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Revision of Trading Rules

Update : Jan. 04, 2010

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Revision of Trading Rules at the Time of Launching arrowhead

The TSE has revised trading rules based on feedback, etc. from market-related parties in order to simplify trading rules and business practices, and at the same time facilitate smooth price formation and increase liquidity. The revisions coincided with the time of launching arrowhead.
The actual revisions aimed at improving convenience include revising the allocation rules for simultaneous bids or offers, abolishing half-holidays, as well as reducing tick sizes, revising daily price limits and special quote renewal price intervals, and relaxing the matching conditions when determining the opening price and during stop allocation.
For details, please refer to the following summary of the revisions.

Revisions to Trading Rules at the Time of Launching "arrowhead" (Japanese Summary,announced Apr.28,2009) PDF
Revisions to Trading Rules at the Time of Launching "arrowhead" (Summary) PDF

For the public comment on the item "Tokyo Stock Exchange to revise trading rules at the time of launching 'arrowhead'", please refer to the following link.

In conjunction with these revisions, handling of operations related to the expansion of price limits and the trading of directly-listed stocks have been partially revised as follows.

1. Operational Changes related to Expansion of Price Limits

Previously, when there had been 3 consecutive days of closing at the daily price limit (high or low), and, in addition, trading cannot be executed without conducting allocation of orders at the daily price limit, from the following day price limits are expanded. The changes after the launch of arrowhead are as listed below.


  • When any of the following has occurred for three (3) consecutive days, price limits will be expanded from the following day;
    (1) Close at the upper or lower daily price limit, and in addition, trading volume is 0 shares without conducting allocation of orders at the daily price limit
    (2) Trading volume remains at 0 shares until the end of the afternoon session, and there is execution only at the upper or lower daily price limit at the close of the afternoon session, and, in addition, there are left over bids/offers at the daily price limit.

Furthermore, the expansion of the daily price limits will be removed in the same manner as before. When a transaction is executed at a price other than the limit price in the end of the price range which was expanded, the daily price limits will be narrowed so that it returns to normal.

2. Handling of Operations related to Trading of Directly-Listed Stocks

(1) Revision of Possible Order Acceptance Range
The alteration to the price range for order acceptance of a directly-listed stock before its initial price has been determined is as follows.


After arrowhead Launch Old Rule
Upper Limit Central price in the order book × 4 Central price in the order book × 4 + Price limit
Lower Limit Central price in the order book ÷ 4 Central price in the order book ÷4 - Price limit
  • (*)If the resultant price is less than a tick size, such price will be rounded up to the nearest tick size.

(2) Revision of Quoting Operations before the Initial Price is Determined
As a general rule, the alteration to quoting operations for a directly-listed stock before its initial price is determined is as follows.


After arrowhead Launch Old Rule
Upper Limit of Special Quote Renewals The limit shall be set at 2.3 times the initial special quote price. Quote renewal shall be conducted in consideration of supply and demand, and at intervals of 5% of the public offering price (10-minute renewal intervals), or at regular special quote price renewal intervals (5-minute renewal intervals). The limit shall be set at around 2 times the initial special quote price. Quote renewal shall be conducted in consideration of supply and demand, and based on 10%, or 5% of the initial special quote price, or at the regular special quote price renewal intervals.
Lower Limit of Special Quote Renewals The limit shall be set at 0.75 times the initial special quote price, with quote renewal at the regular special quote price renewal intervals (5-minute renewal intervals). The limit shall be set at around 0.75 times the initial special quote price, with quote renewal conducted at the regular special quote price renewal intervals.

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