TOKYO : Japan’s finance ministry plans to suspend Nomura Securities’ primary dealer status for government bonds for a month starting on Tuesday, Bloomberg News reported on Friday.
The step comes after Japan’s securities watchdog last month recommended fines for Nomura, the country’s largest brokerage firm, for a series of derivative transactions the regulator alleged were made by a Nomura trader to manipulate others to trade government bond future contracts.
The transactions generated a profit of 1.48 million yen ($9,955) and the watchdog recommended a fine of 21.8 million yen.
Nomura declined to comment.
Primary dealers are required to buy certain amounts of JGBs the Ministry of Finance sells at auctions. The obligation comes with a perk of being able to exchange views directly with the ministry at primary dealer meetings.
In 2019, Citigroup’s primary dealer status for JGBs was suspended for one month after the country’s financial watchdog found deficiencies in Citi’s derivative trading.
Mitsubishi UFJ Morgan Stanley Securities also had its primary dealer status suspended for a month in 2018 after an employee was found to have manipulated prices in JGB futures trading.
($1 = 148.6600 yen)
