Japan looks to Hong Kong Tracker Fund for cross-shareholding solution

Yanagisawa Hakuo, the reformer heading JapanÆs Financial Supervisory Agency (FSA), is reportedly proposing to develop an exchange-traded fund (ETF) that would absorb the massive cross-shareholdings of Japan Inc.
The concept resembles the Hong Kongs government utilization of the Tracker Fund to dispose of its stakes in Hang Seng Index stocks following its 1998 stock market intervention.

Yanagisawa is said by market players to be discussing the idea with Nomura Securities, which would sponsor the product. The ETF would track the Tokyo Stock Exchanges TOPIX index, which is the major benchmark for Japanese institutional investors.

The FSA earlier this spring scrapped the remaining legal hurdles for introducing ETF's. Both State Street and Barclays Global Investors are feverishly working to introduce ETF's to Japan this year. BGI hopes to launch an ETF on the Tokyo Stock Exchange using the...

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