Japan watchdog to boost oversight over Nomura, Daiwa

TOKYO, March 25 Tue Mar 25, 2014 4:50am EDT

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TOKYO, March 25 (Reuters) - Japan's securities market watchdog said on Tuesday it will boost oversight over major securities houses Nomura Holdings Inc and Daiwa Securities Group Inc as a way to help maintain the stability of the overall financial system.

Nomura and Daiwa are Japan's biggest securities traders and their sheer size means they have the potential to drag the whole trading system into any financial trouble they run into.

In announcing its annual oversight policy, the Securities and Exchange Surveillance Commission said, as a preventive measure, it will increase the frequency of on-site inspections of the two securities houses to once a year from this year instead of once every three to four years.

The regulator will also beef up off-site monitoring through regular interviews with employees and data collection.

The SESC also said it will improve regulation of asset managers, especially those with a large number of retail clients. These asset managers are not inspected regularly now. (Reporting by Noriyuki Hirata; Writing by Taiga Uranaka; Editing by Miral Fahmy)

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