Japan is hoping to strengthen its financial services industry by fundamentally changing industry regulations that have stymied growth, reports The Wall Street Journal.

A proposal for a large-scale deregulation of financial institutions, stock exchanges and funds by the Financial Services Agency suggests the country wants to lose its reputation as an expensive, bureaucratic place for financial services.

The plan, for example, would abolish a rule that requires exchange-traded funds to be based on 13 designated stock indexes by allowing ETFs to be based on any stock index or security, including bonds or futures. Currently, Japan prohibits the staff of banks and brokerages from sharing the same offices and customer information, but relaxing those rules could help banks generate more business.

The proposal would also allow foreign issuers to submit disclosure documents in English, removing the expense of translating documents into Japanese. Officials hope these changes will bring more foreign investors to Japan, where household assets far exceed those of the U.S.

Japan strengthened regulations after the 1980s asset bubble popped, but has recently seen its appeal diminish as money managers take their business to less-regulated centers such as Hong Kong and Singapore.

"It is absolutely in the right direction and further in that direction than the skeptics would have believed possible," said Mark Branson, head of the Tokyo unit of Swiss banking group UBS AG. "When I came here 2-1/2years ago, people said that kind of change was impossible in Japan."

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