Japan Exchange Group Inc.

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Japan Exchange Group
JPX-200px.jpg
Founded 2013
Headquarters Tokyo
Key People Akira Kiyota, CEO
Website https://www.jpx.co.jp/

Japan Exchange Group (JPX) is the holding company created by the merger of the Tokyo Stock Exchange (TSE) and Osaka Securities Exchange (OSE), completed in January 2013. The TSE offers cash equities while the OSE operates derivatives trading.

The exchanges completed their cash equities integration in July 2013 and finished consolidating derivatives trading in March 2014. [1] [2]

JPX integrated the derivatives market operated by Tokyo Stock Exchange into that of Osaka Exchange (formerly Osaka Securities Exchange), and all trading operations were consolidated onto J-GATE, its electronic trading platform. The combined exchange offers derivatives products based on the Nikkei 225, TOPIX, and Japanese government bonds on a single market. [3]

JPX announced the purchase of the Tokyo Commodity Exchange in July 2019 for $50 million, making it a wholly owned subsidiary in September 2019. The two exchanges planned to fully merge in the summer of 2020.[4]

The exchange was ranked the 19th largest derivatives exchange in the world based on volume in 2021, according to the Futures Industry Association Annual Volume Survey. The exchange reported derivatives volume of 333,638,732, down 26.5% from 454,261,835 in the previous year.[5]

History[edit]

Japan Exchange Group went public via a stock swap and listed on the TSE January 4, 2013. Shares of the stock fell 9.4 percent on its first day, ranking it tenth among global exchange groups. [6]

The company's clearinghouse is Japan Securities Clearing Corp. Its self-regulatory body is Japan Exchange Regulation (formerly Tokyo Stock Exchange Regulation).[7] [8]

On June 25, 2019, Japan Exchange Group and the Shanghai Stock Exchange launched Japan-China ETF Connectivity, a joint program that allows joint listings of exchange traded funds (ETF)s. There have been Chinese ETFs listed in Japan prior to the program, but this marks the first time Japanese ETFs were listed in China.[9]

JPX announced the purchase of the Tokyo Commodity Exchange in July 2019 for $50 million, making it a wholly owned subsidiary in September 2019. The two exchanges had signed a non-disclosure agreement in October 2018 regarding a possible merger.[10][11]

Products and Services[edit]

The exchange offers cash stocks and derivatives, including futures and options on Japanese government bonds and international stock price indices such as TOPIX and Nikkei 225.[12] [13]

JPX launched trading in S&P CNX Nifty Index futures on March 24, 2014, along with futures on the Nikkei 225 Index. [14] It also plans to offer 20-year Japanese government bond futures starting April 7.[15]

Osaka Exchange launched the J-GATE platform on July 19, 2016.[16]

Sustainability at JPX[edit]

Complete information about JPX's corporate commitment to sustainability can be found on its website here.

JPX has been active in encouraging sustainability and advancing ESG initiatives among its members and investors.[17]

JPX joined the UN Sustainable Stock Exchanges Initiative (SSE) in 2017, and announced its support for the Task Force on Climate-related Financial Disclosures (TCFD) in 2018. In 2018, JPX established a Sustainability Committee, naming the group CEO as its chair. As a market operator, JPX has researched sustainability-related programs in Japan and overseas and actively communicated information on these activities. The 2020 release of the Practical Handbook for ESG Disclosure and the launch of the JPX ESG Knowledge Hub supported listed companies in their voluntary efforts to disclose ESG information. [18]In December 2020, JPX submitted a comment letter in support of the IFRS Foundation’s work to create a unified sustainability reporting standard.[19]

In April 2021, JPX established a Sustainability Department.[20]

ESG-related products[edit]

In July 2022, JPX and JPX Market Innovation & Research, Inc. (JPXI) launched the ESG Bond Information Platform. The platform was developed by the JPX Sustainable Finance Platform Development Working Group, which was established in October 2021. The ESG Bond Information Platform brings together information on securities, issuers, use of proceeds/impact and external reviews. The platform is a tool to improve convenience for market players and make products more visible. [21] The platform was launched with the cooperation of seven securities companies that act as lead underwriters for bond issuance.[22]

In April 2022, LSEG’s index business, FTSE Russell, JPX and Tokyo Stock Exchange (TSE) launched the FTSE JPX Net Zero Japan Index Series, an expansion of an existing partnership developing climate indices based on the TOPIX 500, which provides diversified exposure across the Japanese stock market. [23]. The index series consists of the FTSE JPX Net Zero Japan 500 Index and FTSE JPX Net Zero Japan 200 Index.

The series has these features:

  • Fossil fuel reserves: Underweight companies with fossil fuel reserves
  • Carbon emissions: Over/underweight companies according to their greenhouse gas emissions whilst applying sector neutrality
  • Green revenues: Overweight companies generating revenues from the global green economy
  • TPI Management Quality: Over/underweight companies based on their management of risks and opportunities related to the low-carbon transition and how they are addressing key aspects of the Taskforce on Climate-related Financial Disclosures (TCFD)
  • TPI Carbon Performance: Over/underweight companies according to the extent to which they are committed to carbon emission pathways that are aligned with 2DC/below 2DC warming scenarios.

In addition, the index series adheres to the EU’s Climate Transition Benchmark (CTB) standards. [24]

Key People[edit]

  • Akira Kiyota, Director & Representative Executive Officer, Group CEO

Derivatives Contract Volume[edit]

Year Total Annual Volume* Percent Change
2021 333,638,732 (-) 26.5%
2020 454,261,835 25.8%
2019 361,095,467 (-) 12.3%
2018 411,945,912 27.7%
2017 322,408,620 20.4%
2016 337,537,333 (-) 6.6%
2015 361,459,935 16.7%
2014 309,732,384 (-) 15.4%
2013 366,234,062 --

References[edit]

  1. Tokyo and Osaka Bourses Merge as Japan Exchange Group. Waters Technology.
  2. Bright Futures for Japan's Unified Futures?. The Wall Street Journal.
  3. Integration of Derivatives Market at JPX. JPX.
  4. One-stop bourse handling stocks, commodities to launch in summer 2020. The Mainichi.
  5. 2021 Annual ETD Volume Review. Futures Industry Association.
  6. Japan ‘super-bourse’ makes rocky start. The Financial Times.
  7. Japan Exchange Group to Be Launched Tues., Uniting TSE, OSE. JIJI Press.
  8. History. Japan Exchange Group.
  9. Ceremonies to Commemorate Launch of Japan-China ETF Connectivity. JPX.
  10. Japan Exchange Group, TOCOM to merge this year: sources. Reuters.
  11. JPX set to acquire Tokyo Commodity Exchange; Merger aims to raise volumes and boost Tokyo as a financial centre. FT.
  12. New Year's Message From Japan Exchange Group CEO, Atsushi Saito. MondoVisione.
  13. TSE faces international challenge. The Japan News.
  14. Agreement on Launch of S&P CNX Nifty Futures in Japan. JPX Press Release.
  15. Bright Future for Japan’s Unified Futures?. WSJ.
  16. The Release of New Derivatives Trading Platform "J-GATE". Japan Exchange Group.
  17. Sustainability. JPX.
  18. Sustainability: Top Message. JPX.
  19. Submission of a comment letter on the IFRS Foundation's Consultation Paper on Sustainability Reporting. JPX.
  20. Submission of a comment letter on the IFRS Foundation's Consultation Paper on Sustainability Reporting. JPX.
  21. JPX Launches ESG Bond Information Platform. MarketsMedia.
  22. JPX and JPXI Launch ESG Bond Information Platform. JPX.
  23. LSEG and JPX to develop net zero climate indices covering Japan’s equity market. LSEG.
  24. FTSE Russell and JPX launch new net zero climate indices: FTSE JPX Net Zero Japan Index Series. JPX.