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TSE Now Accepting Applications for ETF Market Makers

Traders Magazine Online News, April 10, 2018

John D'Antona Jr.

Tokyo Stock Exchange, Inc. (TSE) plans to introduce an ETF market making incentive scheme in July 2018 to improve liquidity in the ETF market and, as of today, has started accepting applications for ETF Market Makers. The first applicant was Nomura Securities Co., Ltd., which has now been designated as ETF Market Maker. 

Through this incentive scheme, ETF Market Makers will continue providing a certain amount of bid and ask quotes within a predetermined spread, whereby investors will be able to consistently trade ETFs at a lower trading cost.
Details of the scheme (*1) and the designation status of Market Makers (*2) will be published on the JPX website, where the information will be updated every time an application is received.

TSE will continue recruiting ETF Market Makers and remains committed to enhancing the convenience of our market for investors.

With the background of growing importance of the people's stable asset forming, TSE will introduce ETF Market Making Incentive Scheme from July 2, 2018, in order to improve the liquidity of ETFs, which are one of the products that contribute to small-amount diversified investment.

TSE designates market makers for each issue based on the application and will provide incentives to designated market maker who fulfilled the obligation. With continuous quote by market maker, a sufficient amount of orders are shown at the fair price, so that investors can buy or sell ETFs at a desired timing. 

Moreover, this scheme involves having asset managements as sponsors for additional incentives as a reward to bespoke obligation (Sponsored ETF Market Making Scheme). It is expected that more quote will be shown by market makers with this arrangement.



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