Against the backdrop of the Financial Services Agency's organizational reorganization this summer, calls to ease the firewall regulations prohibiting the sharing of customer information between banks and securities firms have sparked debate.
A review of the firewall regulations prohibiting the sharing of customer information between banks and securities firms has become a key issue. As the Financial Services Agency establishes new supervisory bureaus for banks and securities firms and advances preparations to make Japan an asset management center, voices are emerging in the banking industry in favor of regulatory easing.
In the past, however, there have been cases of regulatory violations. Mitsubishi UFJ Bank and its affiliated securities subsidiary were issued business improvement orders in 2024, while SMBC Nikko Securities and Sumitomo Mitsui Banking Corporation were also subject to administrative action in 2022. In light of this history, some Financial Services Agency officials are reportedly of the view that the securities industry will strongly oppose any easing.
The firewall regulations are described as a barrier designed to prevent conflicts of interest, such as bond issuance activities using nonpublic information about client companies held by banks. At the same time, it has been pointed out that a framework also exists allowing information sharing between banks and their affiliated securities firms for listed companies, provided prior consent is obtained.