Brokerages operating in Japan are working to encourage unbundling in the world's second largest economy with the aim of achieving flexible payment systems for execution and research costs.

The moves follow on from those introduced in 2006 in the UK by the Financial Services Authority, which require fund managers to limit commission payments to the purchase of research and execution services, ending the common practice of paying for screen-based information services such as Reuters or Bloomberg via commission. Managers also have to give clients a regular breakdown of payments, showing how much was spent on research and how much on execution.

The change was introduced as the previous method of bundling commissions raised questions about whether the clients of asset management firms were getting value for money from the commissions paid.