Takahiko Wada
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[Tokyo 27th Reuters] - It is difficult to realize the quarterly disclosure review of companies advocated by Prime Minister Fumio Kishida. FSA officials expect the bill to be revised in 2023, and the revised law to come into force in 2024. If there is no momentum for a review in the US, where quarterly disclosure is mandatory like in Japan, there is a possibility that domestic discussions will recede. As with the financial income tax, the prime minister's earnestness toward the realization of the policy will be tested to see if the proposed policy will retreat.
In the case of legal revisions under the jurisdiction of the Financial Services Agency, after discussions in the working group established under the Financial System Council, a report will be compiled in December and a bill to revise the law will be submitted to the ordinary session of the Diet in January of the following year. is customary. But it will be very difficult to finalize discussions on the review of quarterly disclosure by December this year. Prime Minister Kishida dissolved the House of Representatives shortly after taking office and is in the midst of an election campaign.
At the government's ``New Capitalism Realization Conference'', which was held for the first time on the 26th, an expert who attended said that quarterly disclosure ``may encourage short-sighted management,'' but the full-fledged The discussion will start from now on. Economic Revitalization Minister Daishiro Yamagiwa, who is in charge of the meeting, said that the review of quarterly disclosure will be discussed at the meeting, and that it will eventually move to a forum such as the Financial Services Agency's council. Stated.
A central ministry official said, "It's different from the former Prime Minister Yoshihide Suga, who rushed each ministry and agency to work toward the end of the year," regarding how to proceed with discussions on important policies under the Kishida administration. Suga, who took office as prime minister in September last year, set out a carbon neutral target for 2050 in October. A source said, "It seems that METI was under considerable pressure."
The Financial System Council's Disclosure Working Group (WG) is currently discussing the enhancement of information disclosure on climate change, and it is likely that discussions on quarterly disclosure will begin early next year. Among those concerned, the standard scenario is to submit a revision bill to the regular session of the Diet in 2023 if the quarterly disclosure is to be revised. Even if the revised bill is enacted in the ordinary session of the Diet in 2011, it will take 2024 to implement the revised law considering the transition period. "Reviewing the quarterly disclosure can be carefully discussed over the next year," said an official.
A FSA official said, "Reviewing quarterly disclosure means abolishing it." Instead of simply abolishing quarterly disclosure, we will expand the content of the annual securities report and enhance the timely disclosure when important matters occur. He points out that it is important not to give the impression that information disclosure by Japanese companies has retreated.
Disclosure of non-financial information such as the impact of climate change is expected to be reflected in securities reports, but for companies, the work of creating financial reports will be more complicated than ever, so the abolition of quarterly disclosure will reduce the burden. plan. If the statutory quarterly report is abolished, burdens such as audit costs will also decrease.
However, at the Financial Services Agency, there is still a deep-rooted voice that ``a considerable rationale is needed to return to voluntary disclosure once it has been made mandatory'' (an executive).
Quarterly disclosure became mandatory in 2006. It seems that the background was the fact that the company could not be held accountable for the misrepresentation of quarterly results in the Livedoor scandal in January of the same year, and the Keidanren's strong request. The 2017 government's growth strategy called for verification of the pros and cons of obligatory disclosure, but in the 2018 final report of the Disclosure WG, it stated, ``It is an opinion that confirms the significance of progress confirmation from the perspective of investing from a medium- to long-term perspective. "At this point in time, we will not review the quarterly disclosure system."
Yutaka Suzuki, chief researcher at Daiwa Institute of Research, said, "The Financial Services Agency will probably consider it after receiving advice from the prime minister, but it's hard to imagine that circumstances have changed enough to overturn the conclusions made three years ago."
The trend in the United States is seen as an important key to the discussion on reviewing quarterly disclosure. Since 1970, the US has mandated quarterly disclosure by law. One of the reasons why Japan has continued mandatory disclosure is that it does not want to give the impression that Japan is reluctant to disclose information compared to the United States.
In 2018, President Trump instructed to halve the number of settlements in the United States. The U.S. Securities and Exchange Commission (SEC) entered into consideration, but it disappeared with the birth of the Biden administration of the Democratic Party.
Mr. Suzuki of the Daiwa Institute of Research points out that "short-term oriented corrective measures are also policies of the Democratic Party of the United States." “If it takes a long time to avoid being seen as a hoax by former President Trump, it is possible that the Biden administration will consider revising quarterly disclosure,” he said.
However, he wonders, "While the US government requires listed companies to disclose various information such as climate change and diversity within the company, does it mean that quarterly disclosure is not necessary?"
An official from the Financial Services Agency said, ``If the quarterly disclosure is not reviewed in the US, it will be inevitable that discussions will retreat in Japan as well.'' "There will be moves to explore compromises, such as voluntary disclosure rather than abolishment," he said.
"Is it absolutely necessary to review quarterly disclosure in order to realize a new capitalism? If the United States maintains mandatory disclosure, will Japanese companies' information disclosure decline if Japan is no longer mandatory disclosure? We need an explanation that satisfies Prime Minister Kishida," said one market official.
(Takahiko Wada, interview cooperation: Kaori Kaneko, editing: Hitoshi Ishida)
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