Operating revenues of securities companies in Japan FY 2012-2021, by type

In the fiscal year 2021, commissions accounted for the largest share of operating revenue of securities companies in Japan, amounting to around 2.3 trillion Japanese yen. That year, the net income of securities firms slightly decreased 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 2021, there were around 270 securities firms in Japan, with almost 90,000 employees. 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.