There are no special rules for ETN 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.
- In addition to auction trading, trading is also available through ToSTNeT trading, which can be used for large-lot transactions. However, off-auction trading of own shares (ToSTNeT-3) is not available.
Reference Price
- Some ETNs may set their base price based on the home market price as with foreign stocks.
- For details on how the base price of such ETNs is set and how each issue is handled, please refer to the Base Price section of the Foreign Stock Trading Rules page.
Trading Units
- In ETNs, the trading unit differs depending on the product.
- For example, if the trading unit for a TOPIX-linked ETN 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.
Daily Price Limits
- As with domestic stocks, the daily price limits are set based on the base price.
- For ETFs, ETNs, and leveraged products, if the auction closes at the price of the stop price (low), the price limit will be expanded from the next business day (except for the expansion of the minimum price limit for issues with a trading unit of 1 unit).
Tick Size
- As a general rule, the tick sizes applied to TOPIX 500 constituents (TOPIX 500 tick size table) will be applied to all ETFs, ETNs and leveraged products.
- If an ETF, ETN, or leveraged product has a trading unit of 1 unit and its closing price, etc. falls to JPY 5,000 or less, the tick sizes other than those applied to TOPIX 500 constituents (the non-TOPIX 500 tick size table) will be applied, in principle, from the second business day afterwards. If the closing price, etc. later increases to JPY 7,000 or more, the TOPIX 500 tick size table will be re-applied from the second business day after this.
| Handling of Operations Relating to Optimization of Tick Sizes for ETFs, ETNs, and Leveraged Products |
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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.
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 ETN are exchanged on the 3th day counting from the transaction date, in the same manner as common stocks.
Revision of Short-Selling Restrictions
To keep a high level of credibility on ETN prices, it is necessary to have a system by which smooth arbitrage and hedge trading may occur between the ETN and equities, and the ETN and index futures. Some restrictions with regard to the short-selling are prescribed in the "Cabinet Office Ordinance on Restrictions on Securities Transactions, etc." (hereinafter, the "Ordinance").
The short-selling of ETNs (limited to securities issued by a foreign state or foreign person as entrusted securities) is exempt from marking restrictions and price restrictions (Article 10, Item 3, Sub-item d of the Ordinance).
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