The Opening of New Securities Market in Post-war Japan

神奈川県茅ヶ崎市 Directly after the end of World War II, Japan's Stock Exchange was closing. Bonds and stocks were traded on the unorganized and decentralized market known as the over-the-counter market. The Japanese Government wanted to reopen the stock exchange as soon as possible. However, GHQ directed the Government not to reopen the exchange till after implementation the new Securities and Exchange Law. Thereupon, Japanese Government implemented the Securities and Exchange Law in 1947. Next year, however, this Law was revised by a large margin under the supervision of the GHQ. The GHQ wanted new law to mirror closely the US system. By the revision, financial intermediaries such as banks were prohibited, in principle, from engaged in securities business. Through the implementation of Securities and Exchange Law of 1948 was expected that Japanese business financing would transfered from indirect financing to direct financing. However, such a expectation has been disappointed. The fundamental reason may be found the underdevelopment of institutional investors such as trust funds and pension funds in the Japanese economy of that time