Jan. 12 (Bloomberg) -- Japanese stock exchanges would be allowed to set up joint ventures with foreign bourses under an amendment to the financial product transaction law, proposed by Japan's Financial Services Agency, Nikkei English News reported.

The bill, which will be submitted to the current parliamentary session, will permit ownership of Japanese exchanges operating under holding companies by foreign bourses of up to 49 percent from less than 20 percent, Nikkei said, citing draft revisions.

Tokyo Stock Exchange Inc., the world's second-largest bourse, and the London Stock Exchange, plan to set up a joint venture to provide a market open solely to institutional investors in 2008.

To contact the reporter on this story: Kathleen Chu in Tokyo at kchu2@bloomberg.net.

Last Updated: January 11, 2008 20:38 EST