Trading
ToSTNeT Market
Update : Mar. 02, 2012
Since its launch in 1998, the ToSTNeT (Tokyo Stock Exchange Trading NeTwork) system has offered investors a means of executing various transactions such as block trading and basket trading during off-auction hours. The main purpose of ToSTNeT has been to complement the auction market by handling orders for which smooth execution is difficult using the auction algorithms. ToSTNeT first started with single stock trading (known as block trading until September 30, 1999) and basket trading in June 29, 1998 (ToSTNeT-1), and closing price trading was introduced later on August 7 of the same year (ToSTNeT-2).
However, various developments in trading technology during recent years have spurred investors' demand for increased flexibility in this system. To meet this demand, ToSTNeT was re-established as a market separate from the auction market on January 15, 2008. Trading hours have been extended to cover auction market hours, and own share repurchase trading (ToSTNeT-3) has also been introduced. In addition, trading rules and regulations were amended to enable a greater diversity of eligible products.
Listing
Domestic stocks, foreign stocks, and convertible bonds (CBs) listed on the auction market are simultaneously listed on the ToSTNeT market.
Summary of ToSTNeT Market (as of Nov. 21, 2011)
Four types of trading are available on ToSTNeT
- Single stock
- Basket
- Closing price
- Off-auction own share repurchase (Since Jan. 15, 2008)
Single Stock Trading (ToSTNeT-1)
Trading participants can trade the minimum trading unit or more of a single stock with a designated counterpart within 7% above or below the last price in the auction market (in case the amount obtained by multiplying the last price in the auction market by 7% is below JPY5, the range will be JPY5 above or below the last price in the auction market). The trading participant must specify matching conditions such as the counterpart (trading participant name), name of the stock, and number of shares. Orders are executed when price quotations match, and cross orders from the same trading participant are immediately executed at the quoted price. By using ToSTNeT-1, investors can minimize the impact of large orders and other transactions that are difficult to execute in the auction market.
Basket Trading (ToSTNeT-1)
Trading participants can trade a basket of a minimum of 15 stocks valued at least JPY100 million with a designated counterpart. Basket trading can be made at a price within 5% above or below the base price, calculated from the most recent prices of the stocks in the auction market. The trading participant specifies matching conditions such as the counterpart (trading participant name), names of the stocks, and number of stocks. Orders are executed when price quotations match, and cross orders from the same trading participant are immediately executed at the quoted price.
Closing Price Trading (ToSTNeT-2)
Trading participants can trade single stocks at the closing price or VWAP in the auction market on a first come, first served basis. ToSTNeT-2 enables investors to first check the closing price then trade single stocks in order to re-balance their portfolio, or to execute multiple stock transactions that do not meet basket trading criteria. It can also be used in cases when certain orders fail to be executed in the auction market (for example, if the investor received no allotment in the closing auction at the limit price, if the market closed at a special quote price resulting in no closing auction, or if the investor failed to acquire the targeted number of stocks in basket or VWAP trading.) ToSTNet-2 is also available for repurchasing own shares.
Off-Auction Own Share Repurchase Trading (ToSTNeT-3)
ToSTNeT-3 is a system specifically for transactions in which listed companies reacquire their own shares. The buy side is reserved exclusively for the listed company itself, and sell lots equivalent to buy lots are distributed according to allocation methods prescribed by the TSE (described in the chart below) at 8:45am.
Details of ToSTNeT Trading
| Types of Trading | Single Stock | Basket | Closing Price | Off-Auction Own Share Repurchase | |
|---|---|---|---|---|---|
| VWAP Guarantee Trading(*1)•VWAP Target Trading (*2) | |||||
| Eligible Stocks | Domestic stocks, foreign stocks, and CBs | Domestic stocks, foreign stocks, and CBs | Domestic stocks, foreign stocks, and CBs | Domestic stocks, foreign stocks, and CBs | Domestic stocks and foreign stocks |
| Hours | 8:20am-5:30pm | 8:20am-9:00am Previous day VWAP (VWAP target N/A) 11:30am-0:30pm Morning session VWAP 3:00pm-5:30pm Afternoon session/All day VWAP |
8:20am-5:30pm | 8:20am-8:45am 11:30am-0:15pm 3:00pm-4:00pm (Orders are accepted from 8:20am to 4:00pm) |
8:45am (Sell orders are accepted from 8:00am to 8:45am) |
| Minimum Trading Unit | Same as auction market | Same as auction market | Minimum of 15 stocks valued at least JPY100 million | Same as auction market | Same as auction market |
| Price | Within 7% above or below the last price (or last special quote price or last sequential trade quote price) in the auction market | VWAP Guarantee: Pre-arranged net price of VWAP VWAP Target: VWAP-aimed VWAP of execution result that targets VWAP at the auction market(net price incl. brokerage commissions is also available) |
Within 5% above or below the last prices of the designated stocks in the auction market | 8:20am-8:45am •Closing price of previous day (*or last special quote price or last sequential trade quote price. If neither is available, the base price of that day)•Previous day VWAP 11:30am-00:15pm •Morning session closing price(*) •Morning session VWAP 3:00pm-4:00pm •Closing price of that day(*) •Afternoon session VWAP or that day's VWAP |
•Closing price of previous day (or last special quote price or last sequential trade quote price. If neither is available, base price of that day) |
| Quote | Stocks:integral multiple of 1/10000 JPY CB:integral multiple of 1/100 times JPY0.01 per JPY100 in par value Trade between same or different participants |
Stocks:integral multiple of 1/10000 JPY CB:integral multiple of 1/100 times JPY0.01 per JPY100 in par value Cross trading between same participant Only |
Stocks:integral multiple of 1/10000 JPY Trade between same or different participants |
Closing Price: Same as auction market VWAP: VWAP released by TSE VWAP For cross orders only |
Same as Auction Market Allocation priority 1st:Agency Order 2nd:Principal Order allocate per trading participant |
| Trading Method | Specify matching condition such as the matching counterpart (Trading Participant name), name of the stock, and number of stocks, and orders are matched when the quoted prices of each order match. Cross orders by the same participant are matched at the quoted price. | Time Priority basis (Cross orders have highest priority) |
ï½¥Agency orders have highest priority •Allocate the minimum trading unit per trading participant in descending order according to the amount of orders. Multiply the balancing amount of each participant by the allotment ratio (buy order balance/total sell order balance) and allocate the integral result (dropping decimals). Allocate minimum trading unit in descending order according to the number after the decimal is dropped. |
||
| Settlement | •T+3 •T+0(Transaction between the same participant only) |
T+3 | |||
| Margin Trading/Stock Lending | Yes | No | |||
- (*1)VWAP guarantee trading…A type of transaction that aims to guarantee VWAP-based executions. Cross-match with clients' sell or buy order at the pre-arranged VWAP net price (brokerage commissions included).
- (*2)VWAP target trading…Aiming for VWAP, traders execute transactions in the auction market in which the name/number of stocks are pre-arranged, and cross-match with clients' sell or buy orders at the VWAP of the execution result. Transactions at the VWAP net price of clients' execution results (brokerage commissions included) are also available.
Trading Information Disclosure
Transaction details of each stock, the total trading volume, and the total trading value are disseminated via the TSE Market Information System.
Others
- IPO stocks are not eligible for ToSTNeT trading until the first price has been determined in the auction market.
- ToSTNeT stocks are subject to trading halts if the trading halt occurs in the auction market and/or there is important corporate information that needs to be disseminated.
- Please refer to the link below for more information on own share repurchases using ToSTNeT-2 or ToSTNeT-3 (Japanese).