Trading Method

There are no special rules for ETF trading compared to common stocks. Trading is conducted through securities companies, in the same way as common stock investment.

Trading Rules

  • Limit and Market Orders are both capable, as with stocks.
  • Tick sizes are also the same as those for stocks. Just as with stocks, order can be placed for "Bid at JPY 903" or "Offer at JPY 894".
  • Additionally, execution of transactions (the principle of price and time priority) and price limits are the same as those for common stock transactions.

Trading Units

  • Just as stock trading units vary by issue, ETF trading units differ by product.
  • For example, if the trading unit for a TOPIX-linked ETF was 10 units, for JPY 1,000 x 10 units, it would be possible to trade from JPY 10,000 with the movements of the overall TSE stock market.

Order Quantity Restrictions

  • In order to prevent erroneous order placement, TSE configures Order Quantity Restrictions and does not accept orders in excess of certain quantities, which are set based on the number of listed units.
  • For ETFs and ETNs whose asset under management are below certain values(*1), the parameters of the order quantity restrictions will be set to the number corresponding to certain order values that are calculated based on the market values as of the end of the previous month (*2).
  • New parameters are effective from 21st in each month (the next business day if such date falls on a non-business day) .
    *This scheme will be applied from October 22, 2018.
    Please refer to the attached file for actual parameter applied to each issue (*3)
List of Order Quantity Restrictions (Last update: 2021/9/17) icon-csv
Announcement of "List of Order Quantity Restrictions" icon-pdf
Handling of Order Quantity Restrictions for ETFs and ETNs icon-pdf
  • JPY1 billion for the continuous trading market and JPY 35 billion for the ToSTNeT market.
  • JPY300 million for the continuous trading market and JPY 10.5 billion for the ToSTNeT market.
  • As a general rule, it will be announced around 5 p.m. business day before the applicable date.

Market Information

  • As with stocks, market information is provided for price, trading volume, trading value, quote information, pre-open quote information, and special quote information.
  • Additionally, open, close, low, and high prices, as well as trading volume can be found in newspapers, etc. in the same way as stocks.

ToSTNeT Trading

  • As with stocks, ETF ToSTNeT trading is available.

Trading Method on Initial Listing Date

  • The base price on the initial listing date shall be calculated based on the closing price of the underlying stock price index, etc. on the day preceding the initial listing date.
  • Price limits will be applied according to this base price from the start of auction trading on the initial listing date.
  • ToSTNeT trading shall be possible from 8:20 am on the Initial listing Date using the base price of such date.

Settlement Date

  • Settlement is conducted on T+2 or same day settlement. In the case of T+2 settlement, the money for the sale and the purchased ETF are exchanged on the 3th day counting from the transaction date, in the same manner as common stocks.


  • As with stock dividends, dividends are paid to investors which hold the ETF (beneficiaries) on the earnings date. (However, there are cases where dividends are zero.)

Creation and Redemption

  • One distinct trait of ETFs is, in addition to being able to receive a basket of equities, etc. for a certain amount of ETF units (redemption), the ability to acquire the ETF from a certain basket of equities, etc. (creation). *1*2
  • In this way, since it is possible for mutual exchange between the ETF and baskets of equities, etc., active arbitrage trading is conducted and interrelation between the underlying index and the ETF's market price is ensured.
  • For Foreign ETFs (overseas ETFs), there may be cases where creation and redemption are not possible within Japan.
  • For the "Nikkei 300 Stock Index Listed Fund", creation is conducted with cash, similar to regular investment trusts, and not with baskets of equities.

Revision of Short-Selling Restrictions

To keep a high level of credibility on ETF prices, it is necessary to have a system by which smooth arbitrage and hedge trading may occur between the ETF and equities, and the ETF and index futures. In order to prepare trading rules which would facilitate such smooth transactions, the "Cabinet Office Ordinance on Short Selling of Securities" was revised in July 2001. Currently, some restrictions are prescribed in the "Cabinet Office Ordinance on Restrictions on Securities Transactions, etc." (hereinafter, the "Ordinance").
In consideration of the marketability of ETFs and the nature of trading, the following transactions are exempt from marking restrictions and price restrictions.

  • Short sales of ETFs which were allotted via division, etc. of beneficiary rights (Article 9-3, Item 12 of the Ordinance)
  • Short sales of stocks in cases where such stocks, etc. have been requested for exchange with a domestic ETF (Article 9-3, Item 16, Sub-item a of the Ordinance)
  • Short sales of domestic ETFs in cases where creation has been requested for such domestic ETFs (Article 9-3, Item 16, Sub-item b of the Ordinance)

Additionally, the following transactions shall be exempt from price restrictions only. (Marking requirements applies.)

  • Short sales of ETFs in cases where such ETFs are purchased at the VWAP (Article 9-3, Item 19 of the Ordinance).
  • Arbitrage trading between ETFs tracking the same indicator (Article 9-3, Item 26 of the Ordinance)
  • Short sales of ETFs or stocks, etc. in cases of arbitrage/hedge trading of such ETFs or stocks, etc. (Article 9-3, Items 27 and 28 of the Ordinance)
  • Short sales of ETFs in cases of arbitrage/hedge trading of such ETFs and index futures (Article 9-3, Items 29 and 30 of the Ordinance)
  • Short sales of ETFs in cases of arbitrage/hedge trading of such ETFs and ETF options (Article 9-3, Items 31 and 32 of the Ordinance)
  • Short sales of ETFs conducted to standardize the price of such ETFs with the underlying stock price index, etc. (Article 9-3, Item 33 of the Ordinance)

ETFs are thought to have a price formation with strong interrelation with the underlying stock price index, etc. and index futures using such stock price index, etc.

Using such marketability, it is possible that holders of ETFs will conduct unfair transactions in both the ETF and equities markets or ETF and index futures markets, such as manipulating underlying stock price indices to change the price of an ETF for the purpose of generating unfair profits.
From the perspective of maintaining fairness of the TSE market, the following actions crossing the ETF, equities, and index markets are prohibited: 1) wash trading, 2) conspiracy trading, 3) market manipulation, 4) rumor spreading, and 5) customer front-running.