The Securities Exchange Council at the "General subcommittee"

1. Background of the establishment of the subcommittee

(1) The environment surrounding the Japanese securities market with, the increased advancement of financial deregulation and internationalization, the rapid improvements of communication and information processing technology, and the switchover to a mature society, as it's background is indicating remarkable change. In the midst of this sort of a state of affairs, while securities administration has been placing it's focus on the policy of activating the market since the collapse of the bubble economy, now, with a little light beginning to be seen in market trends, and gearing toward the 21st century based on the environmental changes stated previously, the setting into motion of mid-long range securities market readjustments has become an issue of serious importance.

(2) Based on what has been stated above, and in order to examine the various fundamental problems involved in securities administration, within the Securities Exchange Council (Chairperson: Ichiro Kato, Honorary President, Seijo Gakuen (The Schools and University)) the "General Committee" was established in June of last year (Chairperson : Shoichi Royama, Professor, Osaka University)

2. Focal points of examination in the Committee

In the General Committee, based on fears concerning the 'hollowing-out' developing in Japan's securities market within the continuing development of economic and financial globalization, the focal points of :

(1) How much can the efficiency and function of Japan's market be improved?

(2) To what degree can favorable capital distribution to the businesses that sustain the Japanese economy be realized?

(3) How far can the diversified needs of investors be answered?

were discussed concerning the form the future will take for the securities market, market intermediaries, and securities administration.

3. State of affairs of the council's development

(1) In the discussions of the Committee up to this point, the main points examined were : 1) the problems of the Japanese market, 2) the fundamental philosophies and visions regarding the reform, and 3) the direction of market reforms.

In the discussions of the General Committee on November 29th of last year, the Committee agreed upon and presented "Summary of Discussions," an organized compilation of the sort of discussion topics that appeared in the previous discussions.

(2) Although this "Summary of Discussions" touched upon individual areas of examination, it was not a detailed compilation of reforms but the presentation of the framework of the discussion.

(3) With that, the furthering of individual examination of individual topic of the reform based on the framework provided by this 'Summary of Discussions' will continue, with a rounding up of discussions planned for no later than June of this year.

[About the financial system reformation (The Japanese version of the Big Bang)]