Preventing Unfair Trading
In order to prevent unfair trading, first and foremost, a thorough understanding of laws and regulations related to unfair trading is essential. To raise awareness and deepen understanding among investors, listed companies and trading participants (broker-dealers qualified to access directly the trading platform of Tokyo Stock Exchange or Osaka Exchange), Japan Exchange Regulation (JPX-R) provides guides among a variety of educational material on its website, holds informational sessions and publishes case studies and reports for market users.
Main Types of Unfair Trading
To All Trading Participants:
In order to maintain a fair and orderly market, trading participants must be well-versed in the appropriate laws and regulations. In the case that a possible violation is discovered, a company's ability to contain any potential damage arising from this violation is indispensable.
To strengthen companies' know-how, JPX-R conducts several activities as a part of its efforts to prevent market manipulation, insider trading and other forms of unfair trading. JPX-R informs companies of similar cases or precedents from past investigations and holds meetings for persons in charge of market surveillance at trading participants. Also, in addition to actively conducting informational meetings for companies on request, JPX-R also carries out briefings on relevant laws and introduces examples from investigations.
JPX-R requests trading participants to recognize that, as gatekeepers for the exchange, you play a significant role, and should make every effort to use the market in an efficient and appropriate manner to avoid undermining our collective efforts to build trust and confidence in the market.
Through close cooperation, trading participants and JPX-R can prevent risks related to unfair trading before they occur and respond swiftly to any violations. JPX-R is always prepared to work with trading participants. Please feel free to contact us if you have any queries.
To All Listed Companies:
JPX-R has outlined three important steps that all listed companies must take in order to prevent insider trading.
First, when dealing with company information which may influence investment decisions, listed companies must take an active approach to ensure timely and appropriate disclosure.
Second, to prevent improper use or leakage of inside information, listed companies must establish appropriate internal systems to manage information.
Third, it is important for listed companies to educate executives and employees as to the purpose and contents of insider trading regulations. A thorough and accurate understanding of the regulations is essential.
Since acts of insider trading committed by employees or executives can negatively impact investors' faith in a company's stock and severely damage its image, it is of the utmost importance that listed companies recognize the significance of this problem and strive to implement thorough and effective compliance programs.
JPX-R is always ready to provide consultation on individual trading and offer assistance on establishing and managing internal rules related to the buying and selling of own company shares.