[11529]
January 10, 2000
TO: INTERNATIONAL COMMITTEE No. 1-00
RE: INSTITUTE LETTER TO TREASURY ON US-JAPAN BILATERAL
DISCUSSIONS
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On December 20 and 21, 1999 US Treasury Department officials held bilateral discussions with
Japan to review implementation of the 1995 US-Japan Financial Services Agreement and progress in
financial liberalization, modernization and reform. Enclosed is a copy of a letter the Institute sent to
Treasury outlining issues the Institute recommended that Treasury raise in the discussions.
We understand from recent conversations with Treasury officials that they were able to raise
most of the Institute’s issues during the discussions. Treasury officials raised the need for regulators to
provide meaningful opportunity for industry comment before regulations are adopted. In this regard, US
negotiators pointed out by way of example that final implementing regulations under the newly enacted
Gramm-Leach-Bliley Act will not be adopted until after a public comment period.
The discussions also covered the cumbersome structure currently used to permit discretionary
investment advisers to manage Japanese public pension assets for Nempuku. The Japanese reported that
they expect to address this issue shortly when Nempuku is abolished and a new entity is created to
assume many of Nempuku’s previous responsibilities. The procedures under which discretionary asset
managers may manage public pension plan assets will be revised and streamlined at that time.
The discussions also reviewed the Japanese government’s plans to introduce defined contribution
plans. Treasury officials mentioned the industry’s view that providing a tax incentive for participants in
the new plans may be important to the success of the new program.
The Treasury Department issued a press release at the conclusion of the discussions. A copy of
the press release is enclosed.
Mary S. Podesta
Senior Counsel
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