UPDATE 1-Japan's FSA to stiffen supervision of asset management industry -sources

Tue Jul 8, 2014 7:55am EDT

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TOKYO, July 8 (Reuters) - Japan's Financial Services Agency will beef up its supervision of asset management companies, three people involved in the matter said on Tuesday, in the wake of a scandal in which a fund manager lost more than $1 billion in pension money.

The FSA will set up a dedicated team to supervise the industry, the sources said, adding that an announcement was expected on Wednesday.

Fund managers have come under scrutiny after AIJ Investment Advisors in 2012 lost more than 100 billion yen in pension money and falsified reports to investors to cover up its losses.

The new team represents an attempt to more directly scrutinise asset managers.

In the AIJ case, the FSA was criticised for responding slowly, only after an investigation by the Securities and Exchange Surveillance Commission. (Reporting by Takahiko Wada; Writing by Taiga Uranaka; Editing by William Mallard and Clarence Fernandez)