TOKYO, June 24 (Reuters) - Japan's banking regulator on

Monday ordered the banking and securities units of Mitsubishi

UFJ Financial Group ( MUFG ) to improve compliance

measures after Japan's securities watchdog found multiple

breaches of "firewall" regulations.

The penalties come less than two years after the securities

arm of rival megabank Sumitomo Mitsui Financial Group ( SMFG )

was indicted on market manipulation charges, for which it was

ordered to halt the offending business line and improve

compliance.

The Financial Services Agency, which hands out such

penalties, ordered each of the MUFG units to establish the

causes of the breaches and submit business improvement plans to

prevent recurrence.

The Securities and Exchange Surveillance Commission

recommended in mid-June that MUFG Bank and the group's two

securities tie-ups with Morgan Stanley ( MS ) be penalised for

the unauthorised sharing of client information.

Its investigation found at least 26 occasions where

confidential information had been shared between MUFG Bank and

one of the group's two securities firms - Mitsubishi UFJ Morgan

Stanley Securities and Morgan Stanley MUFG Securities.

Japan's "firewall" regulations prohibit banks and securities

companies in the same group from sharing customer data with one

another without the customer's consent.

(Reporting by Anton Bridge; Editing by Himani Sarkar and

Lincoln Feast.)