Japan unveiled plans Friday to create an English-speaking support office to usher foreign asset managers into the country, as part of its broader efforts to become the main global financial center in Asia.
The Financial Services Agency and local finance bureaus will establish the financial market entry office in January of next year, the FSA said, adding that the support office is slated to manage the pre-application consultation, registration and supervision process for incoming foreign asset management firms in English.
Staff from both the FSA and the local bureaus will be incorporated in the new office as it becomes the single point of contact for those financial firms, the FSA said. Communications will also be available online in forms such as video conferences.
To support this effort, the FSA also launched a public consultation Friday to amend relevant regulations to allow foreign firms to submit required documents in English. Starting this month, the regulator plans to offer preliminary consultation in English before setting up the support office in 2021.
“Strengthening Japan’s functions as a global financial center will help to make global financial markets more resilient against crises such as natural disasters through geographical diversification of financial centers,” the regulator said. “Also, that will help create new employment and business opportunities as well as economic growth in Japan.”
Japan’s new initiatives come as the battle to become the biggest financial center in Asia is heating up.
Hong Kong has long held the status as Asia’s leading finance hub due to its high concentration of foreign firms, its historical ties to British banking and its status as a bridge between the West and China’s lucrative market. However, with the recent passage of China’s national security law for Hong Kong sparking fears about the impact on its status, as well as the economic fallout from the COVID-19 pandemic, other Asia-Pacific nations have been making moves in a bid to take over the city’s coveted role.
Japan had already begun its efforts before Friday’s news. In October, Tokyo set up an office in Hong Kong to consult companies considering a move to the Japanese capital. The same month, the new prime minister, Yoshihide Suga, highlighted in his first policy speech to the Diet that the government will go after a range of opportunities to set up Japan as a global financial center.
And in July, Taiwan officially launched an office to facilitate migration from Hong Kong. Taiwan’s Mainland Affairs Council said at the time that it hopes the office will attract capital, as well as bankers, skilled workers and companies from Hong Kong to Taiwan to stimulate new opportunities in the country’s financial sector. The following month, Taiwanese President Tsai Ing-wen also stressed in a speech that the country plans to open up its economy even more with the goal to become an Asian financial services hub.
Meanwhile, some global financial institutions have already signaled that they starting to look beyond Hong Kong.
In September, Bank of New York Mellon said that it had opened an office in Taiwan and appointed a head to lead operations there. And Deutsche Bank announced in July that its new Asia CEO will be based in Singapore, picking the city over Hong Kong. Citigroup said in September that it would open its biggest global wealth advisory hub in Singapore, while Goldman Sachs also announced that same month that it would open a foreign exchange and pricing platform in the same city-state. In addition, the D.E. Shaw Group said in October that it would open an office in Singapore, saying it is a “logical step” in the growth of its geographical network.
However, some firms, such as London-listed banks HSBC and Standard Chartered, which have significant operations in Hong Kong and mainland China, have expressed their support for the new security law as a way to protect their financial positions in the region.