# The Acquisition: Japan Exchange Group CIO Yoshinori Suzuki

Yoshinori Suzuki, CIO of Japan Exchange Group, has overseen a massive technology overhaul during his tenure at the organization—but it’s an overhaul that he never expected to be in charge of just a few years ago. By Anthony Malakian, with photos by James Whitlow Delano

In Japan, it is traditional to work your entire career for one company. While that may be changing, when Yoshinori Suzuki graduated from Tokyo Denki University in 1972, this type of loyalty was certainly the prevailing cultural norm in Tokyo. Suzuki had spent the first 34 years of his career in various roles at Nippon Telegraph & Telephone (NTT), the Japanese telecom behemoth. By 2006 ─ now the president and CEO of NTT Data Force and 57 years old ─ barring a massive round of layoffs, there was no reason to believe that he wouldn’t retire as an employee of NTT.

It was at this time that the Tokyo Stock Exchange (TSE) had experienced several significant IT failures. The exchange operator was embarrassed, its staff demoralized. In need of help, TSE’s then-president Taizo Nishimuro called NTT’s then-president Norio Wada and explained that he was looking for a top candidate from the ranks of NTT to take over the role of CIO at the exchange operator.

NTT had no desire to let Suzuki go, and Suzuki had no desire to leave the company where he began his professional career. But Nishimuro told Wada that it was in NTT’s best interests for the TSE to get its infrastructure in order. After all, a reliable exchange was vital to growing Japan’s economy, and a strong economy is good for NTT’s bottom line.

So, reluctantly, Suzuki was sent to the TSE ─ almost like a baseball player being traded at the tail end of his career after a storied run with his previous team.

“The president of TSE at the time made a request to NTT that they would like to get a CIO candidate from the NTT group,” Suzuki recalls. “[Mr. Wada] told me that this is a big issue for the Japanese economy and NTT group had to help out. He said that TSE was in need of a person who could take on such a big role, and that person was me. But at that time, I had no background on trading systems; I only had experience working with local banks.”

They say that blessings come in disguise, and for Suzuki, the move would lead to the two most exciting projects of his career: the launch of the arrowhead trading platform and overseeing the merger of the TSE’s platforms with that of the Osaka Securities Exchange (OSE).

Two Become One
The Tokyo Stock Exchange building is a magnificent piece of architecture. Its exterior is comprised of a coarse granite that sparkles in the sunlight. Its shape is slightly trapezoidal. On the inside, there is a trading floor that looks like it was taken from the set of a Star Trek movie reboot, and certain corridors have an imposing, towering feel.

But all in all, the building is as quiet as a shrine. There aren’t any traders on the floor, save for a handful of people surveying the market, making sure that nothing is out of whack. It’s electronic trading to the highest degree.

Suzuki is sitting in a plush room ─ there’s a mahogany table surrounded by reserved yet finely upholstered cream-white sofas and chairs. He speaks some English, but prefers to conduct this interview in his native Japanese. We are meeting to discuss his career and the path forward for the Japan Exchange Group (JPX), the new name for the newly merged TSE and OSE. Stuart Davis and Natsuho Torii from JPX’s communications department are on hand to translate.

In 2013, the TSE completed its merger with the OSE, making the resulting JPX the third-largest equities market, globally. Suzuki says TSE CEO Atsushi Saito felt that the TSE lagged behind its competitors when it came to the globalization of the company. The TSE didn’t have a strong presence on the world stage and it was weak when it came to its derivatives market, which was a source of strength for Osaka.

“In order to globalize, the first thing that needed to be done was to establish a derivatives market to a certain scale within Japan,” Suzuki says. “Obviously, there’s a difference in the potential growth of equities and derivatives, and because we believe there’s greater potential for growth of derivatives than equities, Mr. Saito did not believe that the exchange system would sustain itself with just equities alone.”

As with most mergers, the primary challenge was deciding which platforms to use, and what should be ditched. The TSE arrowhead platform was tapped for equities trading. For derivatives, the exchange went with J-Gate, which the OSE had adopted from Nasdaq OMX. For clearing, JPX decided on the Japan Securities Clearing Corporation (JSCC) Clearing System.

With these decisions made, though, JPX also announced in February that it was looking to invest in a new derivatives trading system and issued a request for proposal (RFP).

“In March 2014 we integrated the derivatives system to J-Gate, but it was a generation older and used a system called the Clicks System, which limits the type of server that can be used,” Suzuki says. “Based on this, JPX began to construct a next generation derivatives trading system. The development of this system will aim to produce a highly convenient and globally competitive system, which will serve the derivatives market for the medium-to-long-term future.”

Prior to the arrowhead build, TSE executives went to New York, Chicago and London to see how a variety of platforms worked. Suzuki visited NYSE Euronext in March and has also visited the exchanges in Hong Kong and Australia.

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