[Hot Picks from the Financial World]

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We deliver the hottest information of the times in this section, selected from among questions and answers given at the Minister's press conferences etc. If you wish to find out more, we invite you to visit the "Press Conferences" section of Financial Services Agency's website.

Q:     What are your thoughts on the meaning or purpose of the Financial Instruments and Exchange Law (what is called the Investment Services Law) that received Cabinet approval today?

A:		The Financial Instruments and Exchange Law was approved as an amendment to the Securities and Exchange Law because we have reached the stage where the fast-growing variety of financial products available, aside from securities, necessitates the establishment of regulations for a range of financial products, as well as regulations across the financial industry overall. There are two important points to the Financial Instruments and Exchange Law. The first is that it is structured to ensure fair trading. The second is that it contains comprehensive regulations on information disclosure so that investors can make decisions based on accurate facts. I think that these two points probably capture the essence of the law, but its ultimate aim is to promote the growth of the market and protect investors by extending the scope of general regulations to so-called financial products in order to combat the expected rise in foreign exchange margin transactions and other types of transactions which were unheard of a decade ago.
(from the press conference following a cabinet meeting on friday, March 10, 2006)

Q:     The Tokyo Stock Exchange has delisted Livedoor following filing of a criminal complaint against former executives of Livedoor including Takafumi Horie, the former President, by the Securities and Exchange Surveillance Commission. While the impact on investors is likely to be huge, please outline your views on the lessons this incident had for the market as well as the challenges it presents for the market's future administration.

A:		The actions of the accused in the Livedoor incident are typical examples of Securities and Exchange Law violations. Spreading rumors, carrying out fraudulent accounting and, as is in this case, doctoring financial statements are all typical breaches of the Securities and Exchange Law that have occurred in the past. I, therefore, do not believe that the actions of the accused constitute a new type of crime. In any case, we have asked the courts to try the case, and we will receive a verdict at some point in the future. I believe the Livedoor incident has been taken as a social warning to listed companies that issue stock, as well as securities companies, the Tokyo Stock Exchange, auditing companies and general investors that trading must take place according to the rules.
(from the press conference following a cabinet meeting on Tsuesday, March 14, 2006)

Q:     What is your view on the series of misstatements discovered in the descriptions of installment plan insurance products made by insurance companies?

A:		These misstatements were probably not intentionally made. Instead, they probably resulted from a series of unfortunate events, such as mistakes made in writing the policy clauses or explaining the products, as well as lack of understanding on the part of the sales people. Nevertheless, I believe that the insurance companies concerned must be prepared to take adequate measures to compensate policy holders for the trouble caused.
(from the press conference following a cabinet meeting on Tsuesday, March 14, 2006)
A:		There were expressions identified in an individual case that could have made the policyholder mistake the assumed rate of interest for the fixed rate of interest. Further investigation revealed that such expressions were broadly being used by other companies as well, so the Financial Services Agency (FSA) has already decided to inspect them all at once.
(from the press conference following a cabinet meeting on Friday, March 17, 2006)

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