The Tokyo Stock Exchange (TSE) has introduced a new remote membership scheme designed to allow Hong Kong-based broker-dealers to trade directly into Japan for the first time.
The scheme, under which Hong Kong regulatory body the Securities and Futures Commission (SFC) of Hong Kong has authorised the TSE as a provider of automated trading services (ATS), means that broker dealers who are licensed in Hong Kong will now be able to trade on the TSE, upon obtaining the necessary trading qualifications from Japanese regulator the Financial Services Agency. The TSE is the first financial instruments exchange in Japan to obtain authorisation as an ATS provider from the SFC.
A spokesman for the TSE said the new rules removed the need for institutional investors needed to set up an office in Japan to trade. He added that the new measure was expected to increase liquidity at the TSE, by bringing Hong Kong-based investors into the market.
The Tokyo venue launched its Arrowhead trading platform in January this year to facilitate high-frequency and electronic trading. Increasing the level of high-frequency trading flow and competition from proprietary trading platforms, such as Chi-X Japan which launched on 29 July 2010, have been the motivation behind a number competitive investments made by the TSE in recent months.