JAPAN'S BROKERS: A PROTECTED SPECIES
At the new Tokyo Stock Exchange building, an English-language sign in the visitors' gallery reads: "Please be seated when eating." Asked the significance of it, the tour guide had a ready answer. In the seated position, tourists are out of the floor traders' line of sight. "The traders complained that being watched by people eating made them feel like animals in a zoo," she added.
So is safeguarded the natural habitat of the world's most prosperous protected species. Fittingly symbolized by the exchange's flashy new building, a smug statement in granite and glass, the Tokyo stockbroking industry has been enjoying an unprecedented burst of good times. But, as critics in Japan and abroad have been pointing out, the brokers' prosperity is precariously dependent on the Ministry of Finance's continued toleration of their lucrative commission-setting cartel.
The cartel has ensured not only that trading costs for institutional investors in Tokyo are among the highest in the world but that any challenge to the official market through the over-the-counter route is effectively blocked. Now, a combination of forces is building up that could force the ministry's hand against the cartel.