Japan's online brokerages target investors with new services in bid for survival

Online securities firms in Japan are fighting for survival by diversifying services in the wake of a sharp drop in stock broker fees following their full liberalization 20 years ago. "The time when we could compete by lowering fees is over," said Rakuten Securities Inc. Brokerage fees were fully liberalized on Oct. 1, 1999, as one of the final steps in the financial system shake-up that was dubbed the "Big Bang." The reduction in fees then accelerated as online securities firms jumped into the market with the spread of the internet. In the year ended in March, the proportion of stock brokerage fees securities firms received stood at 0.03 percent of the Tokyo Stock Exchange's total trading value, which is one-tenth the 0.36 percent ratio posted in the year ended in March 1999, before liberalization took place. SBI Securities Co., the largest online brokerage, had 4.71 million trading accounts at the end of June, which is comparable with the number at Nomura Securities Co. "We've improved the quality of our services while making fees overwhelmingly low" for individual investors, said Yoshitaka Kitao, president and chief executive officer of SBI Holdings Inc., the parent of SBI Securities.