JAPAN

A senior official in Japan’s Ministry of Finance said the government would soon issue new instructions to “completely prohibit” the use of so-called discretionary accounts that are at the center of Japan’s stock market scandal. Hiroshi Yasuda, vice minister for administrative affairs at the Finance Ministry, said last week that the instructions would be stronger and more specific than the ministry’s prior set of instructions. Yasuda called current instructions “prohibition in principle.” He said the new instructions would be a “complete prohibition.” The guidelines refer to “discretionary accounts” managed by brokers, in which brokers can buy and sell securities for a fund without notifying the client. The ministry has informed brokers periodically since 1964 that they should not create or operate such accounts, according to an official of the ministry’s stock market affairs section. The new instructions will say explicitly that clients must be notified before the purchase or sale of securities in their accounts and also be told the value of such planned transactions.