Virtu Financial registers as HFT in Japan

Virtu Financial’s Singapore entity gains regulatory approval to operate a high-speed trading business in Japan.

US-based market maker Virtu Financial has gained regulatory approval to operate as a high-frequency trading (HFT) firm in Japan.

Virtu Financial’s Singapore entity was among the first round of HFT and market maker firms to gain regulatory approval from Japan’s Financial Services Agency (FSA), after new rules were introduced in April to improve controls for HFTs.

The FSA’s HFT regulation now requires firms such as Virtu Financial to register as a ‘high-speed trading’ (HST) business and demonstrate risk management processes.

Virtu said it strongly supported the FSA’s HST proposal and commended its efforts to improve market transparency, risk controls and system safeguards through its comment letter.  

“We applaud the expediency with which the FSA was able to propose, approve, and implement this important enhancement to the market’s safeguards,” commented Brett Fairclough, managing partner for Asia-Pacific at Virtu Financial.

“Virtu’s early HST registration demonstrates our commitment to transparency across the more than 235 markets in which we trade around the world.”

The company added that it has consistently supported registration for participants that access financial markets and enhancements to multi-layer pre-trade and post-trade risk control requirements.

HFT firm Flow Traders confirmed it had also gained regulatory approval to operate a high-speed trading business in Japan earlier this month. The registration means the company can participate in a newly-established exchange-traded fund (ETF) market maker programme.

Flow Traders added that it believes it can contribute significantly to the future growth of the ETF market in Japan via the scheme, which went live on 2 July this year.