July 13, 2018 / 7:09 AM / 5 days ago

Japan to suspend MUFG unit's primary dealer status for a month - sources

TOKYO, July 13 (Reuters) - Japan’s finance ministry plans to suspend the primary dealer status given to Mitsubishi UFJ Morgan Stanley Securities for one month effective July 18, according to sources close to the matter.

The suspension will take place after a Mitsubishi UFJ Morgan Stanley Securities employee was found to have manipulated prices in Japanese government bond (JGB) futures trading.

Mitsubishi UFJ Morgan Stanley Securities will not be allowed to participate in the so-called “non-price competitive auctions”, which allow primary dealers to buy newly-issued JGBs at advantageous prices, the sources told Reuters.

A spokesman at Mitsubishi UFJ Morgan Stanley Securities declined to comment.

Primary dealers are required to buy certain amounts of JGBs the Ministry of Finance (MOF) sells at auctions. The obligation comes with a perk of being able to exchange views directly with the MOF at primary dealer meetings.

Mitsubishi UFJ Morgan Stanley Securities is a unit of Mitsubishi UFJ Financial Group, Japan’s biggest banking corporation. (Reporting by Takaya Yamaguchi; Writing by Tokyo markets team; Editing by Muralikumar Anantharaman)

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