Japan eyes Mifid-like oversight for HFT

Author: Karry Lai | Published: 5 Feb 2018

Fund managers and traders engaged in high-frequency trading (HFT) are expected to be directly affected by a new registration requirement the Japanese government is introducing.

The new rules, which will come into force on April 1, will compel HFT operators to maintain strict records of risk control systems and trading data, in a similar way to requirements under the new Markets in Financial Instruments Directive (Mifid II), in Europe.

Foreign HFT firms that want to continue operating in the Japanese market have to submit their registration application to the Financial Services Agency (JFSA) by the end of September 2018. Brokers will be forbidden from accepting any HFT order from traders that are not properly registered. To ensure investor protection, exchanges can investigate operators directly.

More oversight

HFT plays a significant role in the Japanese financial markets. According to the Working Group on Financial Markets of the Financial System Council, in...



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