Japan Exchange Group (JPX): Overview & Financial Markets

Japan Exchange Group is a Tokyo-based financial services corporation that operates different financial instruments exchange markets. It facilitates the trading of Japan’s financial securitiesMarketable SecuritiesMarketable securities are unrestricted short-term financial instruments that are issued either for equity securities or for debt securities of a publicly listed company. The issuing company creates these instruments for the express purpose of raising funds to further finance business activities and expansion. under the country’s Financial Instruments and Exchange Act. It was established in 2013 following the merger between Tokyo Stock Exchange Group and Osaka Securities Exchange.

The Japan Exchange Group is the largest stock exchange in Asia. It is also the world’s third largest stock exchange after NYSE Euronext and NASDAQ OMX Group. Joining the ranks of elite exchanges globally, it boasts a market capitalizationMarket CapitalizationMarket Capitalization (Market Cap) is the most recent market value of a company’s outstanding shares. Market Cap is equal to the current share price multiplied by the number of shares outstanding. The investing community often uses the market capitalization value to rank companies of US$4.48 trillion.

Business Model of the Japan Exchange Group

The Japan Exchange Group provides secure and fair market infrastructure and data, and clearing and settlement services, and conducts trading oversightThe 1933 Securities ActThe 1933 Securities Act was the first major federal securities law passed following the stock market crash of 1929. The law is also referred to as the Truth in Securities Act, the Federal Securities Act, or the 1933 Act. It was enacted on May 27, 1933 during the Great Depression. ...the law was aimed at correcting some of the wrongdoings. The corporation aims to provide convenience for all market users and ensure that the markets are reliable. In return, it receives fees from market users such as issuers, information vendors, and securities firms. Specifically, its main profit sources are from trading, listing, and clearing services.

Subsidiaries of the Japan Exchange Group

Tokyo Stock Exchange (TSE), Osaka Exchange (OSE), and Japan Exchange Regulation (JPX-R) are the three major subsidiaries of the Japan Exchange Group. Both the Tokyo Stock Exchange and the Osaka Exchange provide market access to traders and investors. The Japan Exchange Regulation operates as a self-regulatory body.

1. Tokyo Stock Exchange (TSE)

The Tokyo Stock Exchange serves as the central equities marketplace of Japan, providing a large portion of the total liquidity of the Japan Exchange Group. With more than 3,500 companies listed on the Tokyo Stock Exchange, almost 750 million trades are conducted every year.

It is composed of four separate entities:

• 1^st Section Market – where large-cap companies are listed
• 2^nd Section
• Mothers (Market of High Growth and Emerging Stocks)
• JASDAQ (Japan Securities Dealers Association)

2. Osaka Exchange (OSE)

The Osaka Exchange is an exclusively digital marketplace, enabling market users to take part in the derivatives markets of Japan online. Volatility indexes, foreign and local equities indexes, as well as interest rate products, are some of the derivatives available on the OSE. The most commonly traded products on the Osaka Exchange are the Tokyo Stock Price Index, Nikkei 225 mini, and Nikkei 225Nikkei IndexThe Nikkei Index, or Nikkei 225, is the most recognized Japanese stock market index. It comprises Japan's top 225 companies listed on the Tokyo Exchange..

3. Japan Exchange Regulation (JPX-R)

As an independent, self-regulating body, the Japan Exchange Regulation aims to uphold the integrity of the marketplace. It is in charge of overseeing trading operations on OSE and TSE.

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