Press Conference by SUZUKI Shunichi, Minister of Finance and Minister of State for Financial Services

(Excerpt)

(Friday, February 2, 2024, 9:31 am to 9:41 am)

Q.

I would like to ask one question about the NISA’s Tsumitate Quota of periodic investments. Investment trusts for all-country world equity seem to be popular, but I take a few risks to use Indian equity for periodic investments. Indian equity attracts public attention and is popular in the asset management community, too, and up to last year, many funds had been created, but for the Tsumitate Quota, only one fund can be chosen. I assume that it has taken over the previous NISA selection standards for periodic investments, but why are there only a few funds that target India and other developing countries though they are of the same equity-indexed type as S&P and their trust fees are low? I understand that strict standards are needed, but I think that it is better for individual investors that a wider range of options are available so that they can invest in equity-indexed funds in India, Vietnam, and other countries that are expected to grow. What is your thoughts on this?

A.

The standards for periodic investment products of the Tsumitate Quota is applied as pointed out now have been established from the viewpoint of promoting distributed, long-term periodic investments starting from small amounts in order to support stable asset building in household finances.
The NISA program should be based on investment trusts which, in addition to keeping trust fees low, use equity indices that widely cover the entire market and have already spread among market watchers, and based on this policy, specific requirements have been stipulated in cabinet orders and other guidelines, and investment trusts that meet these requirements can be offered as periodic investment products of the Tsumitate Quota.
The Financial Services Agency (FSA) does not exclude equity-indexed funds in emerging economies, and actually, there are investment funds targeted for investment in emerging economies which are notified and offered as periodic investment products to the Tsumitate Quota. The number of such funds is small because the number of funds so notified is small.
The FSA believes that it is important that products suitable for stable asset building are provided in line with customer needs and hopes that securities firms and other financial institutions will develop and offer products that meet customer needs taking into account the purpose and nature of the Tsumitate Quota.

Q.

My question concerns the new NISA program, and one month has passed since the new NISA program started. Please tell us about the challenges that have emerged when evaluating the new NISA program, if any. A look at the amount of money that has flowed into investment trusts indicates that as published by businesses, products named “all-country world equity” or “U.S. equity” represent a large percentage of investment trusts. Please also tell us about your thoughts on the flow of funds into overseas equity as major stock indices in Japan reach the highest level since the collapse of the bubble economy. 

A.

One month has passed since the new NISA program started. We are sensing a good response, but the FSA will strive to promote the NISA program so that it can be utilized by a wide range of people as a stable means of asset building.
And an extremely large number of people participated in the NISA-related events hosted by the FSA during the period from the end of last year to early this year. We also hear from financial institutions that an increasing number of customers have opened a new NISA account since last year. In that context, I, too, feel that the launch of the new NISA program is leading people to become even more interested in asset building, and through such a trend, I myself am sensing a good response to the new program.
The FSA will continue to create an environment in which people can work for asset building with a sense of security mainly by promoting the spread and utilization of the new NISA program, enriching training in finance and economics to enable people to attain financial literacy, and ensuring that financial institutions pursue customer-oriented operation so that customers can feel safe when buying financial products.