The Financial Services Agency said Tuesday it will strengthen its electronic share-transaction reporting system to catch possible hoaxes after a company posted a false report on the system in January claiming it had bought majority stakes in Sony Corp. and other Japanese blue-chip firms.
The FSA will introduce a system to automatically flag possibly false reports, based on the size of the transaction relative to the reporting company. The FSA also hopes a related law will be amended so it can delete allegedly false reports.
Yoshimi Watanabe, minister for financial services, said he wants to introduce the new safeguards as soon as possible.
Last month, the regulator ordered Teramento Corp., an unlisted company, to correct a securities filing that claimed the firm owned majority stakes in Sony, Toyota Motor Corp. and four other large companies, with the acquisition value exceeding ¥20 trillion. All six companies denied any such transaction took place.
But because Teramento has yet to comply with the FSA's order, the filing is still in the EDINET share-transaction database. Under the current Financial Instruments and Exchange Law, the FSA has no power to delete reports that have been put on EDINET.
The FSA hopes the Diet will amend the law during the current session to provide it with such power.
Any investor in Japan is required to make a report to the FSA on an acquisition of a 5 percent or greater equity stake in any company and such a report is then made available to the public through EDINET on the Internet.