Self-Regulatory Operations: Examining Trading Membership

Examining Trading Membership

1．Acquisition of Trading Membership

To enable investors to trade on the exchange market with a sense of safety, persons who can receive orders from investors and directly trade on the exchange are limited to Trading Members.
A Trading Member must be a registered financial institution or a financial instruments firm registered by the Prime Minister, or an exchange licensed firm approved to conduct market derivative transactions on the Exchange’s market by the Prime Minister, and must have a high credit standing that meets the specified financial condition and other conditions, as well as an internal control framework for observing the FIEA and other laws and regulations to protect investors and TFX regulations.
The Self-regulatory Committee examines applications for trading membership and decides whether or not to grant trading membership.
For the details of acquisition of trading membership, please see How to Become a Trading Member

2．Financial Condition Monitoring

After granting trading membership, TFX regularly monitors the financial condition,etc. of Trading Members to confirm whether they maintain their qualifications to meet the requirements stipulated by TFX.
TFX gives warnings and recommendations to any Trading Member whose financial condition has deteriorated so as to encourage improvements. In the event that a Trading Member breaches the requirements for maintaining its membership, TFX will take the necessary disciplinary measures upon conducting a hearing with the Trading Member (*).
Since TFX monitors the financial condition of Trading Members to check for soundness, investors are able to trade products listed on TFX with security.
*A hearing means having a Trading Member state its opinions, either verbally or in writing, on facts and other details that have caused the case being examined.