Press Conference by Ikko Nakatsuka, Minister for Financial Services

(Excerpt)

(Friday, October 26, 2012, from 10:56 a.m. to 11:06 a.m.)

[Questions & Answers]

Q.

This week, regarding the Securities and Exchange Surveillance Commission's (SESC's) recommendation related to a suspected case of insider trading of shares at system developer SJI, the Financial Services Agency refrained from taking administrative actions on the grounds that it has not recognized any violation of laws or regulations.

Could you explain this unusual decision and do you think that the SESC has conducted an adequate investigation?

A.

On October 23, the FSA announced that it has not recognized any violation of the Financial Instruments and Exchange Act.

As this is matter concerning a specific company, I would like to refrain from commenting on the details. I understand that the SESC appropriately exercises its investigative authority in accordance with laws and regulations in order to secure public interest, including the fairness of financial instruments transactions and protection of investors. In any case, I hope that the SESC will strive to ensure more appropriate enforcement.

Q.

I hear that this morning, Japan Post officials visited Minister for Postal Reform Shimoji to present the stock listing schedule. Did they visit you, too?

Also, will the FSA grant approval for new services that form the premise of the listing plan?

What is your thinking regarding the postal privatization committee judgment as to the approval of the new services?

A.

Regarding the disposal of shares, the FSA was notified and I heard about it from the FSA staff. I was not directly notified.

I would like to refrain from commenting on the details. In any case, procedures based on the Postal Service Privatization Act, as well as the Banking Act and the Insurance Business Act must be followed. We are now hearing from the postal privatization committee.

We are examining the applications in light of the Banking Act and the Insurance Business Act. All we can say is that we are following these various procedures quietly. As I always mention, we will decide whether to grant approval after examining the applications for a sufficient period of time.

Q.

What do you think of the fact that the listing plan was submitted on the premise of the approval of the new services?

A.

Generally speaking, it is required that Japan Post Holdings' voting rights share in the two financial institutions (Japan Post Bank and Japan Post Insurance) should be taken into consideration when deciding whether to approve new services. Therefore, it is important that the schedule of the disposal of shares should be presented. In any case, there is no change in our stance of deciding whether to grant approval after examining the applications for a sufficient period of time, as I mentioned earlier.

Q.

In relation to the previous question, a media report said that the two financial institutions will start providing housing loans from April, for example. Even though you say that the FSA is examining the applications in accordance with laws, Japan Post Holdings has presented its own schedule, creating the impression that the approval of the new services is a fait accompli. What is your impression?

A.

I do not have such an impression.

Q.

Let me make sure about this: may I take it that you do not think there is any correlation between the listing schedule of Japan Post Holdings and the approval of the new services?

A.

Under the relevant law - the Postal Service Privatization Act - it is required that Japan Post Holdings' voting rights share in the two financial institutions should be taken into consideration. Therefore, it is important for future examination of the applications that the schedule of the disposal of shares in the two financial institutions should be presented, as I mentioned earlier.

Q.

Forgive me for sticking with this point, but if looked from the other way, may I take it that unless the listing schedules of the two financial institutions are presented, approval cannot be granted?

A.

As I have been saying, all I can say is that we will examine the applications in accordance with the legally prescribed administrative procedures.

(End)

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