Financial Services Minister Kaoru Yosano said Friday that his advisory panel will issue recommendations on stock market reforms by mid-February.

The panel, composed of academics, business executives and the heads of the Tokyo Stock Exchange and the Osaka Securities Exchange, will hold its first meeting Monday, Yosano told reporters.

The Liberal Democratic Party is also expected to propose stock exchange reforms by around Feb. 20, he said.

The panel was launched at Yosano's request after a series of forced shutdowns and glitches at the TSE, the world's second-largest bourse, significantly damaged its credibility.

"Members of the panel are expected to discuss such issues as computer systems at the stock exchanges and how to boost governance to make the bourses function better," he said.

The panel is also likely to discuss stock exchange rules, he said in apparent reference to questions raised by the Livedoor scandal and the accidental short-selling blunder generated by the combined incompetence of Mizuho Securities Co. and the TSE on Dec. 8. The blunder started as an erroneous sell order but couldn't be canceled because the TSE's computers wouldn't permit it.

The 10-member panel includes Hideki Kanda, professor of political science at the University of Tokyo graduate schools of law and politics; Masaharu Shibata, chairman of NGK Insulators Ltd.; and TSE President Taizo Nishimuro.

Meanwhile, Yosano told the House of Councilors Financial Affairs Committee later in the day that the FSA is already talking with the Justice Ministry about beefing up penalties for Securities and Exchange Law violations in view of the allegations raised in the Livedoor case.

Article 158 of the current law stipulates a maximum prison term of five years or a fine of up to 5 million yen if an individual is convicted of falsifying financial statements or spreading rumors to manipulate stock prices. These are the allegations prosecutors have made against the Internet firm, but expert analysis on their legitimacy has been scarce.

Some members of the LDP are demanding the penalty be hiked to a maximum prison term of about 10 years.

"Traditionally, there has been the view that 10 years is too long in terms of striking a balance with other penalties," Yosano told the committee Friday. "But calls (for longer imprisonment stipulations) are strong within the party, and we are considering how long the term should be in the event we do lengthen it."