Nikkei reports Japan's Financial Services Agency (FSA) will study rule changes
to redraw the boundary between proprietary/private trading systems (PTS) and
formal exchanges as PTS gain market acceptance. PTS offer finer tick sizes and
after-hours trading. Under current rules the FSA caps PTS at 10% of total
trading value in Japanese stocks; venues that exceed a 10% share for six
consecutive months and meet other conditions must apply for an exchange licence,
which would prevent them trading Tokyo Stock Exchange-listed stocks unless
issuers pursue dual listings — a largely impractical route. To avoid the licence
trigger, some platforms limit activity to keep market share below 10%. The FSA
expects to form a study group as early as this fiscal year to consider
adjustments, including raising the 10% cap.
