Banks in Japan were permitted to begin selling stocks directly Wednesday as part of a deregulatory effort to bring more investors into the securities market.
Under the revised Securities and Exchange Law, banks and other financial institutions are no longer banned from dealing in stocks and other securities, allowing them to target individual investors with products other than savings accounts and time deposits, right at their own outlets.
The government hopes this will help divert some of the money flowing into individual savings accounts and guide it into the image-challenged equity markets instead.
Sumitomo Mitsui Banking Corp. plans to sell foreign government bonds at all its outlets, and UFJ Bank is setting up securities counters to exclusively handle stocks and foreign bonds at 15 outlets. In addition, around 30 regional banks are expected to start providing stock brokering services.
Many banks and brokerages have formed alliances to launch stock brokering businesses.
Businesses other than banks were allowed to provide securities services in April. For example, convenience store chain Lawson Inc. recently began offering stock brokerage services in a tieup with Nikko Cordial Securities Inc.
Banks were allowed to deal in stocks through securities subsidiaries in 1993 and through financial holding companies in 1998, but were prevented from directly engaging in securities business because of fears that information on bank customers would give them an unfair advantage over securities firms and cause unwanted solicitations.