Hong Kong/Tokyo: Japan is considering merging its stock, commodities and other financial markets to boost their competitiveness in an increasingly fierce global environment, an official said on 17 April.
Prime Minister Shinzo Abe’s top economic policy-setting panel proposed facilitating the integration of the Tokyo Stock Exchange (TSE) and other financial markets into one super exchange, the cabinet office official said.
The council on economic and fiscal policy, which includes Japan business federation chairman Fujio Mitarai, made the proposal as part of efforts to help Japan’s financial markets cope with rapid globalization.
Under the proposal, TSE could incorporate other markets such as the Tokyo Commodity Exchange, the Tokyo Financial Exchange and the Tokyo Grain Exchange into a holding company it plans to set up later this year.
The panel also suggested that Japan should lower the firewall between banks and securities firms, so that financial firms can provide a greater range of products to their customers, the official said.
“The firewall remains relatively high in Japan, compared to the US,” he said.
Although the proposals have not been adopted by the government as official policy, local media reports suggest the plan could be incorporated into the government’s policy blueprint, due out in June.
“Once these plans are agreed, their implementation has to be quick, considering the rapid pace of globalization in the financial world,” the official said.
TSE, Asia’s largest bourse, has been pursuing a series of tie-ups in response to intense global competition. A private company, TSE, in February, signed a business alliance with the London Stock Exchange just weeks after signing a similar agreement with the New York Stock Exchange (NYSE).
The Tokyo bourse has also held talks with the Chicago Mercantile Exchange, the largest US futures market, as well as with Germany’s Deutsche Borse, while seeking to bolster cooperation with regional Asian bourses.
The alliance comes against a backdrop of increased merger and acquisition activity among the world’s major stock exchanges.
In June, NYSE announced a $10 billion (Rs42,000 crore) merger with pan-European exchange operator Euronext to create the world’s first intercontinental market.