Japan's regulator warns Mizuho Securities over IPO price setting
FILE PHOTO: Mizuho Financial Group's logo is seen next to an electronic board showing stock prices indexes at a branch of Mizuho Securities in Tokyo, Japan January 25, 2017. Picture taken January 25, 2017. REUTERS/Kim Kyung-Hoon
TOKYO : Japan's antitrust regulator on Thursday said it had admonished the brokerage unit of Mizuho Financial Group for pushing startups to accept underpriced initial public offerings (IPO).
The warning comes as Japan's Fair Trade Commission (FTC) has been targeting price-setting procedures to address concern that IPOs can be underpriced to increase the chance of share prices jumping on trading debuts to the benefit of brokerage clients but at the cost of startups.
The regulator said in a statement that Mizuho Securities "could have been abusing its superior bargaining position" as lead underwriter in persuading two startups to accept IPO prices deemed low by third parties.
Mizuho has already taken improvement measures, according to the regulator.
Mizuho said in a separate statement that it would take the warning seriously and work to ensure a rational and appropriate IPO price-setting process.
