The Proprietary Trading System (PTS) refers to an original trading market system created by a securities firm. PTS allows investors to trade stocks and bonds through electronic trading systems without stock exchanges. The Financial System Reformation Law made it possible for securities firms to start PTS in Japan. The first nighttime PTS was "Monex Nighter" launched by Monex Securities, and the second was "kabu.com PTS" launched by kabu.com Securities.

However, these PTSs were exclusive markets that only allowed investors with accounts at each securities firm to participate in trading. Also, the TSE and other major stock exchanges account for the greater share of the current stock trading, which does not contribute to investors' convenience.

Under these circumstances, Japannext PTS was established in Aug. 2007 as a highly public proprietary trading system operated by several securities companies. SBI Japannext has introduced the state-of-art stock exchange system with high functionality and extensibility. The system is actually utilized by 15 stock exchanges worldwide including Euronext, providing the basis for a stable operating system.

Japannext PTS

There are two roles that Japannext PTS hopes to play in the Japanese equity market. The first is to provide investors with the opportunity to trade stocks after the market closes, when information relating to particular stocks may become available. Also, Japannext PTS provides investors with the opportunity to observe the U.S. and European stock market activity, and therefore to trade according to their contemplation of the next day's trading. The second role is that of an “alternative channel of liquidity”, where investors may seek the best order execution during the daytime trading session that overlaps the stock exchange trading session. We firmly believe that playing these roles will lead to a significant increase in investors' opportunities.

Japannext PTS operated by SBI Japannext
Japannext PTS will endeavor to become a market that is highly accessible to investors with high level of liquidity, connected by several participating securities companies. It operates both a daytime and nighttime trading session, allowing users to trade approximately 4,000 issues, which account for the majority of the stocks and financial products listed on the six Japanese stock exchanges.

An extensive effort will be made for a high level of participation in dealing and investments in SBI Japannext, with a view toward dealing participation for securities firms, regardless of whether their business is Internet based or not.