Key Facts
• Japan Securities Dealers Association (JSDA) and Japan Exchange Group (JPX) are discussing anti-fraud measures.
• Focus is on preventing “spoofing,” a practice of placing and canceling fake orders.
• Discussions include revising trading guidelines and enhancing training for financial institutions.
• JSDA collaborates with the Financial Services Agency to regulate securities firms.
• JPX operates bond futures trading on the Osaka Exchange and has its own regulatory body.
• In 2021, Nomura Securities was fined ¥21.76 million for illegal bond futures trading.
• Current guidelines, established in 2020, are under review for the first time.
• Approximately 80 companies were surveyed on internal monitoring practices earlier this year.
• JPX plans to continue educational efforts and clarify management systems.
• Spoofing also affects other financial products, including equities.
Summary
The Japan Securities Dealers Association (JSDA) and Japan Exchange Group (JPX) are collaborating to strengthen measures against fraudulent trading practices, particularly “spoofing,” in bond futures and other derivatives markets. Spoofing involves placing fake orders to manipulate market perceptions. Discussions include revising trading guidelines, enhancing training, and improving internal monitoring systems. This initiative follows a 2021 case where Nomura Securities was fined ¥21.76 million for illegal bond futures trading. Current guidelines, established in 2020, are under review for the first time, with no set timeline for completion. JPX also aims to educate market participants on best practices while avoiding overly restrictive regulations. The measures could benefit traders by clarifying rules and reducing risks of unintentional violations. Additionally, JPX is considering extending these efforts to other financial products, such as equities.
