American International Industries Inc. OTC BB Symbol EDII Message Board

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Microcap & Penny Stocks : American International Industries Inc. OTC BB Symbol EDII

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To: jmt who wrote (3678)	11/27/1998 9:10:00 AM
From: ColleenB	Read Replies (1) of 4814

OT...some more interesting reading.... (COMTEX) Noncompliant brokerages may be asked to close Noncompliant brokerages may be asked to close TOKYO, Nov. 27 (Kyodo) -- The government plans to urge securities houses to shut down if they fail to comply with an industry rule requiring them to clearly separate accounts for their customers and those for their own trading, a government source said Friday. The rule will be introduced in April as a way to protect customers' assets in the event of a failure of a securities house. The source said that of around 230 Japanese securities houses, some 50-60 firms, mainly small local brokerages, would likely face some liquidity problems if separate-account management is introduced. Of these problematic houses, around 30 firms would not likely be able to solve funding shortages on their own and they would be forced to close down or merge with others, the source said. Many local brokerages with small capital bases often use trading funds entrusted by clients for their day-to-day working funds, and the government has so far overlooked the situation. But as the measure is introduced, brokerages will have to split clients' cash from proprietary assets and entrust the cash with trust banks. Firms using customers' assets for their working capital will be required to raise funds on their own to cover expected shortages when separate-account management is adopted. But given commercial banks' reticence to lend and their weak financial standing, many small securities firms will likely face significant difficulty in securing funds. The government has been making special pitches to the Federation of Bankers Associations of Japan and other relevant industry groups to provide liquidity to small firms. Under the current Finance Ministry ordinance, vague provisions exist as to the management of accounts for clients and proprietary assets. It requires these firms to possess clients' assets ''in a form that is safe and liquid by separating from other assets.'' If a brokerage goes under, clients' cash is subject to creditors' asset seizure. But when the separate-account system is introduced, they will be protected and will not be subject to seizure. Failure to separate accounts will also result in some penalties, prison. -0- * end of story *

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