Japan's major stock exchanges, plagued by a series of trading system errors, have agreed to step up talks on joint development of next-generation trading systems, the country's brokerage industry body said on March 02.
Tokyo Stock Exchange (TSE), the world's second-largest bourse, which handles over 90 percent of stock trading in Japan, and smaller rival Osaka Securities Exchange Co have been using different trading systems. Trading on the Jasdaq Securities Exchange, the country's biggest market for start-ups and owned 72.6 percent by the Japan Securities Dealers Association (JSDA), is run by a system that differs those of the TSE and the OSE.
But traders and analysts say sharing all or parts of the systems could make it easier for the exchanges to detect or prevent system problems.
JSDA Chairman Hiroshi Koshida said after a meeting with TSE president Taizo Nishimuro and OSE President Michio Yoned that the three agreed to hold talks to see if they can develop common parts or systems for a next-generation system. The meeting took place at a time when investors have raised worries about Japanese exchanges' capacity to handle a spike in trade volume as individual investors rush into the country's resurgent markets.
The TSE has been cutting its daily trading hours by 30 minutes since January 19 after heavy trade orders nearly swamped its computer systems. It also faced a problem late last year when a trader was unable to cancel a wrong order, contributing to a $350 million trading blunder by Mizuho Securities, a unit of Mizuho Financial Group A spike in trading volume also held up operations on Jasdaq on December 30, causing delays in data-processing. It was the fourth such incident last year.