Retail-focused Japanese proprietary trading system (PTS) Kabu.com has said it will cease operations from next month, citing a change in the trading environment sparked by the new trading platform launched by the Tokyo Stock Exchange (TSE) last year.
The PTS, which is owned by Japanese bank Mitsubishi UFJ, plans to close on 31 October. According to a statement from the firm, the introduction of the TSE's arrowhead trading platform in January 2010 has weakened the environment for PTSs.
Mitsubishi UFJ estimates that the closure will lead to an extraordinary loss of ¥2.6 billion (US$33.91 million). The cost of operating the platform is around ¥600 million (US$7.8 million) per month, according to the firm.
Kabu.com began trading – initially in the evening – in September 2006, but has failed to attract any significant amount of market share.
According to Thomson Reuters Equity Market Share Reporter, Kabu.com has traded no more than 0.07% of Japanese stocks this year. In contrast, Chi-X Japan, the PTS launched by market operator Chi-X Global in July 2010, commanded a market share of 2.31% as Japan's largest alternative platform in August. SBI Japannext, another PTS, secured a 2.27% market in August, up from 2.08% in July.
Since January, the TSE has lost around 3% of its market share, accounting for 90.55% in August.