Table of Contents

Questions and Answers

What is a PTS?

A PTS (Proprietary Trading System) is an electronic trading system that allows investors and brokers to trade securities outside of the exchanges. With the enforcement of amendments to Securities and Exchange Act (the present-day Financial Instruments and Exchange Act: FIEA) in December 1998, the requirements to trade securities only through stock exchange were abolished and thereby allowed securities companies to open and operate a PTS to trade listed securities off-exchange with an authorization from the Japanese government.

Where can I find information (e.g. price) about PTSs?

Please refer to the PTS Information Network website established by JSDA (Japan Securities Dealers Association).

What securities are traded at Japannext PTS?

The securities that we designate among those listed in Japanese stock exchanges are traded at our venue. For more details, please refer to the Securities page.

On what days is Japannext PTS closed?

Saturdays, Sundays, national, observed, and exchange holidays, December 31st to January 3rd.

What are the trading hours at Japannext PTS?

Day-time session is open from 8:20 a.m. to 4:00 p.m. on every business day. Night-time session is open from 4:30 p.m. to 11:59 p.m. on every business day.

Do the stock prices at Japannext PTS differ from other PTSs?

On a PTS, trading rules and operations are executed individually by each of the operating firms. Therefore yes, Japannext PTS’s stock prices may differ from other firms. (Just like stock prices of a stock that is listed on multiple exchanges may differ in each exchange, stock prices may differ in each PTS.)

How can I know when trading is halted at Japannext PTS?

Please refer to the Trading Halt page.

What is the matching rules/processes used at Japannext PTS?

All our markets are order driven. Prices are determined by the publication of orders to buy and sell shares. The limit orders we allowed are processed in accordance with the following principles:
  • Principle of Price Priority
    • For the sell order, an order at a lower price has higher priority than an order at a higher price.
    • For the buy order, an order at a higher price has higher priority than an order at a lower price.
  • Principle of Time Priority
    When there are orders with the same limit price, the order that we accepted earlier has higher priority.
At Japannext PTS there is no special quote renewal system, a system in which a special quote is indicated for an order that exceeds a certain price range from the last execution order and prevent it from being executed, which is adopted at the exchanges. Therefore, when a new order’s limit price matches with orders already resting in the order book of the PTS, it will be immediately executed at the limit price of the book. Matching will continue until all of the crossed quantity is executed in full. The remaining shares will be processed according to the order’s instructions.

Does Japannext PTS support market orders?

We only allow limit orders. For the variation of limit orders, please refer to the Supported order types.

Are there restrictions on the amount of tradable orders and/or money at Japannext PTS?

Among the securities traded at Japannext PTS, per order quantity is up to 5% of the total number of outstanding shares listed at the exchanges. An order with a quantity exceeding this limit will be rejected by Japannext PTS.
The standard order value limit is 100 million JPY per single order. An order with a value exceeding this limit will be rejected by Japannext PTS.
However, the 100 million JPY limit can be extended to 2.5 billion JPY by using the special order confirmation flag in an order message.

Can a placed order be cancelled at Japannext PTS?

Yes, an unexecuted order can be cancelled in a similar way to an order placed through the exchanges.

When are the contract and settlement dates at Japannext PTS?

Contract date T is on the day that the transaction is made. Settlement date is as follows:
  • Daytime market: T + 3 business days
  • Nighttime market: T + 4 business days

What is the procedure for clearing and settlement at Japannext PTS?

JSCC (Japan Securities Clearing Corporation) is designated as a clearing entity for Japannext PTS and all trades executed on Japannext PTS are handled by JSCC and cleared in accordance with the JSCC business rules.

All settlement processing is done through JASDEC (Japan Securities Depository Center).

Is margin trading allowed at Japannext PTS?

No. We only accept cash transactions.

Does Japannext PTS have stock daily upper and lower limits like the exchanges?

Yes, in order to limit the fluctuations in stock prices, we set our price ranges essentially to the same as the exchanges.
For more details, please refer to the Japannext PTS Trading Rules

Does the tick size at Japannext PTS differ from the exchanges?

Yes, tick size at Japannext PTS differs among each market (J-Market, X Market and U Market).
For more details, please refer to:

Do the stock lot sizes at Japannext PTS differ from the primary exchanges?

Our stock lot sizes are never smaller than at the primary exchange and may differ as follows:
  • Trading lot becomes 10 if the original trading lot is less than 10 and its base price is equal or less than 6,000 JPY.
  • Trading lot becomes 10 if the original trading lot is less than 10 and its base price is above 6,000 but its lower limit price of the day is equal to or less than 5,000 JPY.
Lot Size Adjustments

How can I participate in Japannext PTS?

  • Individual investor
    You can participate in trading through a tradable account of trading participants (securities companies) at Japannext PTS. Please note that we do not allow an individual investor to directly open an account at our venue.
  • Institutional client
    You can participate in trading through a tradable account of trading participants (securities companies) at Japannext PTS. Please note that we do not allow an institutional client to directly open an account at our venue.
  • Trading participant (securities company)
    A domestic Type I Financial Instruments Business Operator who is also either a clearing participant of JSCC or an entity who can entrust brokerage for clearing to a clearing participant is eligible to our internal review for participating in Japannext PTS. The entity who passed the review can create a new account at our venue.

Are there any restrictions I should be aware of in terms of trading at a PTS which falls under the category of off-exchange transaction?

Same FIEA regulations applied to transactions at the exchanges apply to transactions at a PTS.

Market manipulation restrictions
A trading at PTS is an off-exchange transaction and is subject to market manipulation restrictions in the same way as a trading at exchange. For instance, wash trading, a simultaneous buying and selling of the same securities by the same investor; accommodation trading, a buying and selling of the same securities entered into by a person who accommodated another person; price ratcheting orders to swing exchange markets; and orders to fix price at Japannext PTS are prohibited.

Insider trading restrictions
Trading at a PTS is an off-exchange transaction and is subject to insider trading restrictions in the same way as trading at exchange. An investor who holds knowledge about undisclosed material facts or facts of the tender offer of an issuer of listed securities are not allowed to trade that securities at a PTS before such information is disclosed to the public.

TOB Regulations
TOB regulations are the rules under FIEA that provides that if the ownership ratio of shares after an off-exchange purchase of shares issued by companies subject to continuous disclosure of annual securities report, such as listed companies, exceeds 5%, that purchase must be effected by means of a tender offer (TOB) in principle. The contents of TOB regulations differ depending on the thresholds of ownership ratio of the shares after the purchase (exceeding 5%, one third, one-half, two third, etc.).

Since trading at a PTS is an off-exchange purchase or sale, it is subject to TOB regulations in principle. However, if the ownership ratio of shares after the purchase will exceed 5% but less than one third, that purchase is exempted from TOB restrictions (provided, however, this is limited to a purchase at J-Market or X-Market).

What is the best execution policy for Japannext PTS?

A best execution policy is a policy and method of a financial service provider stipulated for executing orders from clients on the best possible terms. We are a PTS operator and the orders we receive from clients for listed securities are only executed at Japannext PTS. We do not broker an order to an exchange or other PTS operator.
For more details, please refer to the Best Execution Policy (in Japanese)

How are securities traded at Japannext PTS taxed?

They are taxed in the same way as the listed securities traded at the exchanges.

What kind of short selling restrictions are there at Japannext PTS?

Same as the exchanges, the PTS that handles listed securities are subject to short selling price restrictions. Specifically the following restrictions regarding short selling are applicable to Japannext PTS: