JBA's Opinion on Sale of Investment Trusts by Japan Post

JBA and eight other financial organizations, including the Regional Bankers Association of Japan, drafted "Our View on the Sale of Investment Trusts by Japan Post" and submitted it to the Financial Services Agency and other relevant bodies on February 16.The government is earnestly striving to implement structural reforms to revitalize the Japanese economy based on the principle of transferring duties from the public sector to the private sector. As for postal services, the centerpiece of reform programs, discussions are underway towards privatization in 2007. These discussions follow Koizumi's policy of privatizing postal services.Recently the Ministry of Public Management, Home Affairs, Posts and Telecommunications revealed its plan to submit a "Bill concerning Handling the Sale of Beneficiary Certificates of Investment Trusts by Japan Post (tentative name)" to the current session of the Diet. However, it would be inappropriate to initiate the sale of investment trusts by Japan Post at the very time the future of its services is being discussed. Broadening the scope of businesses conducted by the public corporation should be frozen until discussions are concluded and reforms implemented.We fully understand that fostering individual investors is very important for widening the strata of investors and energizing securities markets. However, permitting Japan Post to sell investment trusts with its government-run status intact, that is, keeping privileges given to governmental firms and favorable competitive edges, will lead to expansion of the public sector and may well deprive the private sector of its vitality. Investors are protected by regulating securities businesses solely under the Securities and Exchange Law. All private financial institutions are supervised under this law. It would be inappropriate to place Japan Post outside of this regulatory framework.We expressed our opposition to selling investment trusts at post offices in June 2003. This was a clear expression of our opposition to the sale of investment trusts by Japan Post with its government-run status intact.