Enrico Bruni

Specifically, the link will be between Tradeweb and TSE’s RFQ platform CONNEQTOR. 

According to the businesses, this will “allow Tradeweb buy-side clients to include CONNEQTOR liquidity providers when launching a trade enquiry on the Tradeweb Japan-listed ETF marketplace”. 

Enrico Bruni, head of Europe and Asia business at Tradeweb, said: “This exciting collaboration between Tradeweb and TSE’s CONNEQTOR platform demonstrates our focus on linking liquidity pools for the benefit of institutional investors looking to transfer risk with a higher degree of certainty. 

“We are in the business of enhancing clients’ execution experience, and we look forward to bringing more time and cost efficiencies to investors trading Japanese ETFs, both locally and globally.”

The first transaction on new connectivity has already taken place with Global X Japan having been the first to execute.

Through the direct link, clients can submit orders from the Tradeweb user interface to CONNEQTOR’s list of market makers as well as to Tradeweb’s network of liquidity providers. 

Transactions with CONNEQTOR market makers will be cleared and settled through the post-trade infrastructure of TSE.

“CONNEQTOR has been developed as a platform to enable investors to trade ETFs ‘faster and cheaper’. We hope that the new connection with Tradeweb will promote investment in the Japanese market by allowing investors outside Japan, who have had difficulty using CONNEQTOR, to easily access ETFs listed on the Tokyo Stock Exchange from overseas,” added Moriyuki Iwanaga, president of Tokyo Stock Exchange.

“TSE will continue to strive to provide and develop a highly convenient market environment, where investors can enjoy better prices and smoother execution.”

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Tokyo Stock Exchange (TSE) and Broadridge Financial Solutions have launched a new direct connection, between TSE’s ETF trading platform, CONNEQTOR, and Broadridge’s EMS, Xilix.

Broadridge’s EMS solution provides a request for quote (RFQ) functionality for institutional investors looking to trade a particular ETF at a particular quantity. Users can send out RFQ’s to a large number of market makers through the offering.

The move is set to enable asset management businesses to reach the ETF trading platform directly from Xilix, allowing for increased efficiency in their processes.

Hiroki Kawai, senior executive officer at TSE, said: “CONNEQTOR was developed as a platform to enable investors to trade ETFs ‘faster and better priced’ and this launch of a direct connection with Xilix, Broadridge’s EMS, will allow institutional investors to trade with even greater convenience.

“We will continue our efforts to further develop an even more highly convenient market environment that enables smoother execution and better pricing for investors.”

Read more – Broadridge and CQG partner to integrate EMS and OMS

Raymond Tierney, president of Broadridge trading and connectivity solutions highlighted the importance of this move given the complexity of global markets.

“Businesses require solutions that enable automated workflow, capture growth opportunities, integrate seamlessly with internal and external systems, meet regulatory obligations, and streamline operations and we will continue our efforts to solve the issues faced by institutional investors,” he said.

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The TSE has also made a 5% minority investment into Blue Ocean Technologies with the transaction expected to close next month.

BOT will be provided with transparent and efficient trading access in Japan by TSE, leveraging the stock exchanges’ expertise on Japanese market structure and regulation.

TSE stated that it intends to offer cross-border trading opportunities of Japanese equities to  Blue Ocean ATS’ client base.

“Our partnership with the Tokyo Stock Exchange is both a strategic development for Blue Ocean and for all Japanese investors, providing them the opportunity to trade US stocks during their daytime hours,” said Brian Hyndman, president and chief executive of BOT.

“Furthermore, we are very excited to have a global capital markets leader like the TSE validate our business model with their investment, which will contribute to our overall business growth, technology and infrastructure development while providing new trading choices and transparency for local Japanese investors.”

The new alliance will allow Blue Ocean technologies to expand its Asia-Pacific footprint, as it enters the Japanese market for the first time. This will build upon BOT’s existing presence in other key APAC markets including South Korea and Hong Kong.

“Blue Ocean ATS is a unique and ambitious US equities trading venue operating in the Asian time zone, and we are looking forward to working with them,” said Hiroki Kawai, senior executive officer at TSE.

“We hope to expand the business and customer base of both Blue Ocean and TSE to provide a variety of investment opportunities to investors in both Japan and the US.”

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Prior to this, TSE had four market divisions: 1^st Section, 2^nd Section, Mothers and JASDAQ (Standard and Growth), which it maintained following TSE and Osaka Securities Exchange’s decision to integrate their cash equity markets in 2013.

However, two issues regarding the previous market divisions led TSE to decide to restructure. This included issues with the divisions being too ambiguous, reducing convenience for many investors.

In addition, TSE found that the market divisions were not providing sufficient incentives for listed companies to sustainably increase corporate value.

The three new market segments which have just been implemented provide clearer concepts and listing criteria.

The Prime Market segment has been described by TSE as the market oriented to companies which centre their business on constructive dialogue with global investors.

Meanwhile, the Standard Market is aimed at companies with sufficient liquidity and governance levels to be investment instruments.

Lastly, the Growth Market segment targets companies with high potential growth.

“This market restructuring is aimed at helping boost listed companies’ sustainable growth and mid- to long-term corporate value, thereby providing attractive markets that have the approval of many global and domestic investors,” said Kiyota Akira, director and representative executive officer, group CEO of Japan Exchange Group.

“Now, with the launch over, TSE will carefully and meticulously monitor the situation, ensuring the three new market segments are able to appropriately support listed companies in increasing corporate value and are attractive to investors, and will make changes where necessary.”

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If the proposed extension goes ahead, it will be the first such change to cash equity trading hours in more than a decade. The last time closing times for the exchange were extended was in 1954, when they changed from 14:00 to 15:00 local time.

The extension means that the market would close half an hour later at 15:30 local time.

TSE currently trades between 09:00 and 15:00 local time, with a lunch break between 11:30 and 12:30.

It started discussing the possibility of extending trading hours after a system failure in October 2020, which caused trading to be suspended for the whole day.

The proposed extension aims to secure trading opportunities on the day that a system failure occurs and to improve overall resilience.

Considering that trading hours are much shorter than those in Europe, the US, and other Asian countries, extending them will give investors increased trading opportunities and improve market convenience.

“It was inevitable that this was going to happen to bring TSE in line with other market centres in Asia which have longer hours of trading,” said Serdar Armutcu, head of electronic trading at Mita Securities in Tokyo. Armuctu expects extended trading hours will attract additional liquidity to the exchange.

The extension will not only improve resiliency, but also strengthen the functionality and competitiveness of Japanese markets in the world for the medium to long term.

TSE last made changes to trading hours in 2011 when it reduced its lunch break by 30 minutes to the current one hour.

In 2014, a previous recommendation for the exchange to consider adopting an evening session for trading failed to result in any changes. Traditional brokerages who opposed longer hours due to increased costs, lobbied against the suggestion, resulting in the plans being dropped.

Alongside the extension of trading hours, TSE will also discuss the introduction of a five-minute closing auction, which has been adopted by several overseas exchanges, including the London Stock Exchange, to determine the closing price of each stock.

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The appointment of Moriyuki Iwanaga as director will be proposed at the annual general shareholders meeting in June this year, and he assumes the role of executive officer on 1 April.

Alongside the appointment of Iwanaga, JPX has appointed Hiromi Yamaji to head up its Tokyo bourse, also effective on 1 April.

Iwanaga joined the JPX group in 1984 and has spent the last 37 years serving across its various bourses.

Most recently, he served as a director and senior executive vice president of the Japan Securities Clearing Corporation (JSCC) both of which are roles he will retire from on 31 March to assume the role of director at a group level.

Yamaji began his financial career at Nomura in 1977, spending 30 years at the investment bank and ending his tenure at the company as executive vice president of the global investment banking business.

He joined JPX in 2013 as a company director and president of the Osaka Exchange, a role which he will be stepping down from.

Yamaji will replace the TSE’s former CEO Miyahara Koichiro, who stepped down in December following the exchange experienced its worst ever outage in October.

“Miyahara Koichiro, director, and representative executive officer, group co-COO of JPX, has taken seriously his responsibility for the failure in the arrowhead cash equity trading system that occurred on October 1, 2020,” said JPX in a December statement.

The technical failure was worsened by the fact that it fell upon a day when many funds were rebalancing their portfolios and the first day of the new quarter for the second half of Japan’s fiscal year.

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TSE’s parent company, Japan Exchange Group (JPX), confirmed that president and CEO of the Tokyo exchange, Miyahara Koichiro, has requested to resign from his position effective immediately.

JPX has accepted the resignation and group CEO of the JPX, Kiyota Akira, will take over as head of TSE.

“Miyahara Koichiro, director, and representative executive officer, group co-COO of JPX, has taken seriously his responsibility for the failure in the arrowhead cash equity trading system that occurred on October 1, 2020,” said JPX in a statement.

The leadership reshuffle follows the TSE market blackout caused by a hardware malfunction on its cash equities system arrowhead. The exchange attempted and failed to switch to backup hardware due to a glitch, however, this did not work as intended and forced it to shut down trading in all listed symbols for the entire day.

The technical failure fell upon a day when many funds were rebalancing their portfolios and the first day of the new quarter for the second half of Japan’s fiscal year.

Earlier this year, the chief information officer at the New Zealand Exchange resigned one month after the markets operator suffered a cyber-attack that forced it to close for four days.

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The Japan Exchange Group (JPX), the Tokyo exchange’s parent company, said in a statement on Thursday that a switch to a backup hardware due to a glitch had not worked as intended, forcing it to shut down trading in all listed symbols.

The Tokyo Stock Exchange is on track to resume trading on the arrowhead system, auction market and ToSTNeT (Tokyo Stock Exchange Trading NeTwork) from Friday, JPX added in its most recent statement on the issue.

JPX stated on Thursday there would be no execution in the auction market for the rest of the day, and some execution information had been sent as FLEX market information for some symbols, however, the information was invalid.

It added that pre-ordered orders, which were sent to arrowhead by the trading halt, will not be taken over tomorrow. In the ToSTNeT market, the exchange confirmed that orders sent by 8:56 am JST were executed successfully, and the Execution Completion Notice Messages were distributed.

The technical failure, which has forced thousands of companies to halt buying and selling activities, has fallen on the day when many funds rebalance their portfolios and the first day of the new quarter for the second half of Japan’s fiscal year.

“The TSE sincerely apologises for any inconvenience caused to investors and the people related to the stock market,” the exchange stated.

The post Blackout at Tokyo Stock Exchange as critical malfunction hits cash equities system appeared first on The TRADE.

The new dataset will provide clients with five years of historical data across 3,700 Japanese yen-denominated (JPY) equities, including daily breakdowns of trading volume and trading value data for all TSE-listed stocks.

“We are excited to be working with and developing market data solutions with IHS Markit. We think the combination of our exchange short data with IHS Markit’s stock loan provides a unique view of Japan’s equity market for investors and encourages their investment.”

The TSE dataset includes fragmented data extracted from daily trading value and volumes of TSE-listed issues based on flags for margin transactions and short selling that are attached to orders at the time of placement, TSE added.

“Our collaboration with TSE creates the industry’s first dataset for analysing short selling in tandem with securities finance flows, inventory, and loan activity,” said IHS Markit managing director and global head of securities finance, Paul Wilson.

“We believe this dataset is essential for anyone trading in Japan and looking to increase their alternative data and fundamental analysis factors. With more than 100 data fields, the analytics toolset introduces the first holistic view on Japanese securities finance, delivering a higher information ratio for both long and short portfolio construction.”

Earlier this month, IHS Markit confirmed that it would be partnering with the fixed income market data provider BondCliQ to embed US corporate bond pricing data with its investment management platform, thinkFolio.

The partnership will see IHS Markit’s thinkFolio clients gain click-to-view, consolidated, and pre-trade institutional bond quote data from 34 dealers, as well as post-trade and normalised TRACE data.

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