Self-Regulatory Operations

About Self-Regulatory Operations

TFX conducts self-regulatory operations to ensure fairness in market derivatives transactions on the financial instruments exchange market created by TFX, and to protect investors. Self-regulatory  operations are prescribed by the Financial Instruments and Exchange Act (the “FIEA”), of which the operations relevant to TFX are as follows.

  1. Investigating whether Trading Members are operating services in compliance with the FIEA, the exchange’s regulations, and other relevant rules.
  2. Examining whether transactions executed in the exchange market are fair.
  3. Examining whether Trading Members meet the criteria for trading membership
  4. Taking disciplinary measures against Trading Members who have violated the FIEA, the exchange’s regulations, or other relevant rules.
  5. Formulating the exchange’s regulations concerning 1 to 4 above.

As one of its management philosophies, TFX pledges to “establish a fair, reliable, and convenient financial instruments market as public infrastructure and contribute to sound financial and economic development in Japan.” Self-regulatory operations represent TFX’s efforts to achieve this management philosophy by ensuring fairness in transactions on the market it creates and providing a market on which investors can trade with security.

Independence of TFX’s Self-Regulatory Operations

TFX ensures the independence of its self-regulatory operations so that no conflicts of interest will arise between its profit-making activity and self-regulatory function as a stock company.
Specifically, TFX establishes the Self-regulatory Committee, which is independent from TFX’s business execution organizations, in accordance with the FIEA, to decide matters concerning self-regulatory operations. Also, while the Self-regulatory Committee appoints three Self-regulatory Committee members from TFX’s directors by resolution of its board of directors, the majority (two members) of the Self-regulatory Committee members are outside directors, and an outside director is appointed as the chairperson of the Committee.

TFX’s Self-Regulatory Operations

Major self-regulatory operations conducted by TFX are as follows.

  1. Examining Trading Membership
  2. Inspecting Trading Members
  3. Examining trades
  4. Recommendations, regulatory measures, or disciplinary measures on Trading Members