The Diet passed a bill Wednesday to ease curbs on banks’ investments in nonbanking firms, punish leaks of corporate information used for insider trading and toughen penalties on investment managers using false information to win contracts.
The portion of the bill revising the banking law relaxes the rule that limited banks in principle to only being able to hold 5 percent stakes in nonbank companies.
The revision allows banks to hold 100 percent stakes in liquidated companies for up to three years and in small and medium-size firms for up to five years.
The measure was devised to support small and medium-size companies after a special law for a moratorium on their loan repayments expired in March.
The revision also enables banks to use their investment units to hold less than 40 percent stakes in hotel and other companies for up to 10 years if they are expected to contribute to regional economic development.
The bill also amended the financial instruments and exchange law to impose penalties on those who leak in-house corporate information for the purpose of insider trading in shares.
Before the revision, only parties who obtained inside information and used it for stock trading had been subjected to punishment. The amendment came after employees at securities companies were found to have leaked in-house information to clients for sales promotion purposes.
In light of the massive fraud scandal involving AIJ Investment Advisors Co., which used false information to win pension fund investment contracts, the bill raised the maximum prison term from three years to five and the maximum fine from ¥3 million to ¥5 million for such acts.
Most of these new measures will be implemented by fiscal 2014, which starts next April 1.
Five banks set up fund
Two Mitsubishi UFJ financial group units and four regional banks in Tohoku announced Tuesday that a ¥2 billion fund will be set up July 1 to help producers in the agriculture, forestry and fishery industries expand into processing and marketing.
Producers certified by the government will be eligible to receive funds for up to 15 years as well as business advice and cooperation in cultivating marketing channels, the banks said.