TSE Makes New Rules for Swift Resumption of Trading

Tokyo, March 25 (Jiji Press)--The Tokyo Stock Exchange on Thursday drew up new rules to swiftly resume trading in case of a system failure, which will go into effect in April. The new rules give priority to restarting trading within the same day of a system failure. The TSE will be allowed to cancel buy and sell orders before resuming trading. A system glitch on Oct. 1 led to a full-day shutdown of the major Japanese stock market, highlighting a lack of rules for resuming trading. The TSE announced the new rules after discussions with market participants including securities firms following the glitch. The new rules stipulate that the TSE contact all securities firms if it aims to resume trading within the same day of a system glitch. Trading will restart when the share of trading value of securities firms that will be able to trade after the resumption is 50 pct or more. Some other criteria need to be met as well, including the minimum share of individual investors. In order to maintain proper price formation and liquidity, the TSE will not resume trading unless it can secure at least 15 minutes for accepting trading orders. Trading time of at least 15 minutes also needs to be secured. Whether to allow the TSE to extend trading hours in case of a system glitch remains to be discussed. The TSE's parent, Japan Exchange Group Inc. <8697>, has set up a section on its website to update information on a system failure every 30 minutes. Twitter will also be used to provide such news. Starting in April, the TSE will conduct drills with securities firms to simulate the occurrence of a system glitch in an effort to improve the effectiveness of the new rules. END