Operating revenues of securities companies in Japan FY 2013-2022, by type
In the fiscal year 2022, commissions accounted for the largest share of operating revenue of securities companies in Japan, amounting to around 2.3 trillion Japanese yen. The net income of securities firms declined compared to the previous year.
Securities companies in Japan
Securities companies in Japan are regulated under the Financial Instruments and Exchange Act and supervised by the Financial Services Agency (FSA). As of 2023, there were around 272 securities firms in Japan. Leading securities companies include Nomura Securities and Daiwa Securities, among others. Due to regulations in Japan’s financial sector, securities firms play a major role in investment banking.
Role of securities companies in investment banking
In Japan, investment banking activities must be separated from commercial banking activities by law. Therefore, commercial banks are restricted in their possibilities to engage in investment banking activities, and securities companies have become the primary providers of such services. Japan’s largest financial groups, Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group, each have separate securities units under their umbrella. Recently, the Financial Services Agency has reportedly advocated lifting such restrictions to promote the global competitiveness of Japanese banks.