MUFG Bank, Affiliates May Be Penalized over Client Info Sharing

Jiji Press

18:09 JST, June 7, 2024

Tokyo, June 7 (Jiji Press) — Japan’s Securities and Exchange Surveillance Commission is thinking about recommending administrative punishment against MUFG Bank and two related securities companies over their handling of customer information, informed sources said Friday.

The securities watchdog believes that customer information was shared between MUFG Bank, Mitsubishi UFJ Morgan Stanley Securities Co. and Morgan Stanley MUFG Securities Co., which are all under the umbrella of Mitsubishi UFJ Financial Group Inc., without the consent of the customers, according to the sources.

If the commission recommends that the Financial Services Agency impose administrative penalties, the FSA will consider the matter.

The financial instruments and exchange act bans banks and securities firms within the same financial group from sharing undisclosed information about clients without obtaining their permission, a measure known as the firewall regulation.

In 2022, the commission advised the FSA to take administrative action against SMBC Nikko Securities Inc. and Sumitomo Mitsui Banking Corp., which are both part of the Sumitomo Mitsui Financial Group Inc. group, for breaching the firewall regulation. The FSA later imposed administrative punishment.

On the alleged firewall regulation violation at the Mitsubishi UFJ group, finance minister Shunichi Suzuki told a press conference on Friday he is sure the commission will handle the matter appropriately.

“I believe that an announcement on the outcome (of the commission’s examination) will be made in due course,” he said.