Japanese exchange targets securities lending market transparency
25 October 2019 Tokyo
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The Tokyo Stock Exchange is seeking to improve transparency in the country’s securities lending market through the distribution of short selling transaction data.
Japanese securities lending and short selling market participants have been asked by the exchange to participate in a proof of concept (PoC) for limited public distribution of historical margin transaction and short selling data so that they can identify use cases for the datasets.
The PoC will provide samples of TSE internal margin and short selling transaction data from 2014 to 2018.
A spokesperson for TSE explained that the PoC’s objective is to verify the feasibility of leveraging the data among investors and brokers with the help of feedback from PoC participants.
The exchange ultimately aims to develop a service to distribute short selling transaction data, based on the results of the PoC that is currently slated to go live in April next year.
TSE’s spokesperson explained: “As many investors see data analysis as a new trading opportunity, TSE is also discussing whether our internal data, which is not provided right now, could fill their needs.”
The spokesperson went on to note that by using this data, a market participant could understand almost 100 percent of short selling transaction in the Japanese market.
“Therefore, we hope this could be useful in not only trading analysis but also lending. For example, forecast stock lending needs, and decide the rate of lending,” the spokesperson added.
PoC testing participants must be trading participants of TSE or Osaka Exchange, clearing participants of Japan Securities Clearing Corporation or any other corporation deemed appropriate by TSE.
Japanese securities lending and short selling market participants have been asked by the exchange to participate in a proof of concept (PoC) for limited public distribution of historical margin transaction and short selling data so that they can identify use cases for the datasets.
The PoC will provide samples of TSE internal margin and short selling transaction data from 2014 to 2018.
A spokesperson for TSE explained that the PoC’s objective is to verify the feasibility of leveraging the data among investors and brokers with the help of feedback from PoC participants.
The exchange ultimately aims to develop a service to distribute short selling transaction data, based on the results of the PoC that is currently slated to go live in April next year.
TSE’s spokesperson explained: “As many investors see data analysis as a new trading opportunity, TSE is also discussing whether our internal data, which is not provided right now, could fill their needs.”
The spokesperson went on to note that by using this data, a market participant could understand almost 100 percent of short selling transaction in the Japanese market.
“Therefore, we hope this could be useful in not only trading analysis but also lending. For example, forecast stock lending needs, and decide the rate of lending,” the spokesperson added.
PoC testing participants must be trading participants of TSE or Osaka Exchange, clearing participants of Japan Securities Clearing Corporation or any other corporation deemed appropriate by TSE.
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