Market News

Jul. 02, 2021 TSE Partial Revision to Broadening of Daily Price Limits for ETF and ETN

In order to prevent excessive fluctuations in stock prices, the Tokyo Stock Exchange (TSE), Inc. has established a daily price limit, which limits the range within which stock prices can fluctuate within a certain range. In cases where supply and demand are unbalanced and the direction of stock prices is clear, the price limits are broadened in order to facilitate the early conclusion of transactions. However, some ETFs and ETNs (including leveraged and inverse ETFs) do not have a price limit on the underlying asset, and there have been cases where the market price cannot follow changes in the price of the underlying asset and trading is not executed for a long period of time.

Therefore, for ETFs and ETNs, which are products with a theoretical price based on the price of the underlying asset, the following revisions will be made to the operations related to the expansion of the price limits, taking into account the increasing needs of investors for smoother execution and prompt price discovery by further improving the ability to follow the price of the underlying asset. In light of this, we have decided to revise the operation of the expanded price limits as follows.