Update : Oct. 02, 2008
The Tokyo Stock Exchange (TSE) has decided to establish a new remote trading participant system. Currently, the only entities eligible to become trading participants are domestic or foreign financial instrument trading firms as well as registered financial institutions such as banks. However, the new system will allow entities legally defined as foreign securities firms that do not have any branches within Japan to apply to become remote participants.
The TSE will apply its current examination criteria mutatis mutandis when approving qualifications for remote trading participants. Remote trading participants will have to entrust other securities companies with clearing operations and will be required to enter into a clearing entrustment agreement with a Japan Securities Clearing Corporation clearing participant.
The rights and obligations of remote trading participants will be basically the same as ordinary trading participants. However, there are some restrictions. For instance, remote trading participants will be prohibited from executing customer orders from investors residing in Japan in the TSE market.
As more than 60% of the trades on the TSE market are currently made by overseas investors, the TSE anticipates that this system will meet foreign countries' latent need to have direct access to the TSE market. The TSE hopes that, with the introduction of the new system, numerous firms such as market makers and principal account traders will begin to participate in the TSE market directly.
The new system is scheduled for implementation in December 2008.