1. Investment products = (offering of attractive investment products)
The securities market should be able to contribute to the formation of national financial assets for the newly 'grayed' Japan through providing attractive and competitive products at low costs to investors with diversified needs. To let the market play such a function, it is necessary to improve product quality, while management attitudes and information disclosure by securities issuers in light of investors' viewpoints are also important.
The offering of such attractive investment products constitutes
the foundation for vitalizing the market.
<Specific Issues for Discussion>
o Diversification of products
Some of the products offered in other countries are not traded
in Japan because of provisions of criminal, commercial and other
laws. Discussions should be carried out to introduce such products
for the diversification and expansion of products.
・ Derivative products, etc.
It is necessary to introduce new products to offer a variety
of hedging measures and to improve investment performance. In
light of this, the environment should be improved for the expansion
of stock-related derivative and bond futures/option trading.
・ Definition of securities
The advancement of financial technology has led to the emergence
of a variety of products including asset finance securities.
Under such circumstances, some people argue that the definition
of securities in the Securities Exchange Law is impeding the development
of new products, or that it is necessary to discuss the proper
form of definitions. How should we deal with such arguments?
o Investment Trust
Investment trust is expected to play the core role in offering
a convenient, effective asset investment tool to many and unspecified
people, mainly individual investors. In light of this, we belive
that we ought to discuss measures to improve convenience, diversify
products and expand sales channels.
o Enhancement of corporate vitality
Companies in need of funding strongly require the introduction
of measures to facilitate and give flexibility to procedures for
the issuing of ABS (Asset Backed Securities), MTN (medium term
notes), DR (depository receipts), stock options, and stocks.
How can ideas presented by laws including commercial laws be organized
in preparation for their introduction or the expansion of their
o Enhancement of attraction of stocks
To call back individual investors to the stock market, it
may be necessary to secure fair value of stocks as well as to
enhance investment value of stocks that are objects of investment.
It may also be necessary to consider measures to make stock investment
more familiar to individual investors. Some people argue that
it is useful to summarize ideas of commercial laws with regards
to this. How should we consider this opinion?
・ Payout ratio
Is it not necessary to reform the dividend policy, to abandon
the par value dividend principle and shift to a dividend policy
to consider payout ratios and ROE? By what measures can "the
reformation of consciousness" be guided?
・ Taxation system
Is it necessary to revise dividend taxation to enhance the
attraction of stocks as an object of investment?
・ Acquisition of own stocks for writing off profit
The acquisition and writing off of own stocks can be an effective
measure to improve financial indicators such as ROE and to rebate
surplus funds to stockholders. How can ideas in commercial laws
be adjusted in this regard?
・ Mutual holding of stocks
Some people argue that mutual holding of stocks for non-financial
motives distorts price formation and negatively affects the maintenance
of fair stock values. They therefore claim that it is desirable
to abandon such practices even though it has its benefits. Others
insist that it is unnecessary to exclude stock holding from non-financial
motives and that the influence on stock price formation may not
be a "distortion". How should we consider such differences
・ Investment unit of stocks
Are companies required to take more positive measures to
make stock investment units smaller to make stock investment closer
and easier for individual investors? Some people insist that
ideas presented by commercial laws should be adjusted with this
regard. How should we consider such opinions?
o Expansion of offering of information
For answering diversifying investor needs and encouraging
individual investors, it may be important to expand information
which investors can refer to when making judgments. Accordingly,
it may be desirable to secure timely disclosure, promote IR, and
develop industries related to securities market information.
o Reduction of product offering costs
For enhancing the attraction of investment products, how
should the securities transaction tax, one of the transaction
costs, as well as commissions mentioned below, be regarded?