Softbank Finance Corp. and Lehman Brothers announced on Thursday the establishment of a joint venture tasked with operating Japan's first online bond-trading system. Named E-Bond Securities Co., the new brokerage will operate a proprietary trading system to deal mostly in municipal bonds, bank debentures and corporate debentures, company officials said. It plans to start operations by June. Company officials said that the venture will improve the liquidity and transparency of bond trading in Japan. "In our country, there has not been a full-fledged distribution market for bonds," Softbank Corp. said in a news release announcing the move. "As a result, bond trading has been costly and inefficient, and lacked transparency." The system will enable real-time bond trading by allowing buyers and sellers to directly interact via the Internet, the officials said. Bond issuers -- companies and local government entities -- will be able to raise funds through capital markets, while investors will be able to trade with reduced risks, they said. Softbank Finance owns 60 percent of the joint venture and Lehman Brothers 40 percent. The firms will seek equity participation from more than 10 other financial institutions, including banks, life insurers and securities companies, the firms said. PTS operations became possible in December 1998 with revisions to the Securities and Exchange Law. Also on Thursday, Softbank Finance announced a tieup in Internet banking services with Suruga Bank, a regional bank based in Shizuoka Prefecture. While details of the alliance are still sketchy, Suruga Bank officials said the move will probably allow customers of online brokerage E*Trade Japan and online loan company E-Loan Japan -- both under the Softbank umbrella -- to settle their transactions through the a virtual branch the bank plans to set up.
