Magazine article American Banker

Japan to Give Securities Licenses to 7 European-Owned Concerns

Magazine article American Banker

Japan to Give Securities Licenses to 7 European-Owned Concerns

Article excerpt

Japan to Give Securities Licenses To 7 European-Owned Concerns

Japan is set to grant securities licenses to six European financial institutions and a United States subsidiary of another.

The Japanese Ministry of Finance has agreed in principle to grant licenses to three of the companies of Baring Brother & Co. Ltd., the London merchant bank, which does not have a Japanese banking license; and securities subsidiaries of both Dresdner Bank, Frankfurt, and Swiss Bank Corp., which do have a Japanese banking license.

Additionally, licenses are expected to be awarded later to: Sogen Securities, a United States subsidiary of Societe Generale, the French state-owned bank; County Bank Ltd., a merchant subsidiary of National Westminster Bank PLC, London; UBS Phillips and Drew, a subsidiary of Union Bank of Switzerland; and Deutsche Genossenschaftsbank, Frankfurt.

As in the U.S., Japan does not allow banking companies to own securities houses. Licenses to the seven institutions will allow them to own only 50% of the securities subsidiary. The remaining 50% must be owned by non-banking companies.

Only one company, Citicorp, now holds both a banking license and a securities license in Japan. That contradiction to Japanese law evolved recently when new British legislation allowed Citicorp to raise its stake in the British broker Vickers da Costa to 100%.

"The Japanese weren't faced with having to grant a license because Vickers already had one,' a British banker said. "They were faced with a fait accompli.'

A securities license--really a set of four licenses--will allow the companies to deal in, sell, and underwrite securities. …

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