A financial services law to protect consumers from the impending "Big Bang" financial reform is urgently needed, the Japan Federation of Bar Associations told the Finance Ministry on March 26.
The case for consumer protection was made as the date set for the Big Bang reforms -- April 1 -- fast approaches. With changes expected to be made to the financial industry landscape, products such as investment trusts are expected to balloon.
"Consumers are likely to be involved in more troubles than ever," the lawyers' group warned in a 50-page report, which also discusses problems of industry supervision by financial authorities.
Financial institutions should be legally prohibited, for instance, from suggesting without prior request from the customer that risky financial products be purchased, the report says. Such firms should be obliged to make sure the customer fully understands the risk involved before making a deal, it adds. 'The bright side of the Big Bang has been getting attention," group member Yutaka Ishitoya told a Tokyo news conference. "Consumers must also look at the dark side."
The legal proposal is based on the lawyers' observations of similar reforms to Britain's securities market in the 1980s. The federation submitted the report to ministry officials in charge of the banking, securities and insurance industries, as well as to all major political parties.