Tentative
Translation

Summary of the Report of the Council for Tokyo Global Financial Center Promotional Activities

September 9, 2015

Council for Tokyo Global Financial Center Promotional Activities

Tokyo’s Significance as a Global Financial Center and the Type of International Financial Center It Should Aspire to Be
Tokyo’s significance as a global financial center The securities and asset management industries should take the lead in driving Japan’s sustainable economic expansion while striving for growth integrated with overseas economies
The type of international financial center Tokyo should aspire to be Asia’s number one global financial center, making maximum use of a lineup of domestic enterprises that boast a scale unique in Asia and boasting abundant private financial assets

Current Tokyo Market Situation•Asset management industry
Loss of asset management and trading units and fund managers to Hong Kong,
Singapore and other locations overseas
Increasing overseas consignment of investment trust management
Japan’s positioning as a sales base rather than for asset management
Rigidity of human resource performance assessment systems related to asset
management personnel
Small market size compared to the size of the economy of Japan•••••••••••••

Stimulate stock, ETF and ETN markets

High liquidity sustained by overseas investors’ high shares
Liquidity dominated by some products in ETF and ETN markets

Bond market
Preponderance of domestic institutional investors among government bondinvestors
Small size of corporate bond market dominated by corporations with high credit
ratings; few holdings by overseas investors

Relatively small derivatives market
Preponderance of equity index issues traded
Low share of trading by domestic investors••••••••

Other market-related issues•
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Diversify primary markets (andproducts)
Publicize corporate governancereforms abroad
Diversify investor segments
Make institutional investors’
investment management policies
more flexible
Vitalize the corporate bond market
Offer a variety of derivatives
products
Develop markets for professionals
Strengthen the functioning ofsystems and infrastructure

Insufficient growth fund supply capabilities
Underdeveloped markets for professionals
Systems and infrastructure need to function more strongly

Business and lifestyle environment
Insufficient provisions for the use of English in business and the lifestyleenvironment
Compared to Hong Kong and Singapore, not enough system and lifestyleenvironment provisions have been made to welcome foreign companies andprofessionals

Publicize Corporate Governance Codes and disseminate information (JPX)
Diversify product listings, including ETFs, J-REITs, and Infrastructure funds (JPX)••

Derivatives market•••

Strengthen the asset management industry (a priority issue related to turning Tokyo’s market into a global financial center)•Establish the working group on asset management (this council)•Carry out research on asset management business in overseas markets (JITA)•
Support foreign government and public agency road shows (JITA)•Conducted a questionnaire regarding responses to Japan’s Stewardship Code (JIAA)•
Hold a continuing series of expanded corporate governance workshop (JIAA)•
Provide an environment to encourage domestic institutional investors to invest in diverse products (council secretariat organizations)•
Human resource training at universities and graduate schools•
Use National Strategic Special Zones in efforts to develop the asset management industry•
Establish Japanese versions of Emerging Managers ProgramsFurther deliberate•
Change compensation systems of public pensions for asset management
requests to the national•
Make NISAs and Junior NISAs permanent, expand and simplify themand metropolitan•
Abolish the special corporate tax on DCs and raise the maximum level of DC amounts
governments•
Provide an environment conducive to promoting intergenerational transfers of financial assets

More support needed for establishingasset management firms in Tokyo andproviding incentives for them to locate
here
More training needed for asset
management personnel
Better asset management skills
neededPush for widespread adoption and useof the Stewardship CodeBetter assessment and remuneration
system reforms required
Expand offerings of retail products
Promote Tokyo as a global fund center

Stock, ETF and ETN markets••

Main Efforts Targeted at Issues

IssuesVitalize bond markets
Continue discussions in the Study Group to Vitalize the Corporate Bond Market (JSDA)
Host a forum on bond market vitalization (JSDA)••

Vitalize derivatives markets•••

Carry out activities including seminars to popularize derivatives trading among individual investors (JPX and securities and asset
management industries)
Offer a variety of listed derivatives products (JPX)
Review request for tax system revisions designed to expand the scope of profit and loss offsets on financial products to include
derivatives trading

Other market-related provisions••

Carry out promotional activities aimed at bond issuers to vitalize Pro-Bond market use (JPX)
Consider making government bond and share settlements possible in shorter time frames (JSDA, TSE, JSCC)

Efforts related to business and lifestyle environment enhancements•••

Reduce language barriers
Provide an environment thataccommodates sophisticatedexpatriate personnel
Establish regulations designed toattract overseas financial institutions toTokyo••••••

Achieve more robust dissemination of information in English (council secretariat organizations)
Host international financial conferences and attract financial bases of operation (council secretariat organizations)
Coordinate with the Council for Town Planning to Create Investment and Growth to promote improvements in the businessenvironment (this council)
Further deliberate
Strengthen governmental English-language capabilities
requests to the national
Provide a more comfortable living environment for foreigners
and metropolitan
Promote flexible financial administrative oversight regarding financial businesses operated in Tokyo
governments