Single big integrated exchange pushed

JIJI

The government is calling on the financial industry to cooperate over the creation of a comprehensive exchange that would handle securities, commodities and financial futures in an integrated manner.

The Financial Services Agency, as well as the industry and agriculture ministries, appealed Wednesday for the cooperation of domestic bourses such as the Tokyo Stock Exchange, the Osaka Securities Exchange and the Tokyo Commodity Exchange to achieve the target.

The request came after the Diet approved revisions to the Financial Instruments and Exchange Law on Sept. 6 to permit the establishment of a comprehensive and fully integrated exchange that would hopefully attract investment from across the globe.

But the bold plan can’t be achieved without further efforts, Ikko Nakatsuka, senior vice minister for finance at the Cabinet Office, told industry executives including TSE President Atsushi Saito.

In July, the government targeted the creation of such an exchange in fiscal 2013 and aims to turn it into Asia’s biggest bourses in terms of trading volume. Under the revised financial instruments law, regulatory authority over exchanges was unified and placed under the FSA in principle. It had previously been divided among the FSA and the industry and agriculture ministries.

The focus now switches to whether further reorganization and consolidation of the financial industry will take place after the TSE and the OSE merge under a new holding company, Japan Exchange Group Inc., in January.

But commodity exchanges struggling with declining trading volume are already moving in this direction.