Note: This English translation is for reference purposes only. In the event of any discrepancy between the Japanese original
and this English translation, the Japanese original shall prevail. The Financial Futures Association of Japan assumes noresponsibility for this translation or for direct, indirect or any other form of damage arising from the translation.

Results of the Actual Conditions Survey ofOver-The-Counter Retail Foreign Exchange Margin Trading
August 31, 2019
Research Department, The Financial Futures Association of Japan
Introduction
The Financial Futures Association of Japan (hereinafter referred to as the “Association”), in
cooperation with the Tokyo Foreign Exchange Market Committee, conducts in every April a surveyof business model and other actual conditions of over-the-counter (OTC) retail foreign exchange(FX) margin trading (hereinafter referred to as "OTC retail FX margin trading", or foreign exchange
margin trading, referred to as “FX margin trading”) conducted by members that handle OTC retail
FX margin trading.
The Association also collects from Association members various data that are necessary for
examining the management condition of each member company of the Association (hereinafterreferred to as the “Monitoring Data” 1 in this report) on a regular basis.
The results of the survey of actual conditions mentioned above are aggregated and analyzed while
taking the Monitoring Data into account, and are summarized as follows:Part 1: Survey of Actual Conditions of OTC Retail FX Margin Trading in April 2019
1. Survey Method
We conducted the survey by distributing questionnaires to all the members that handled OTC retail
FX margin trading as of April 30, 2019 (excluding members that only provide intermediary services)
and asking them to answer the questions on the questionnaires.
2. Number of Members Subject to the Survey
The number of members subject to the survey 2(unless otherwise specifically provided, hereinafterreferred to as the “Members”) was 51 3.
Exhibit 1: Change in Number of Members Subject to the Survey(Unit: Company (Member))

Survey Month and Year
April 2013
April 2014
April 2015
April 2016
April 2017
April 2018
April 2019

Number of Members Subject to the Survey
59
61
56
51
53
53
51

1

Year-on-Year Change
-4
2
-5
-5
2
0
-2

Trading volume of OTC retail FX margin trading with customers uses a figure aggregated based on the monitoring survey that isreported by each member to the financial regulatory authority, a copy of which is to be submitted to the Association. Therefore,
please note that the figures do not completely match those publicly announced by the Association on the monthly flash report on
OTC FX transactions.
2
As all Members that handle OTC retail FX margin trading (hereinafter referred to as "Members handling OTC retail FX margin
trading") are the “Members subject to the survey,” the meaning of the “Members handling OTC retail FX margin trading” is thesame as that of the “Members subject to the survey.” However, please understand that both expressions are used in this report,
depending on the context or for making the report easier to understand.
3
For the April 2019 survey, two of the Members handling OTC retail FX margin trading had no record of actual trades. In thisreport, they are excluded from the Members subject to the survey. (The same also applies in Part II.)

1

3. Collected Results<Item 1>
(1) Business Model
The Association focused on the flow of executing a transaction of OTC retail FX margin trading, andcategorized the flows into 24 groups indicated in the “Table of Business Model Category” below(the total number of model numbers indicated in the table below (“model No.” in the Exhibit) as abusiness model depending on the characteristics of the flow:
Table of Business Model Category
Model No. of
Each Business
Model (model No.)White Label[Note 1]

No. of Firms Used for CoverTransactions to Formulate
Prices [Note 2]

Marry(During Trading
Hours) [Note 3]

1

Discretionary

2

Yes

3

DiscretionaryNo56Discretionary
Yes

8
9

DiscretionaryNo

11

Before13

DiscretionaryYes

15

Discretionary
No

17
18
19

22

After
BeforeApplicable

Discretionary
Yes

20
21

After
BeforeSingle16

After
BeforeSeveralDiscretionary
No

23
24

Note 3:

After

12
14

Note 2:

After
BeforeSeveral10

After
BeforeNot
Applicable

7

After
BeforeSingle4Note 1:

Timing of Execution with
Customers and CoverTransaction [Note 4]

After
BeforeWhite label means a transaction form where a Member executes a transaction with a customer under its own name usinga pricing/execution system managed by another foreign exchange broker (including FX operator). This includes a casewhere a Member uses a system provided by its parent company, etc.
This means the number of firms that provide a cover rate used for formulating the price, not the number of firms who
actually conduct cover transactions. In a normal condition, if a trading price with customers is formulated based on therate provided by a specific single firm that is used for cover transaction, it is described as “Single,” while if the rate is
selected or synthesized from those provided by several firms that are used for cover transactions every time the price forcustomers is formulated, it is described as “Several.”During the daytime, if there is a system that controls the price fluctuation risk arising from transactions with customers
by using marry, it is described as “Yes,” while if there is no such system, it is described as “No.” Additionally, if covertransactions are made for all the transactions executed with customers during the daytime in principle, it is described as“No,” while if cover transactions are not made for some of the transactions executed with customers during the daytime,
and the price fluctuation risk is offset by open positions created by transactions with other customers that match against
the original transactions, it is described as “Yes.”

2

Note 4:

In a normal condition, if a cover transaction is made after executing a transaction with a customer, it is described as“After,” while if a transaction with a customer is executed only after a cover transaction is completed, it is described as“Before.” If a cover transaction can be made either before or after executing a transaction with a customer, it is describedas “Discretionary.” Also, if a Member holds its own position by making a cover transaction before receiving a customer
order and can match its own position against the customer’s order, it is described as “Discretionary.” If a transaction witha customer can be completed at the same time when a cover transaction is made under a system such as STP, it isdescribed as “Before.” In the case of white label, “Discretionary,” “After,” or “Before” is determined depending on thetiming of cover transaction made by the outsourcing contractor. It is not necessary to consider response at the time of
emergency.

(2) Distribution of Business Models
Exhibit 2 shows the number of Members subject to the survey (51 companies in total) that adopt acertain business model (model No.) shown in the Table of Business Model Category in Part 1,
Section 3, <Item 1>-(1). The total number of responses was 59, which exceeded the total number ofthe Members subject to the survey, as some Members adopted several business models (model No.).
When we look at the breakdown of each business model (model No.), 22 members (accounting forabout 37.3% of the total responses) adopted at least one of Model Nos. 16 to 18 (the business models
that are a white label form, use one firm for cover transactions, and do not conduct marrytransactions), while 25 members (accounting for about 42.4% of the total responses) adopted at least
one of Model Nos. 7 to 9 (the business models that are not a white label form, use several firms forcover transactions, and can conduct marry transactions), out of which the number of Members that
adopted Model No. 8 (the business model that is not a white label form, uses several firms for covertransactions, can conduct marry transactions, and conducts a cover transaction after carrying out
contract with a customer) was 19 (accounting for approximately 32.2% of the total responses).
Exhibit 3 shows the number of Members subject to the survey (51 in total) that adopted either“Single (one)” or “Several (two, or three or more)” business models (model No.).

3

Exhibit 2: Total Number of Members that Adopt Each Model Number in Part 1, 3-(1)(Unit: Company (Member))

Exhibit 3: Breakdown of Members by Number of Business Models Adopted(Unit: Company (Member))

The number of Members that
adopt a single model

The number of Members that adopt
several (two) models

The number of Members that adopt
several (three or more) models

44

6

1

(3) Ranking of Members Based on Trading Volume of OTC Retail FX Margin Trading with
Customers and Business Models Adopted
We rank the Members subject to the survey based on the trading volume of OTC retail FX margin
trading, and categorize them into three classes 4. Exhibit 4 shows the total number of Members byeach of three classes that adopted a certain business model (Model No. show in 3-(1)) as in Exhibit
2.
When we look at the breakdown, we found that the most widely adopted models were Model Nos. 7
and 8 for the First Class, Model Nos. 8, 17, and 18 for the Second Class, and Model Nos. 8 and 18
for the Third Class.

4

We rank the Members subject to the survey by the trading volume of OTC retail FX margin trading in FY ended April 2019, andcategorized the top one-third as the First Class (Rank 1st to 17th), the next one-third as the Second Class (Rank 18th to 34th), andthe remaining one-third as the Third Class (Rank 35th to 51st).

4

Exhibit 4: Total Number of Members in Each of Three Classes Based on OTC Retail FX
Margin Trading Volume Ranking that Adopted a Certain Model (model No.) Shown in Part 1,3-(1)(Unit: Company (Member))

The First Group Members
The Second Group Members
The Third Group Members<Item 2> Use of Prime Broker (PB) 5System and Volume of Use(1) Change in the Use of PBs by the Members Subject to the Survey
Exhibit 5 shows the number of Members using the Prime Broker (PB) system, the number ofcontracts made through the PB system, the number of PBs, and the trading volume of OTC retail FX
margin trading with customers under the PB system.
Exhibit 6 shows the number of Members by the use of the Prime Broker (PB) system in terms of
Newly started, Ceased (terminated), Increased, and Decreased:

5

Prime Broker (PB) means a broker who intermediates a transaction between the Member and a bank that is used for a covertransaction, and takes up the position of the Members based on the give-up instruction or by a tri-party agreement for thesettlement between the Member and the financial institution used for the cover transaction.

5

Exhibit 5: Use of PB system and the Usage AmountNo. of PBs

PB usage amount(Net)[Note 2](million yen)

Survey month andyear [Note 1]

No. of Members
using the PB System

No. of contracts made throughthe PB system (total)

April 2013

17

30

-

-

April 2014

16

30

7

52,764,799

April 2015

17

31

8

99,643,704

April 2016

15

31

10

70,312,312

April 2017

15

30

7

45,205,313

April 2018

16

31

7

56,646,873

April 2019

16

31

6

50,243,748

Note 1:
Note 2:

Survey of the number of PBs (net) and the PB usage amount began in April 2014 (The same shall apply in Exhibits 6 and
7).
It is the number of PBs that the Members have contracted after deducting the overlapped numbers.

Exhibit 6: Use of PB system (Newly started, Ceased (terminated), Increased, and Decreased)(Unit: Company (Member))No. of Membersthat ceased using
PBs
2

No. of Membersthat decreased thenumber of PBs used
1

No. of Membersthat increased thenumber of PBs used
3No. of Membersthat newly started
using PBs
1

April 2015 [Note]

0

3

2

2

April 2016 [Note]

2

0

3

1

April 2017

0

3

2

0

April 2018

0

0

0

1

April 2019

0

1

1

0

Survey Month andYear
April 2014

Note:

In addition to the figures indicated above, one Member that used the PB system ceased the business as of April 2015, and
one Member was absorbed by another Member as of April 2016.

(2) Attributes of PBs 6
As shown in Exhibit 7, the number of PBs used by the Members handling OTC retail FX margin
trading was a total of six in 2018. Of these, the attribute of five PBs is “i. Financial institutions
subject to reporting to the Tokyo Foreign Exchange Market Committee.”6

Please refer to the footnote in Part 2, 3-(1) for each attribute of PBs.

6

Exhibit 7: Use of PBs by Attribute(Unit: Company (PB))

ii. Financial
institution
subject toreporting to the
Bank of Japan(excluding thosecategorized as i)iii. Financial institution
subject to reporting to acentral bank, etc.
(overseas) (excluding thosecategorized as i or ii)
Financial institution subject
to reporting to a central
bank, etc. (overseas)(excluding thosecategorized as i or ii)

Domestic PBs
other than i to iii

Overseas PBs
other than i to iii

6

-

1

-

-

April 2015

4

-

2

-

2

April 2016

6

-

2

-

2

April 2017

5

-

1

-

1

April 2018

5

-

1

-

1

April 2019

5

-

1

-

-

Survey Monthand Yeari. Financial
institutions
subject toreporting to theTokyo Foreign
Exchange
MarketCommittee

April 2014

<Item 3> Offering of Automatic Trading Tools(1) Offering of Automatic Trading Tools to Customers
Exhibit 8 shows the number of Members that offered automatic trading tools to customers every
April from 2013 onwards, and in the case where the automatic tool was offered, the number ofMembers that offered a tool that was internally developed, externally developed, or both.
Exhibit 8: Number of Members Offering Automatic Trading Tools and the Attributes ofDevelopers of the Tools(Unit: Company (Member))

Whether the automatic trading tools offered were internally developed,
externally developed, or both

No. of Membersthat offeredautomatic
trading tools

Internally developed

Externally developed(developed by others)

Both

April 2013

19

1

16

2

April 2014

21

3

16

2

April 2015

23

4

16

3

April 2016

25

7

15

3

April 2017

25

8

14

3

April 2018

20

6

11

3

April 2019

21

4

13

4

Survey Monthand Year7(2) Impact of Automatic Trading Tools
Exhibit 9 shows the trading volume of OTC retail FX margin trading with customers executed by all
the Members subject to the survey, by the Members that offered automatic trading tools, and by theMembers that did not offer automatic trading tools, as of every April from 2013 onwards.
Exhibit 10 shows the trading volume of OTC retail FX margin trading with customers executed by
the Members that offered automatic trading tools (total of seven Members) in all the surveys
conducted every April from 2013 onwards, and by the Members that did not offer automatic trading
tools (total of 18 Members) in all the surveys conducted every April from 2013 onwards.
Exhibit 9: Trading Volume of OTC Retail FX Margin Trading with Customer(By all the Members subject to the survey, and Members that offered/did not offer automatic trading tools ineach survey conducted every April from 2013 onwards)(Unit: million yen, %)Trading Volume of OTC Retail FX Margin
Trading with Customers

Change(Ascomparedwithpreviousyear)

Change(Ascomparedwithpreviousyear)

Change(Ascomparedwithpreviousyear)

Change(Ascomparedwith April
2013)

Change(Ascomparedwith April
2013)

Change(Ascomparedwith April
2013)

SurveyMonth andYear

Members
subject to theSurveyMembersthat offeredautomatic
trading
tools

Membersthat did notoffer
automatic
trading tools

Members
subject totheSurveyMembersthat offeredautomatic
trading
tools

Membersthat did notoffer
automatic
trading tools

Members
subject totheSurveyMembersthat offeredautomatic
trading
tools

Membersthat did notoffer
automatic
trading
tools

April 2013

442,119,319

74,879,925

367,239,394

-

-

-

-

-

-

April 2014

238,252,636

35,660,526

202,592,110

53.9%

47.6%

55.2%

53.9%

47.6%

55.2%

April 2015

453,041,189

36,697,371

416,343,818

190.2%

102.9%

205.5%

102.5%

49.0%

113.4%

April 2016

407,399,182

98,816,141

308,583,041

89.9%

269.3%

74.1%

92.1%

132.0%

84.0%

April 2017319,281,362

79,001,116

240,280,246

78.4%

79.9%

77.9%

72.2%

105.5%

65.4%

April 2018309,440,740

87,218,594

222,222,146

96.9%

110.4%

92.5%

70.0%

116.5%

60.5%

April 2019

240,804,618

57,956,661

182,847,957

77.8%

66.4%

82.3%

54.5%

77.4%

49.8%

8

Exhibit 10: Trading Volume of OTC Retail FX Margin Trading with Customer(By Members that offered or did not offer automatic trading tools in all the surveys conducted every April from2013 onwards)(Unit: million yen, %)SurveyMonth andYear

Trading Volume of OTC Retail FX Margin
Trading with Customers(Reference)
Members
Membersthat have
Membersthat haveconductedthat haveofferedOTC retail
not offeredautomatic
FX marginautomatic
trading
trading tools trading fortools in all
all the years
in all thethe years
from April
years fromfrom April
2013 toApril 20132013 to2019 otherto 20192019 (total
than (A) and(total of 18
of seven(B) (total of
Members)...
Members)..
23
(B)
.(A)
Members)...
(C)

Changein (A)(As
comparedwithpreviousyear)

Changein (B)(As
comparedwithprevious
year)(Reference)
Change in(C)(Ascomparedwithpreviousyear)

Changein (A)(As
compared
with
April
2013)

Changein (B)(As
compared withApril
2013)(Reference)
Change in(C)(Ascomparedwith April
2013)

April 2013

11,070,396

295,897,614

130,302,665

-

-

-

100.0%

100.0%

100.0%

April 2014

5,241,405

171,575,529

57,342,508

47.3%

58.0%

44.0%

47.3%

58.0%

44.0%

April 2015

7,952,351

326,469,311

111,184,374

151.7%

190.3%

193.9%

71.8%

110.3%

85.3%

April 2016

8,422,027

300,467,237

96,084,195

105.9%

92.0%

86.4%

76.1%

101.5%

73.7%

April 2017

6,813,317

232,258,853

76,268,828

80.9%

77.3%

79.4%

61.5%

78.5%

58.5%

April 2018

7,402,775

210,957,158

86,230,382

108.7%

90.8%

113.1%

66.9%

71.3%

66.2%

April 2019

11,386,071

156,691,630

69,619,011

153.8%

74.3%

80.7%

102.9%

53.0%

53.4%

<Item 4> Offering of API 7 to Customers(1) Offering of API to Customers
Exhibit 11 shows the number of Members that offered API every April from 2013 onwards.
Exhibit 11: Number of Members that Offered API(Unit: Company (Member))No. of Members thatoffered API
5

No. of Members that
stopped offering API-

April 2014

7

0

2

April 2015

15

0

8

April 2016

12

3

1

April 2017

12

2

2

April 2018

11

3

2

April 2019

10

2

1

Survey Month and Year
April 20137

No. of Members thatstarted offering API-

In this document, API (Application Programming Interface) means specifications of the interface that is used to exchange datawith external software (mainly a system for system trading).

9(2) Impact of Application Programming Interface
Exhibit 12 shows the trading volume of OTC retail FX margin trading with customers executed by
all the Members subject to the survey, Members that offered Application Programming Interface(API), and Members that did not offer API in each survey conducted every April from 2013
onwards.
Exhibit 13 shows the trading volume of OTC retail FX margin trading with customers executed by
the Members that have offered API in all the surveys conducted every April from 2013 onwards(total of three Members) and by the Members that have not offered automatic trading tools in all thesurveys conducted every April from 2013 onwards (total of 31 Members).
Exhibit 12: Trading Volume of OTC Retail FX Margin Trading with Customer(By all the Members subject to the survey, and Members that offered/did not offer API in each survey
conducted every April from 2013 onwards)(Unit: million yen, %)Trading Volume of OTC Retail FX Margin
Trading with Customers

Change(Ascomparedwithprevious
year)

SurveyMonth andYear

Members
subject to
the Survey

Membersthat offered
API

Members that
did not offer
API

Members
subject to
the Survey

April 2013

442,119,319

50,594,975

391,524,344

-

-

-

-

-

-

April 2014

238,252,636

24,711,589

213,541,047

53.9%

48.8%

54.5%

53.9%

48.8%

54.5%

April 2015

453,041,189

81,606,353

371,434,836

190.2%

330.2%

173.9%

102.5%

161.3%

94.9%

April 2016

407,399,182

91,996,657

315,402,525

89.9%

112.7%

84.9%

92.1%

181.8%

80.6%

April 2017319,281,362

33,756,891

285,524,471

78.4%

36.7%

90.5%

72.2%

66.7%

72.9%

April 2018309,440,740

36,217,966

273,222,774

96.9%

107.3%

95.7%

70.0%

71.6%

69.8%

April 2019

240,804,618

33,931,673

206,872,945

77.8%

93.7%

75.7%

54.5%

67.1%

52.8%

10

Change(Ascomparedwithpreviousyear)
Membersthat offered
API ineach
surveymonth

Change(Ascomparedwithpreviousyear)
Membersthat did notoffer APIin eachsurveymonth

Change(Ascompared
with
April
2013)

Change(Ascomparedwith April
2013)

Change(Ascomparedwith April
2013)

Members
subject totheSurveyMembersthat offered
API in eachsurveymonth

Membersthat did notoffer APIin eachsurveymonth

Exhibit 13: Trading Volume of OTC Retail FX Margin Trading with Customer(By Members that offered/ did not offer API in all the surveys conducted every April from 2013 onwards)(Unit: million yen, %)SurveyMonth andYear

Trading Volume of OTC Retail FX Margin
Trading with Customers(Reference)
Membersthat have
Members
Members
conductedthat havethat have
OTC retail
not offeredofferedFX margin
API for all
API for all
trading forthe years
the years
all the years
from April
from April
from April
2013 to2013 to2013 to2019 (total
2019 (total
2019 otherof 31of threethan (A) andMembers)...
Members)..
(B) (total of
(B)
.(A)
14
Members)...
(C)

Change in(A)(Ascomparedwithpreviousyear)

Change in(B)(Ascomparedwithprevious
year)(Reference)
Change in(C)(Ascomparedwithpreviousyear)

Change in(A)(Ascomparedwith April
2013)

Change in(B)(Ascomparedwith April
2013)(Reference)
Change in(C)(Ascomparedwith April
2013)

April 2013

46,387,948

321,270,582

69,612,145

-

-

-

100.0%

100.0%

100.0%

April 2014

20,378,817

176,612,926

37,167,699

43.9%

55.0%

53.4%

43.9%

55.0%

53.4%

April 2015

41,039,288

328,437,524

76,129,224

201.4%

186.0%

204.8%

88.5%

102.2%

109.4%

April 2016

31,931,616

302,095,692

70,946,151

77.8%

92.0%

93.2%

68.8%

94.0%

101.9%

April 201724,653,767

232,928,639

57,758,592

77.2%

77.1%

81.4%

53.1%

72.5%

83.0%

April 201826,125,260

225,638,763

52,826,292

106.0%

96.9%

91.5%

56.3%

70.2%

75.9%

April 2019

20,779,470

166,041,047

50,876,195

79.5%

73.6%

96.3%

44.8%

51.7%

73.1%

<Item 5> Currency Options
Exhibit 14 shows the number of Members handling OTC retail FX margin trading that also handledcurrency option trading (limited to the currency options regulated by the Financial Instruments andExchange Act) every April from 2013 onwards.
Exhibit 14: Number of Members Handling OTC Retail FX Margin Trading that Also Handled
OTC Currency Option Trading(Unit: Company (Member))Number of Members that handled OTC Currency Options

Survey Month and Year

Note:

No. of Members that also handled retail BO trading [Note]

April 2013

8

6

April 201410

7

April 2015108

April 2016107

April 2017108

April 201897

April 201912

8

Retail BO means currency binary options for retail customers that are defined in the “Business Conduct Rules on Retail
OTC Binary Option Trading” published by the Association.

11

Part 2: Aggregation and Analysis of Cover Transaction Data for Over-The-Counter Retail
Foreign Exchange Margin Trading
1. Cover Transactions Subject to Aggregation and Attributes of Members
Table 1 shows the number of Members that handled OTC retail FX margin trading by type ofbusiness.
Table 1: Number of Members Handling OTC Retail FX Margin Trading by Type of Business(Unit: Company (Member))
Attribute of Member(Business Type)

Registered
Financial
Institution

Securities Company[Note 1]

Financial Futures
Company, etc. [Note 2]

Total

April 2012

3

34

27

64

April 2013

3

30

26

59

April 2014

5

31

25

61

April 2015

5

30

21

56

April 2016

5

30

16

51

April 2017

5

29

19

53

April 2018

6

29

18

53

April 2019

6

27

18

51

Survey Month and Year

Note 1:
Note 2:

Securities Company means a member of the Association that is also a member of the Japan Securities Dealers
Association (excluding OTC derivative members and special members).
Financial Futures Company, etc. means a member of the Association (including commodity futures trading companies)
other than a Registered Financial Institution and Securities Company.

2. Impact of FX Margin Trading in Japan on Foreign Exchange Market(1) Flow of Transactions
The flow of funds in OTC retail FX margin trading consists of the flow between a customer and a
Member that handles OTC retail FX margin trading (internal circulation) and the flow between a
Member that handles OTC retail FX margin trading and a firm used for cover transactions (external
circulation). Marry transactions that are offset within a Member that handles OTC retail FX margin
trading without carrying out a cover transaction with an outside firm are categorized as internal
circulation.
Furthermore, when we look at the retail FX margin trading in Japan through Tokyo Financial
Exchange’s Click365 that is regarded as a transaction in a domestic exchange, as it has a framework
under which an investor and a market maker are matched for the transaction, we can say that it has
similar characteristics to those of the external flow of the OTC retail FX margin trading.
As the trading volume that is regarded as external circulation in FX margin trading (external
circulation volume) increases, it may impact the FX market through firms used for covertransactions (as well as market makers).
Table 2 below shows the external circulation volume of retail FX margin trading.

12

Table 2: External Circulation Volume of FX Margin Trading(Unit: 100 million yen, %)OTC retail FX margin trading
SurveyMonth andYear

(1)
Trading
Volume with
Customers(2)
External Circulation
Volume(Total amount ofcover transactions)[Note 1](2)/(1) (%)

Internal
Circulation
Volume= (1) - (2)(3)
Click 365
Trading
Volume(4)
Total External
Circulation
Volume of FX
Margin Trading[Notes 2, 3]= (2) + (3)April 2012

1,278,975

700,28854.8%

578,687

49,157

749,445

April 2013

4,421,193

2,025,760

45.8%

2,395,432

74,8062,100,566

April 2014

2,382,526

986,06941.4%

1,396,457

23,3581,009,427

April 2015

4,530,411

1,818,843

40.1%

2,711,568

32,955

1,851,798

April 2016

4,073,991

1,681,387

41.3%

2,392,604

31,728

1,713,115

April 2017

3,192,813

1,265,381

39.6%

1,927,432

22,544

1,287,925

April 2018

3,094,407

1,271,873

41.1%

1,822,534

23,384

1,295,257

April 2019

2,408,046

1,042,452

43.3%

1,365,593

14,534

1,056,986

Note 1:
Note 2:
Note 3:

Based on the Monitoring Data. Hedge transactions and other transactions are included for members for which hedgetransactions and other proprietary trading are difficult to distinguish from cover transactions.
This figure represents the monthly trading volume disclosed by the Tokyo Financial Exchange multiplied by themonth-end settlement price.
There were a total of six MM (market makers) as of June 30, 2019 (Commerzbank, Deutsche Securities, Barclays Bank,
Goldman Sachs Japan, Nomura Securities, and MUFG Bank).

(2) Comparison with the Tokyo Foreign Exchange Market
As shown in Table 3, the total external circulation volume of FX margin trading accounted for 38.5%of the spot trading volume in the Tokyo foreign exchange market.

13

Table 3: Comparison between Spot Transactions in the Tokyo Foreign Exchange Market andExternal Circulation Volume(Unit: 100 million yen, %)Survey Monthand Year

Survey Results Announced by the Tokyo Foreign
Exchange Market Committee [Note 1](1)(2)
Spot Trading Volume
Of which, Transactions
with Non-Financial
Institution Customers(domestic) [Note 2](3)
Total External
Circulation Volume of
FX Margin Trading(The same as those in (4)in Table 2)(3)/(1)(%)(3)/(2)(%)

April 2012

1,614,486

319,237

749,44546.4%

234.8%

April 2013

3,077,047

793,050

2,100,566

68.3%

264.9%

April 2014

2,347,993

764,693

1,009,42743.0%

132.0%

April 2015

3,263,748

1,272,232

1,851,798

56.7%

145.6%

April 2016

2,638,980

588,956

1,713,11564.9%

290.9%

April 2017

2,086,902

445,068

1,287,925

61.7%

289.4%

April 2018

2,809,094

1,083,271

1,295,257

46.1%

119.6%

April 2019

2,741,964

1,108,325

1,056,986

38.5%

95.4%

Note 1:

Note 2:

Figures in (1) and (2) of the table above are calculated by multiplying the spot trading volume described in “[Reference
Table] <Table 1>” in the “Survey on Foreign Exchange Transaction Volume in Tokyo Foreign Exchange Market”
published by the Tokyo Foreign Exchange Market Committee by the yen/dollar spot rate as of 17:00 at the end of April
published by the Bank of Japan (80.74 yen in 2012, 97.83 yen in 2013, 102.51 in 2014, 118.91 yen in 2015, 108.40 yen
in 2016, 111.29 yen in 2017, 109.40 yen in 2018, and 111.675 yen in 2019).
We adopt the same definition of non-financial institution customers as those on the “Survey on Foreign Exchange
Transaction Volume in Tokyo Foreign Exchange Market” published by the Tokyo Foreign Exchange Market Committee.
In the survey, it is explained that transactions with FX margin trading operators should be recorded as transactions with
non-financial institution customers. However, it should be noted that such transactions can be classified into a category
other than those with non-financial institution customers if the FX margin trading operator is not a specialized FX margin
trading operator.

3. Cover Transactions for OTC Retail FX Margin Trading(1) Firms Used for Cover Transactions by Attribute 8 and Use of Cover Transactions
The number of firms for cover transactions used by the Members handling OTC retail FX margin
trading by attribute shown in Table 4 and the total number of Members handling OTC retail FX
margin trading that use firms for cover transactions (by attribute) shown in Table 4-2 indicate theattribute of firms used for cover transactions with which Members handling OTC retail FX margin
trading make a cover transaction.
The number of Members handling OTC retail FX margin trading is approximately 3.5 per firm used
for cover transactions. When we look at the attributes of firms used for cover transactions, thenumber of Members handling OTC retail FX margin trading is approximately 7.5 on average per
financial institution subject to reporting to the Tokyo Foreign Exchange Market Committee, which ishigher than the general average.

8

When we determine the attribute, financial institutions that participate in (report to) the “Survey on Foreign Exchange
Transaction Volume in Tokyo Foreign Exchange Market” are categorized into “Financial institutions subject to reporting to theTokyo Foreign Exchange Market Committee”; financial institutions that cooperate with the “Central Bank Survey on Foreign
Exchange and Derivatives (FX and Derivatives Survey)” conducted once in three years by the Bank of Japan (excluding thosecategorized into the financial institutions subject to reporting to the Tokyo Foreign Exchange Market Committee) are categorized
as “Financial institutions subject to reporting to the Bank of Japan”; and financial institutions, etc. that cooperate with the “FX
and Derivatives Survey” conducted by a central bank other than in Japan are categorized into “Other financial institutions, etc.
subject to reporting to a central bank (overseas).”14

Table 4: Number of Firms for Cover Transactions by Attribute Used by Members Handling OTC Retail
FX Margin Trading(Unit: Company (Operator))

Australia

Others [Note]

Grand Total

April 2012

20

15

2

3

35

13

22

7

7

4

1

3

55

April 2013

26

21

1

4

30

10

20

3

9

4

1

3

56

April 2014

25

18

1

6

32

12

20

2

9

4

3

2

57

April 2015

22

16

1

5

35

11

24

3

9

4

5

3

57

April 2016

22

16

1

5

36

13

23

3

8

4

4

4

58

April 2017

26

19

1

6

41

13

28

6

10

5

4

3

67

April 2018

25

19

1

5

43

13

30

6

11

4

4

5

68

April 2019

26

19

1

6

45

14

31

6

11

5

4

5

71

Survey Monthand Year[Note 2]

Note:
Note 2:

1. Total from (1) to (3)Singapore

2. Total offirms thatare not
categorized
into any of
the above
but are used
for covertransactions(total of (4)and (5))

U.K.

(3)
Other
financial
institutions,etc. subject
to reporting
to a central
bank(overseas)(excluding(1) and (2))

U.S.

(2)
Financial
institutions
subject toreporting to
the Bank ofJapan(excluding(1))(5) Overseas Operators Total(1)
Financial
institutions
subject toreporting to
the Tokyo
Foreign
Exchange
MarketCommittee(4) Domestic Operators

Attribute ofFirms Used for
Cover
Transactions

Malaysia, New Zealand, Ireland, Belize, Cyprus, UAE, Germany and Greece.
Corrections have been made to figures reported in the 2018 survey for the columns of 2 and 2(5) for April 2018.

15

Table 4-2: Total Number of Members Handling OTC Retail FX Margin Trading that Use Firms for
Cover Transactions (by Attribute) [Note 1](Unit: Company (Member))

Australia

Others [Note 2]Grand Total

April 2012

141

110

9

22

78

30

48

21

8

14

1

4

219

April 2013

140

109

2

29

63

27

36

5

13

14

1

3

203

April 2014

141

123

2

16

68

31

37

3

14

15

3

2

209

April 2015

128

113

1

14

68

24

44

4

16

16

5

3

196

April 2016

136

116

1

19

68

25

43

8

11

15

4

5

204

April 2017

152

132

1

19

79

29

50

11

13

16

4

6

231

April 2018

156

137

1

18

86

32

54

7

19

16

5

7

242

April 2019

163

143

1

19

86

31

55

7

20

17

5

6

249

1. Total from (1) to (3)Singapore

2. Total offirms thatare not
categorized
into any of
the above
but are used
for covertransactions(total of (4)and (5))

U.K.

(3)
Other
financial
institutions,etc. subject
to reporting
to a central
bank(overseas)(excluding(1) and (2))

U.S.

(2)
Financial
institutions
subject toreporting to
the Bank ofJapan(excluding(1))(5) Overseas Operators Total(1)
Financial
institutions
subject toreporting to
the Tokyo
Foreign
Exchange
MarketCommittee(4) Domestic Operators

Attribute ofFirms Used for
Cover
Transactions

SurveyMonth andYear
[Note 3]Note 1:
Note 2:
Note 3:This is a total aggregated figure after categorizing firms for cover transactions used by Members handling OTC retail FX
margin trading by attribute.
Malaysia, New Zealand, Ireland, Belize, Cyprus, UAE, Germany and Greece.
Corrections have been made to figures reported in the 2018 survey for the columns of 2(4) and (5) for April 2016, 2017,and 2018.

16

(2) Trading Volume of Cover Transactions by Attribute of Firms Used for Cover Transactions
As in Table 4 and Table 4-2, Table 5 and Table 5-2 show the trading volume of cover transactions
executed between Members that handle OTC retail FX margin trading and firms used for covertransactions after categorizing firms used for cover transactions by attribute. When we look at thedata by attribute, financial institutions subject to reporting to the Tokyo Foreign Exchange Market
Committee accounted for 49.2% of all cover transactions.
Table 6 shows the aggregated result by categorizing data in (1), (2), and (4) of the attributes of firms
used for cover transactions as shown in Table 5 as domestic cover transactions, and data in (3) and(5) as overseas cover transactions.
Table 5: Trading Volume of Cover Transactions by Attribute of Firms Used for CoverTransactions(Unit: 100 million yen)

(5)
Overseas
Operators
Total

Grand Total

2. OtherFirms Used
for CoverTransactions(Other than
1.)

Others [Note](3)
Financial
institutions,etc. subject
to reporting
to a central
bank(overseas)(excluding(1) and (2))

Australia(1)
Financial
institutions
subject toreporting to
the Tokyo
Foreign
Exchange
MarketCommittee

Singapore

1.Financial
Institutions(financial
institutions
included in
category (1)to (3))
Financial
Institutions(financial
institutions
included in
category (1)to (3))(2) Financial institutions subject to reporting to the
Bank of Japan (excluding (1))

Attribute ofFirms Used
for CoverTransactions

April 2012

334,156

312,265

021,890366,131234,011132,120

65,95331,861

29,604

3,781

918

700,288

April 2013

872,994537,7530335,241

1,152,765

929,451

223,31418,80860,095

136,950

5,972

1,486

2,025,760

SurveyMonth andYear

(4)
Domestic
Operators

U.S.

U.K.

April 2014

562,145546,098

0

16,047423,923

347,362

76,5609,942

32,667

29,775

3,089

1,084

986,069

April 2015

1,066,640

1,043,167

023,472752,202636,729

115,473

38,95336,862

18,156

20,976525

1,818,843

April 2016

841,822789,458

052,364

839,564

750,352

89,212

36,766

18,381

19,973

10,196

3,893

1,681,387

April 2017558,313521,352

036,960707,068

617,018

90,04938,19434,248

7,697

6,503

3,406

1,265,381

April 2018606,608

580,509

0

26,099665,264

553,916

111,168

46,44633,411

15,433

14,321

1,554

1,271,873

April 2019537,300

512,944024,356505,151

392,217

112,831

48,64036,684

16,229

9,907

1,370

1,042,452

Note:
Note 2:

Malaysia, New Zealand, Ireland, Belize, Cyprus, UAE, Germany and Greece.
Corrections have been made to figures reported in the 2018 survey for the columns of 2(4) and (5) for April 2016 and
2018.

17

Table 5-2: Trading Volume of Cover Transactions by Attribute of Firms Used for Cover Transactions (As aPercentage of Grand Total in Each Month by Attribute)(Unit: %)1. Financial
Institutions(financial
institutions
included in
category (1)to (3))
Financial
Institutions(financial
institutions
included in
categories (1)to (3))(1)Financial
institutions
subject toreporting to
the Tokyo
Foreign
Exchange
MarketCommittee(2)
Financial
institutions
subject toreporting to
the Bank ofJapan(excluding
(1))

(3)
Financial
institutions,etc. subject
to reporting
to a central
bank(overseas)(excluding(1) and (2))

2. Other
Firms
Used forCover
Transactions (Otherthan 1.)(4)
Domestic
Operators(5)
Overseas
Operators
Total

U.S.

U.K.

Singapore

Australia

Others [Note]

Grand Total

Attribute ofFirms Used for
Cover
Transactions

April 2012

47.7%

44.6%

0.0%

3.1%

52.3%

33.4%

18.9%

9.4%

4.5%

4.2%

0.5%

0.1%

100.0%

April 2013

43.1%

26.5%

0.0%

16.5%

56.9%

45.9%

11.0%

0.9%

3.0%

6.8%

0.3%

0.1%

100.0%

April 2014

57.0%

55.4%

0.0%

1.6%

43.0%

35.2%

7.8%

1.0%

3.3%

3.0%

0.3%

0.1%

100.0%

April 2015

58.6%

57.4%

0.0%

1.3%

41.4%

35.0%

6.3%

2.1%

2.0%

1.0%

1.2%

0.0%

100.0%

April 2016

50.1%

47.0%

0.0%

3.1%

49.9%

44.6%

5.3%

2.2%

1.1%

1.2%

0.6%

0.2%

100.0%

April 2017

44.1%

41.2%

0.0%

2.9%

55.9%

48.8%

7.1%

3.0%

2.7%

0.6%

0.5%

0.3%

100.0%

April 2018

47.7%

45.6%

0.0%

2.1%

52.3%

43.6%

8.8%

3.7%

2.6%

1.2%

1.1%

0.1%

100.0%

51.5%

49.2%

0.0%

2.3%

48.5%

37.6%

10.8%

4.7%

3.5%

1.6%

1.0%

0.1%

100.0%

SurveyMonth andYear
[Note 2]

April 2019

Note:
Note 2:

Malaysia, New Zealand, Ireland, Belize, Cyprus, UAE, Germany and Greece.
Corrections have been made to figures reported in the 2018 survey for the columns of 2(4) and (5) for April 2018.

Table 6: Change of Trading Volume of Cover Transactions (Domestic and Overseas)(Unit: 100 million yen, %)Survey month andyear [Note]

Trading Volume of
Cover Transactions(Total)Domestic Cover Transactions
Trading Volume

Percentage
of Total

Overseas Cover Transactions
Trading Volume

Percentage
of Total

April 2012

700,288546,27678.0%

154,01022.0%

April 2013

2,025,760

1,467,204

72.4%

558,555

27.6%

April 2014

986,069

893,461

90.6%

92,607

9.4%

April 2015

1,818,843

1,679,896

92.4%

138,946

7.6%

April 2016

1,681,387

1,539,810

91.6%

141,576

8.4%

April 2017

1,265,381

1,138,371

90.0%

127,009

10.0%

April 2018

1,271,873

1,134,425

89.2%

137,447

10.8%

April 2019

1,042,452

905,16186.8%

137,290

13.2%

Note:

Corrections have been made to figures reported in the 2018 survey for the trading volume of cover transactions (domestic
and overseas) for April 2016 and 2018.

18

(3) Trading Volume of Cover Transactions Based on the Trading Volume of OTC Retail FX
Margin Trading
In order to show the trading volume of cover transactions in connection with the trading volume of
OTC retail FX margin trading (with customers), we firstly rank Members that handle OTC retail FX
margin trading by their trading volume of OTC retail FX margin trading (with customers) in eachsurvey year and month, and then categorize them into six classes (e.g. from first to third). Tables 7 to
10 show data of OTC retail FX margin trading categorized by the above six classes.
Table 7: Trading Volume of OTC Retail FX Margin Trading (with Customers) (by ranking
class based on the trading volume with customers)(Unit: 100 million yen)
Survey Monthand Year

1st to 3rdplace

4th to 10thplace

11th to 20thplace

21st to 30thplace

31st to 40thplace

41st placeand more

April 2012

559,208

438,497

176,432

71,18528,1505,500

1,278,975

April 2013

2,093,296

1,523,692

586,132

163,396

49,501

5,173

4,421,193

April 2014

1,294,840

675,578

306,871

70,00527,0848,145

2,382,526

April 2015

2,476,761

1,367,613

497,839

134,886

46,896

6,415

4,530,411

April 2016

2,064,879

1,426,025

457,247

89,27134,0172,550

4,073,991

April 2017

1,592,561

1,119,193

381,791

72,77722,921

3,566

3,192,813

April 2018

1,532,188

1,088,132

372,326

78,89920,261

2,599

3,094,407

April 2019

1,105,735

878,668

340,876

64,972

13,862

3,930

2,408,046

Total

Table 8: Trading Volume of Cover Transactions by Members Handling OTC Retail FX Margin
Trading by Ranking Class Based on the Trading Volume of OTC Retail FX Margin Tradingwith Customers(Unit: 100 million yen)
Survey Monthand Year

1st to 3rdplace

4th to 10thplace

11th to 20thplace

21st to 30thplace

31st to 40thplace

41st placeand more

April 2012

64,558

390,440

144,234

63,20433,1504,699

700,288

April 2013

467,500

863,764

519,334

122,196

47,995

4,969

2,025,760

April 2014

264,476354,287

275,918

58,87824,4198,089

986,069

April 2015

405,016

902,433

337,143

128,655

39,271

6,323

1,818,843

April 2016

331,651

929,141

301,644

90,70325,9472,299

1,681,387

April 2017

149,716

726,007

301,578

65,654

18,584

3,840

1,265,381

April 2018

195,368

685,475

292,146

79,95816,4662,457

1,271,873

April 2019

149,598

538,506

279,607

57,343

13,433

3,962

1,042,452

19

Total

Table 9: Ratio of Trading Volume of Cover Transaction by Ranking Class Based on the
Trading Volume of OTC Retail FX Margin Trading to the Total Trading Volume of CoverTransactions(Unit: %)Survey Monthand Year

1st to 3rdplace

4th to 10thplace

11th to 20thplace

21st to 30thplace

31st to 40thplace

41st place andmore

April 2012

9.2%

55.8%

20.6%

9.0%

4.7%

0.7%

April 2013

23.1%

42.6%

25.6%

6.0%

2.4%

0.2%

April 2014

26.8%

35.9%

28.0%

6.0%

2.5%

0.8%

April 2015

22.3%

49.6%

18.5%

7.1%

2.2%

0.3%

April 2016

19.7%

55.3%

17.9%

5.4%

1.5%

0.1%

April 2017

11.8%

57.4%

23.8%

5.2%

1.5%

0.3%

April 2018

15.4%

53.9%

23.0%

6.3%

1.3%

0.2%

April 2019

14.4%

51.7%

26.8%

5.5%

1.3%

0.4%

Table 10: Ratio of Trading Volume of Cover Transactions (Table 8) to the Trading Volume of
OTC Retail FX Margin Trading (Table 7)(by ranking class based on the trading volume of OTC retail FX margin trading withcustomers)(Unit: % [Note])
Survey Monthand Year

1st to 3rdplace

4th to 10thplace

11th to 20thplace

21st to 30thplace

31st to 40thplace

41st place andmore

April 2012

11.5%

89.0%

81.8%

88.8%

117.8%

85.4%

April 2013

22.3%

56.7%

88.6%

74.8%

97.0%

96.1%

April 2014

20.4%

52.4%

89.9%

84.1%

90.2%

99.3%

April 2015

16.4%

66.0%

67.7%

95.4%

83.7%

98.6%

April 2016

16.1%

65.2%

66.0%

101.6%

76.3%

90.1%

April 2017

9.4%

64.9%

79.0%

90.2%

81.1%

107.7%

April 2018

12.8%

63.0%

78.5%

101.3%

81.3%

94.6%

April 2019

13.5%

61.3%

82.0%

88.3%

96.9%

100.8%

Note:

It is possible that the trading volume of cover transactions may exceed the trading volume of OTC retail FX margin
trading (i.e. over 100%) due to the transfer of open positions following a change of the firm used for covertransactions or transaction errors.

20

Conclusion (General Comments and Considerations)

The following is a conclusion (general comments and considerations) of the survey:
When we look at the business model for OTC retail FX margin trading that is executed by Members
handling OTC retail FX margin trading, as indicated in last year’s report, we found a trend that
Members whose trading volume of OTC retail FX margin trading with customers is larger use
several firms for cover transactions, and conduct marry transactions. On the other hand, Members
whose trading volume of OTC retail FX margin trading is smaller adopt a white label form, use asingle firm for cover transactions, and do not conduct marry transactions. When we rank Members
handling OTC retail FX margin trading by the trading volume to divide them into classes, we foundmembers in a class with a smaller trading volume had a higher share of cover transactions.
Automatic trading tools are provided this year by 21 Members handling OTC retail FX margin
trading, almost the same as last year (20 Members), although fewer of them offer internallydeveloped tools than in 2018. Out of the total trading volume of OTC retail FX margin trading withcustomers executed by all the Members handling OTC retail FX margin trading, the trading volume
executed by the Members that have provided automatic trading tools accounted for approximately
24.1% (about 28.2% in 2018). The share has been around 25% in recent years. The trading volume
of OTC retail FX margin trading with customers executed by operators that have continuously
provided automatic trading tools since FY 2013 accounted for roughly 4.8% (about 2.4% in 2018) of
the total trading volume of OTC retail FX margin trading with customers executed by operators thathave conducted such trading for all the survey years since 2013. In this regard, provision of
automatic trading tools has scarcely contributed to a specific increase of trading volume of OTC
retail FX margin trading with customers executed by the Members.
When we look at API, although the number of Members handling OTC retail FX margin trading andproviding API has been decreasing since 2015 (this year one Member fewer than in 2018), thetrading volume of OTC retail FX margin trading with customers executed by the Members that haveprovided API was approximately 14.1% (about 11.7% in 2018) of the total trading volume of all themembers handling OTC retail FX margin trading with customers. The trading volume of OTC retail
FX margin trading with customers executed by operators that have continuously provided API since
FY 2013 accounted for roughly 8.7% (about 8.6% in 2018) of the total trading volume of OTC retail
FX margin trading with customers executed by operators that have conducted such trading for all thesurvey years since FY 2013, which suggests that, despite a slight increase in the trade volume from2018, provision of API has scarcely contributed to a specific increase of trading volume of OTC
retail FX margin trading with customers executed by the Members.
Judging from the fact that compared with the results of spot trading at the foreign exchange market
of around 274 trillion yen released by the Tokyo Foreign Exchange Market Committee survey,
transactions by non-financial institution customers (domestic) into which transactions by Members
handling OTC retail FX margin trading are categorized have generally been on the rise with theexternal circulation of OTC retail FX margin trading reaching approximately 104 trillion yen, it
appears that OTC retail FX margin trading has a certain impact on the foreign exchange market, asshown in last year’s report.
As for firms used for cover transactions by attribute as well as usage and trading volume of covertransactions, the total number of Members handling OTC retail FX margin trading that use firms forcover transactions has been increasing for recent years, which indicates an upward trend in thenumber of counterparts for Members handling OTC retail FX margin trading in cover transactions.
This year’s survey also confirmed a trend that the ratio of financial institutions that participate in(report to) the “Survey on Foreign Exchange Transaction Volume in Tokyo Foreign Exchange
Market” is higher compared with firms belonging to other attributes. This indicates that the business
relationship has continuously been established between Members that handle OTC retail FX margin
trading and financial institutions that participate in (report to) the “Survey on Foreign Exchange21

Transaction Volume in Tokyo Foreign Exchange Market” through cover transactions for OTC retail
FX margin trading.
(Written by Kurakata at Research Department of FFAJ)• The Financial Futures Association of Japan does not guarantee that data and information provide in this document are
accurate, correct, and/or up-to-date although it has made every effort to ensure such accuracy, correctness, and timeliness.
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