A small securities house has cracked open Japan's highly regu lated stockbroking commission system in a move which industry sources say should accelerate plans to deregulate the stock market.
Matsui Securities Co Ltd said on Friday it would cut itsbrokerage fees for stocks and convertible bonds traded over the counter by half, starting from March.
It is the first time a broker has said it will deviate from the norm in setting its fees.Brokerage commissions for stocks listed on Japanese stock exchanges are fixed under the Securities and Exchange Act while fees for over-the-counter trade can be set within a range fixed by the Japan Securities Dealers' Association.
But brokers have so far charged uniform fees on stocks traded over the counter, the sources said. After Matsui's announcement, Paribas Capital Markets Ltdsaid it had cut its brokerage fees for stocks traded on Japan's over-the-counter market by half, effective from Friday. Matsui said other companies in the industry had tried to pressure it into not making the change.
Some of them tried to criticise and pressure us, but we decided to help revitalise the market by taking the steps as long as they meet the rules, a Matsui statement said.
An executive at a medium-sized Japanese broker said:Matsui's decision will accelerate the liberalisation of stockbroking fees.
He added that both big and small brokers would have to decide by March whether to follow Matsui's example or possibly lose business to it, he said.
But Ichiyoshi Securities Co Ltd , a medium-sized broker with a strong customer base in the OTC market, said it would not cut its fees for now.Our strategy is to earn commissions by offering something value-added... We plan to differentiate our service by offering better information, an Ichiyoshi spokesman told Reuters.
An advisory panel to the finance ministry is currently discussing how stockbroking fees should be deregulated and is due to make a final proposal by June.
Prime Minister Ryutaro Hashimoto unveiled in November a five-year plan for Big Bang reforms to liberalise Japan's financial markets and catch up with reforms carried out more than a decade ago in Europe and North America.
