Okasan Securities Starts Trading on Chi-X Japan, Selects Fidessa SOR

The Fidessa SOR will enable Okasan Securities to trade client orders by automatically comparing price and liquidity between the Tokyo Stock Exchange (TSE) and alternative venues including PTSs and broker dark pools, in order to achieve best execution.

Fidessa is also planning to provide access to Chi-X Japan's Mid Peg order type and the 'Chi-Match' VWAP Cross market, as well as to the low latency Japanese PTS, SBI Japannext.

As Okasan Securities is already a client of Fidessa, the SOR system and algorithmic trading platform will be integrated into the firm's existing Fidessa Trading Platform.

"In order to strengthen our execution services for our institutional clients, we made the decision to enable PTS trading by implementing SOR through our existing system," says Shirou Sato, senior general manager in the equities department at Okasan Securities. "We will be able to improve the quality of our institutional agency trading business and provide our clients with best execution."

PTSs, TOB and TSE
PTSs, which are the equivalent of Alternative Trading Systems (ATS) and Electronic Communication Networks (ECN) in the US and Multi-Trading Facilities (MTF) in Europe, have grown over the past few years, mostly thanks to the change in regulation in the Take-over Bid (TOB) rule, which promotes trading through PTSs.

The TOB was recently eased by the Japanese regulator, the Financial Services Agency (FSA), which decided to exempt the trades that are not placed on traditional exchanges from a rule forcing investors to make a takeover bid if they acquire more than five percent of a company through off-exchange transactions with more than 10 shareholders.

This move is expected to encourage competition and support the rise of alternative trading systems as the two main Japanese exchanges the Tokyo Stock Exchange Group and the Osaka Securities Exchange get set to merge.