responsible for publishing TIBOR, take appropriate and timely actions regarding the management of TIBOR.
I think that the management of TIBOR and the illegal manipulation of interest rates are different matters.
The FSA has already been checking individual financial institutions' internal control systems through inspection and supervision. If a problem is recognized with regard to a financial institution's internal control system, we will take appropriate actions as needed.
I have one more question, which concerns insider trading related to public offerings of new shares. You have repeatedly expressed your intention to urge Nomura Securities and other securities companies acting as lead managers to exercise the self-purification capability. Specifically what actions do you expect them to take?
Basically, this problem boils down to the issue of corporate governance. Given that insider trading cases have repeatedly occurred, particularly at the three leading securities companies, we must assume that this has become a routine practice. Even though we recognize that the self-purification capability has been exercised to a certain degree as a result of the announcement of the results of internal investigations, we are strongly urging them to further exercise that capability under appropriate governance from the perspective of the public nature of their operations and the protection of investors. I still want them to do that.
In relation to the previous question, the FSA has ordered 12 securities companies to review their operations by August 3. If their reports include false statements, what actions will you take?
First of all, they will conduct the review. As we have ordered the review, we will make judgment after examining the review results. I cannot answer your question with any prejudgment.
May I take it that you will take strict actions if false statements are recognized?
False statements must not be tolerated, so we will strictly examine their reports.
Let me ask you about insider trading.
There have been many cases in which a hedge fund requested the provision of information from securities companies. The hedge fund in question is based abroad. In the investigation of the insider trading cases, what is the status of the FSA's cooperation with foreign authorities, particularly in Singapore, Hong Kong, London, and New York?
I would like to refrain from commenting on specific cases. Naturally, the FSA will cooperate with foreign authorities.
I have heard about an investigation into a hedge fund in Hong Kong. Do you have any information on that?
I do not have any information based on which I can make comments.
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