Private Trading Systems: Japan's Proto-ECNs

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5 April 2001


Boston, MA, USA April 4, 2001

Electronic Private Trading Systems in Japan

Off-Exchange Trading Comes to Japan

Recent months have seen the appearance of private trading systems, Japan's first off-exchange platforms for equities trading. Operated by securities firms, PTS systems seek to attract order flow by offering after-hours trading convenience to retail investors and execution advantages to institutional investors. In a new report entitled "Private Trading Systems: Japan's Proto-ECNs," Celent Communications presents an overview of both retail and institutional PTS systems, as well as the regulatory framework governing them, and assesses their long-term potential in Japan's equities market.

Japanese Private Trading Systems

Retail Institutional
Goldman Sachs Moon Trade JBT BB Kabushiki Super Trade
Monex Nighter JapanCross Securities

According to Neil Katkov of Celent, "Like other recent efforts to jump-start Japan's equities markets, PTS systems will generate only limited trading volume in the short to medium term. Nevertheless, we believe they will have a strong influence on market structure far exceeding their size. Like ECNs in the US, PTS systems have introduced the potential for new trading centers to arise in competition with the existing exchanges. In fact, PTS systems may well lead to the creation of a Nasdaq-like shared quotation and trading system competing directly for trade volume with Japan's listed and OTC markets."

A Table of Contents

of Celent Communication's Institutional Securities & Investments research service can download the report electronically by clicking on the icon to the left.