Revival of holding firms made easier

The Fair Trade Commission is considering greater liberalization once it lifts the ban on holding companies than had been initially planned by the organization’s study panel.FTC Chairman Yasuchika Negoro indicated Jan. 16 that the FTC, in cooperation with government agencies, will soon work out a draft proposal for easing the ban. In its interim report in December 1995, the panel called for allowing four specific types of holding companies: Financial, small, those used to break up company divisions into separate entities, and venture capital companies.While emphasizing that there has been no “change of tone” in the FTC’s stance, Negoro said the panel specified the four not to define the scope of liberalization but to present some examples. “We must avoid the excessive concentration of power by any means, but there may be some other types of holding companies that would not result in such a situation,” he said at a lecture sponsored by the Yomiuri International Economic Society. He also indicated that the FTC will go rather easy on restrictions over share holding by financial institutions.Under the current rule, banks can hold up to 5 percent of a certain company’s outstanding shares and insurance companies 10 percent. Negoro said that financial holding companies themselves are not financial institutions and thus will not be subject to such restrictions.