New Office at JPX to Enhance Monitoring of Cross-Border Transactions

Japan’s leading financial trading bourse, the Japan Exchange Group (JPX), has announced that its self-regulatory unit, Japan Exchange Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term (JPX-R), plans to establish an International Surveillance Office (ISO), which will be operational from September 1, 2015.

The regulatory unit, which began conducting self-regulatory operations for the Tokyo Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term in 2007, broadened its scope to account for the merger of the Tokyo Stock Exchange and the Osaka Securities Exchange to become JPX in 2013.

In line with legislation, JPX-R’s self-regulatory operations cover a broad range of investigations and examinations into compliance with laws and regulations, and decisions on disciplinary actions to deter unfair acts.

The new ISO will be a specialized unit, which has been created to conduct market surveillance of cross-border transactions.

The move comes as the global regulatory environment places greater onus on exchanges, banks and trading firms to monitor and report on orders, trades and e-communications in an effort to snuff out market abuse.

Moreover, orders originating from outside Japan are on the rise, accounting for the majority on the Tokyo Stock Exchange and Osaka Exchange markets, prompting the need for greater vigilance.

This is arguably accentuated by the recent launch of “JPX-SGX Co-Location Direct” from KVH, which gives traders access to direct, low latency data connections between the Singapore Exchange and the Tokyo Stock Exchange.

Accordingly, JPX notes that “the new ISO unit will prepare JPX-R for changes in the market environment and market dynamics due to factors including the spread of high frequency trading (HFT).”

Specifically, ISO will be engaged in the following activities:

• Conduct market surveillance of cross-border transactions such as global offerings
• Exchange information related to market surveillance with foreign SROs
• Research regulations and trends outside Japan regarding unfair trading
• Enhance communication with market users outside Japan
• Advance JPX Asian Strategy