Japannext Co., Ltd.

Japannext Co., Ltd. is a pioneering entity in Japan's financial markets, established in November 2006. The company was founded with the support of Japan's top four online brokers: SBI Securities, Rakuten Securities, Orix Securities, and Click Securities. Its primary aim was to create a comprehensive Proprietary Trading System (PTS) venue, replicating the Electronic Communication Networks (ECNs) prevalent in the United States. This initiative was part of a broader effort to develop an after-hours market for online users in Japan.
== Historical Development ==
In August 2007, Japannext launched a nighttime market utilizing a system licensed from Atos Euronext Market Solutions (AEMS), which was previously employed by the Euronext exchange in Europe. This development was further bolstered when Goldman Sachs Japan became a shareholder and liquidity provider, aiding in the promotion and development of the nighttime ECN market in Japan.
In October 2008, Japannext expanded its operations by launching a daytime market. This move was aimed at meeting the needs of global brokerage houses and fostering competition and innovation within the Japanese equity market. Japannext introduced several advanced features such as Immediate or Cancel (IOC), Fill or Kill (FOK), and Iceberg (Reserved) order types, along with decimal tick sizes, which were already in use in the US and European exchanges. This daytime market operated alongside incumbent exchanges like the Tokyo Stock Exchange (TSE) and Osaka Securities Exchange (OSE), marking a significant milestone as the first of its kind in Japan.
== Current Operations ==
Today, Japannext is recognized as the oldest thriving PTS venue in Japan, boasting 33 active members, including both local and global brokerage houses. It holds a 5% market share in Japan's financial markets. Japannext continues to contribute actively to public forums, seminars, and private discussions, consistently striving to drive innovations in the Japanese capital market. Japannext continues to expand its market presence by attracting both domestic and international securities firms. The company has invested in initiatives to increase liquidity, such as expanding margin trading and decreasing tick sizes, which have bolstered its market share and attracted foreign investment.
Among its current shareholders are SBI Group, Virtu Financial Group, The Goldman Sachs Group Inc., Cboe Global Markets and others.
=== Market Position ===
Japannext has established itself as the largest PTS trading venue in Japan, providing a competitive alternative to the Tokyo Stock Exchange. The company manages four separate markets—J, X, U, and the Night Market—each designed to cater to the diverse needs of institutional traders. Japannext's Night Market, in particular, offers extended trading hours that overlap with the U.S. market, providing global investors with increased liquidity and trading opportunities.
== Technological Advancements ==
Japannext has made significant investments in technology to ensure the reliability and efficiency of its trading systems. In 2011, the company partnered with NASDAQ to launch a new trading system, enhancing latency and throughput capacity. This shift to NASDAQ's technology has allowed Japannext to offer a low-latency trading environment that meets international standards. This technological infrastructure supports pre-trade risk checking and real-time execution reporting, enhancing the efficiency and reliability of its trading platform.
Regulatory Compliance
Japannext operates in full compliance with the regulations set forth for PTS venues in Japan. It maintains a dedicated trade surveillance team to monitor all trading activities, ensuring fairness and transparency in its operations. It is a member of the Japan Securities Dealers Association (JSDA) and the Japan Investor Protection Fund (JIPF).
== Products and Services ==
=== Key Products and Services ===
Japannext offers a range of trading services, including equity markets for common stocks, ETFs, REITs, and bond markets. The company provides order-driven continuous matching with priority given to yield and time, supporting various order types such as limit, IOC, FOK, and post-only.
== Key People ==
=== Board of Directors ===
* Representative Director CEO: Masakatsu Yamada
* Director: Yoshitaka Kitao
* Director: Kentaro Nakanishi
* Director: Douglas A. Cifu
* Director: Satoe Kusakabe
* Director: Jiro Eguchi
* Director: Yasuyuki Ogawa
* Auditor: Shizuka Hirayama
== References ==
Category:Financial Services Companies
Category:Proprietary Trading Systems
Category:Japanese Financial Markets
Category:Alternative Trading Venues
Category:Electronic Trading Platforms