Nomura to Raise Brokerage Fees for Individual Investors

Nomura Holdings Inc. is among Japanese brokerages that will raise fees for individual investors to trade stocks in April in line with an increase in the country’s sales tax.

Nomura, Japan’s largest securities firm, will boost fees for stock transactions by about 3 percent, the Tokyo-based firm said in a letter sent to clients this week. That will raise the cost of a 500,000-yen ($4,800) trade by 195 yen to 7,020 yen, according to calculations based on the letter.

Prime Minister Shinzo Abe will raise the consumption tax in April to 8 percent from 5 percent to help contain the nation’s swelling public debt. The move will cause the economy to shrink in the second quarter, according to economists surveyed by Bloomberg, damping a recovery that helped the Nikkei 225 Stock Average surge 57 percent last year.

Daiwa Securities Group Inc., Japan’s second-biggest brokerage, will raise fees by about 3 percentage points, said Hiroharu Misawa, a Tokyo-based spokesman. SMBC Nikko Securities Inc. will also increase fees due to the tax, and it hasn’t informed clients yet, said Kouichi Shibata, a Tokyo-based spokesman at the unit of Sumitomo Mitsui Financial Group Inc.

Matsui Securities Co., the country’s third-biggest online brokerage, is considering raising fees while exempting transactions made under the Nippon Individual Savings Account, said Ryo Matsui, a spokesman at the brokerage. NISA, a government program that started this month, lets investors buy as much as 1 million yen of stocks and other securities without paying taxes on dividends and capital gains for five years.

Investors’ Burden

“The burden for investors will increase because of the tax, although we don’t charge fees for trading using NISA accounts as we want to encourage depositors to transfer their money to the securities market,” Matsui said by phone today.

A 500,000-yen trade will cost investors 540 yen, up from 525 yen, he said.

SBI Securities Co., Japan’s largest online brokerage, is considering various options and hasn’t made a decision yet, Tsuyoshi Ogata, an official from the corporate planning department, said by phone today. The options include keeping some fees unchanged, he added.

Biggest Beneficiaries

Japanese brokerages are among the biggest beneficiaries of the stock rally that has been fueled by fiscal spending and monetary easing. An index of securities stocks climbed 92 percent in the past 12 months, the best performance among the 33 industry groups in the benchmark Topix.

Nomura reported in October that six-month pretax profit from its retail business jumped more than fivefold from a year earlier to 121.1 billion yen, accounting for 65 percent of earnings before taxes. Daiwa’s profit from retail operations more than quadrupled to 58.9 billion yen in the six months ended September.

Banks are also planning to charge more for services in accordance with the higher sales tax. Sumitomo Mitsui will increase the fees for withdrawals at automated teller machines to 108 yen from 105 yen, the company’s lending unit President Takeshi Kunibe told reporters yesterday.

Nomura will also raise fees for advising companies on mergers and acquisitions and managing bond sales in accordance with the tax increase, Kenji Yamashita, a Tokyo-based spokesman, said by phone today.

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