Current Inspections and Inspection Results
Current Inspections
JPX-R is currently conducting inspections of the following trading participants. (Each name will be removed from the following list approximately 50 business days after an inspection notice is issued.)
| Trading Participant (Code) |
| HACHIJUNI SECURITIES Co., Ltd.（11044） |
| Iwai Cosmo Securities Co.,Ltd.（11544） |
| NISHIMURA SECURITIES CO ., LTD.（12296） |
| HIROTA SECURITIES CO.,LTD.（12464） |
| MITA SECURITIES Co.,Ltd（12712） |
| BofA Securities Japan Co.,Ltd.（12792） |
| Susquehanna Hong Kong Limited（13004） |
Recent Inspections
The following chart lists the number of companies that were sent inspection results in FY2022.
| Type of Inspection |
Description |
Number of Companies |
| General Inspection |
Inspections that are carried out in the order of their priority, taking into consideration the results of previous inspections, the results of regulatory inspections, and the time since the previous inspection. |
22 |
（Number of joint inspections)
Inspections carried out together with the Japan Securities Dealers Association (JSDA).
|
(21) |
（Number of joint inspections)
Inspections carried out in collaboration with other exchanges.
|
(4) |
| Follow-Up Inspection |
A subsequent inspection held to confirm the status of improvement. The inspection, if necessary, is conducted within about a year after a trading participant is requested to submit an improvement report regarding any deficiencies found by the general inspection. |
0 |
| Special Inspection |
An inspection focusing on specific matters relevant to the trading participant. |
0 |
Deficiencies Found
If, in the course of an inspection of a trading participant, JPX-R finds that the participant has violated any laws, regulations, or rules, it will take disciplinary action, issue a warning, or make a recommendation or request to the participant.
The following deficiencies were found in FY2022.
| Deficiency |
Number of Cases |
Number of Disciplinary Actions, Warnings,
Recommendations, or Requests |
| Inadequate management of system risks |
9 |
1 |
| Inadequate controls to prevent erroneous order placement |
8 |
1 |
| Inadequate management to prevent unfair trades |
5 |
2 |
| Deficiencies related to margin trading |
4 |
1 |
| Inadequate supervision of short selling transactions |
3 |
0 |
| Deficiencies related to internal inspections and audits |
2 |
2 |
| Inadequate management of corporate information |
2 |
0 |
| Deficiencies related to regulatory measures regarding trading, etc. |
1 |
1 |
| Deficiencies related to margins for derivatives trading |
1 |
0 |
| Deficiencies related to bookkeeping and document handling |
1 |
0 |
| Other |
2 |
2 |
| Total |
38 |
10 |
Responses to Inquiries
The Trading Participants Examination & Inspection Department answers questions from trading participants and relevant stakeholders regarding laws, rules, and regulations pertaining to securities trading. The following inquiries were received in FY2022.
| Topic |
Number |
| Margin trading |
7 |
| Unfair trades |
6 |
| Short selling |
6 |
| Net settlement |
6 |
| Amendments to executed trades |
6 |
| Same-day payment collection regulation |
5 |
| Statutory documents |
4 |
| Corporate information |
3 |
| Order management |
2 |
| Report submission |
2 |
| Front-running |
2 |
| System management |
1 |
| Derivatives trading |
1 |
| Best execution obligation |
1 |
| Other |
7 |
| Total |
59 |
Other Activities
Publication of the 2023 Inspection Plan
On March 30, JPX-R released an Inspection Plan that outlines its policies and focuses for inspections in 2023.
In FY2023, its basic policies are: "Conducting inspections with expertise as an organization of the exchange group,"
"Monitoring trading participant's business operations and financial situation," "Strengthening inspection based on a risk-based approach," and "Strengthening internal management systems of trading participants." Under these policies, JPX-R will carry out inspections with the following focus areas: 1. Trading supervision systems to prevent unfair trading, 2. System risk management systems, 3. Management systems pertaining to low latency trading, etc., 4. Status of management system for commodity futures transactions, etc., and 5. Other matters to be observed during inspections, taking into account the circumstances surrounding trading participants in recent years.
For more information, please refer to the following.
Revision of "Check Points related to Trading Participant Internal Management Systems"
Taking into consideration matters such as revisions to laws and regulations, JPX-R has revised "Check Points related to Trading Participant Internal Management Systems," which summarizes key points regarding internal management systems at trading participants in relation to the main focuses of inspections.
For more information, please refer to the following.
Information Exchange Meetings
We regularly exchange opinions with the inspection and supervision departments of the Financial Services Agency, the Securities and Exchange Surveillance Commission, the Kanto Local Finance Bureau, and the Japan Securities Dealers Association on the results of the previous year's inspections and this year's inspection plan.
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