Market Operation

SBI Japannext Co. Ltd., (the “Company”) is committed to the appropriate management of transactions conducted through its PTS venue (“Japannext PTS”) from the perspective of “measures to suspend or limit transactions”, “monitoring and prevention of unfair transactions” or “prevention of irregular order such as mistaken order”, in order to enhance the fairness and transparency of such transactions, to ensure transaction security and to secure investor confidence.

Suspension or Limitation of Sales Transactions

The Company entitled to suspend or limit transactions conducted through Japannext PTS to ensure transaction security and fair dealing, or when it is considered necessary by the Company that such measures are required from the risk management point of view.

During Daytime Session

The Company will suspend or limit all or part of a transaction whenever any of the following events arises:

  1. Off-market trading halt by Japan Securities Dealers Association (“JSDA”);
  2. Transaction halt implemented by the main exchange on which the target security is listed, and the Company considers that similar measure is necessary;
  3. Media reports concerning “material facts” of a target security and the Company considers it inappropriate to allow continuation of relevant transaction activities, by reasons of ambiguity contained in such information or necessity to make the information known to the public.

After the implementation of transaction suspension, the Company will resume relevant transactions activities as soon as JSDA removes its suspension measure or the cause of such suspension has become immaterial. Nevertheless, contracts executed immediately before the implementation of such suspension or limitation measure and are not recognized by JSDA will be canceled accordingly.

During Nighttime Session

The following scenarios may take place during a nighttime session:

  1. Transactions not concluded due to the occurrence of an event prior to the nighttime session;
  2. Delay of starting time due to the occurrence of an event prior to the nighttime session; or
  3. Suspension of transactions due to the occurrence of an event during the transaction period.

Transactions suspended during the nighttime session may not resume within the same day. Specifically, when an issuer discloses certain material facts via Timely Disclosure Network (“TDnet”) operated by Tokyo Stock Exchange Inc. after 17:30 on that day, the Company’s transaction suspension system will automatically suspend all transactions relating to the target security, in order to notify investors of the relevant material facts.

Further, any material facts concerning a target security that is reported by the media or through other avenues but has not been released by the issuer through TDnet, the Company may still from time to time suspend or limit all or part of a transaction if the Company considers it necessary to ensure fair dealing, considering comprehensively how and to what extent the facts are known to investors, or the situation of order of the targeted security at the venue of Japannext PTS.

For the purpose of raising investors’ awareness, the Company will publish notification on its webpage if it decides not to take any measure to suspend or limit any transactions.

Incidents triggering transaction suspension common to daytime and nighttime sessions

In addition to the above provisions, the Company may suspend or limit all or the part of a transaction if any of the following events arises, irrespective of whether it is during daytime session or nighttime session:

  1. The Company considers it inappropriate to allow continuation of transaction activities due to an actual or foreseeable abnormality in the trading system or abnormality in trading activities.
  2. Delay or inability to place or execute an order, or to give and receive money or securities due to the occurrence of a force majeure event such as natural disasters, political turmoil, strike, sudden change in foreign currency circumstances, closure of foreign exchange market etc.
  3. The Company considers it necessary to suspend or limit transactions to ensure fair dealing.
Material facts

The major matters considered to constitute “material facts” are as follows:

In addition to notifying all participating securities firms, information regarding suspension of transactions of certain securities at Japannext PTS will be circulated to the information vendors (QUICK Corp. and Thomson Reuters Markets KK) and be disclosed on the Company’s website.

Surveillance to Detect and Prevent Suspicious Transactions

In order to maintain a fair-trade environment, and to prevent market manipulation and insider trading, the trade surveillance team monitors real time market prices and transactions as well as conducts detailed analysis after market close.

During market hours, our surveillance department may ask trading participants for transaction details, end-client information, and other intelligence needed for the detailed analysis of trades. When a trade is determined as unfair after the investigation, the SBI Japannext market surveillance department will notify trading participants to pay close attention to the identified issue. If there are no improvements after the notification, the SBI Japannext market surveillance department will consider introducing certain limitations or suspension of business with the participants in question.

Furthermore, the Japannext PTS compliance department may provide detailed information of those suspicious transactions to institutions such as SESC (Securities and Exchange Surveillance Commission), JSDA, and exchange markets.

Termination of Connectivity

Japannext PTS reserves the right to forcibly terminate a member's connectivity in the following circumstances: