MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.6 percent, bouncing from a 6-week low struck the previous day on risk aversion triggered by the assault on the French capital. South Korea's Kospi was up 1.3 percent, Australian shares gained 1.4 percent and Shanghai shares climbed 1.7 percent. Japan's Nikkei added 1.6 percent. (Reuters file picture shows employees of the Tokyo Stock Exchange (TSE) working at the bourse in Tokyo .)
TOKYO: Japan plans to tighten regulations on high-frequency trading (HFT), whose growing presence in the Tokyo Stock Exchange has raised concerns such trades could destabilise the market and put retail investors at a disadvantage.
Regulators in Europe and elsewhere are also placing high-frequency traders, who use ultra-fast computers to automatically place trades, under closer scrutiny as they have been blamed for accentuating market volatility.
Japan's market regulator, the Financial Services Agency, made public on Wednesday its plan to require high-frequency traders to register and to ensure proper risk management measures are in place.
HFT accounted for about 70% of orders placed at the Tokyo Stock Exchange in 2016, FSA said.
"It is not appropriate to eliminate all algorithmic fast trading from the Japanese market as it includes the kind that contributes to smooth market transactions," FSA said in materials handed out at its working group discussing the issue.
The agency said, however, it needs to have a tighter grip on HFT given concerns raised by market participants that these high-speed automatic trades could destabilise market.
Others were worried that retail investors without access to such services might feel disadvantaged and thus stop participating, FSA said.
Regulators in other countries have highlighted similar concerns. HFT will be directly regulated by the European Securities and Markets Authority.
India's capital market regulator in August said it was looking at various potential limits on so-called algo traders, including imposing "random speed bumps," which would randomly delay execution of some orders. - Reuters
Subscribe or renew your subscriptions to win prizes worth up to RM68,000!
