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JPX to register and monitor high frequency traders

First Published 5th December 2016

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Tokyo - Japan Exchange Group (JEG), which runs the country's two most important exchanges, the Osaka Securities Exchange and Tokyo Stock Exchange, has announced plans to both register and monitor high frequency traders (HFT).

This follows pressure from Japan's main regulatory body, the Financial Services Agency (FSA). The FSA will establish the registration system, which will help identify HFT orders and trades.

Foreign HFT firms won't escape the net, as brokerages will be asked to help identify their activity. Ultimately, unregistered traders or those which lack appropriate risk management will be prevented from placing orders.

Japan's move is not without precedent, as the EU has already announced plans to register HFTs beginning in 2018 as part of MiFID 2.

Within the EU, Germany has already had this requirement since 2012 (often referred to as the "German HFT Law"). Many other exchanges, including the CME Group exchanges, require a similar tagging of orders these days.