Rule Revisions to Support Tokyo's Bid as Financial Center
In our May newsletter, we discussed Tokyo's move to reclaim its place as one of the world's great financial centers. Yesterday a government panel made recommendations for achieving that goal. Among the steps that may be taken:

(1) Creating an exchange that offers a wider range of products, including stocks, derivatives, and commodities;

(2) Lowering barriers to global financial transactions, trade, and tourism to stimulate economic growth. Such steps might include lifting securities regulations that prohibit sharing compliance executives between affiliates, which creates burdens for overseas companies.

(3) Establishing a more hospitable physical environment, along the lines of London's Canary Wharf, for Tokyo's financial center of Nihonbashi.

No doubt some moves will need to be made to compete with regional centers like Hong Kong, which is studying the creation of a commodities derivatives market.

UPDATE 6/25/07 Apparently some executives at foreign securities houses are less than impressed with the plan:

"(The plan) is typical of the old-fashioned way of thinking that focuses on
putting up buildings," said Masaaki Kanno, chief economist at JPMorgan
Securities Japan Co. The emphasis should be placed on "building invisible
infrastructure," such as reducing taxes on hedge funds, which are said to be
higher in Japan than in the U.S. and Europe, and adopting global accounting
standards, he added.