Osaka Exchange

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Osaka Securities Exchange
Osaka logo.jpg
Founded 1949
Headquarters Osaka, Japan
Key People Michio Yoneda, president and CEO
Products Equities, stock index futures and options and equity options
Website http://www.ose.or.jp/e/


The Osaka Securities Exchange (OSE) is an integrated electronic platform that lists cash equities, futures and options, combining Japan's second-largest securities exchange, the Hercules exchange for growth stocks - formerly known as Nasdaq Japan - and the country's largest derivatives platform. The OSE, which demutualized in 2001 and listed on its own board in 2004, worked to implement a new trading system in 2011.

The OSE ranked as the world's 15th largest derivatives exchange by volume in 2010, moving up from the 16th position from the previous year, according to the Futures Industry Association's latest volume rankings for 2010.[1] The FIA report, published in March of 2011, notes that the total amount of futures and options traded by the exchange in 2010 increased by 18.2 percent from 2009, to 196.35 million contracts.

Reports indicated that the OSE in August of 2011 had agreed to allow the Tokyo Stock Exchange to carry out a partial takeover bid and turn the Osaka bourse into a subsidiary by buying some shares from the market.[2]

History

The origin of securities exchanges in Japan stems from the Edo Period, when the Exchange for Rice & Crops was established in Osaka, Japan's economic center. Each prefecture set up its own warehouses in Osaka for storing and shipping their rice to merchants. A number of merchants gradually gathered to create one market, called "Yodoya-Komeichi," the first securities exchange in the nation.

This market was moved to Dojima in 1697, and called "Dojimakomekaisho", meaning a physical market to trade in rice-tickets or physical rice. In 1716, Cho-gomai transactions were introduced, said to be the origin of futures transactions in Japan. They were recognized by the government in 1730.[3]

Product Development


Key Developments

  • On September 24, 2009, the OSE announced that it completed the process of making Jasdaq Securities Exchange Inc. into a wholly-owned subsidiary, which will allow the integration of the Tokyo-based market for start-up companies and the OSE's own Hercules market for new companies.[4]
  • On September 15, 2009, NASDAQ OMX Group announced a deal with OSE to provide it with the NASDAQ OMX-based platform for derivatives trading. The platform is scheduled to launch in 2011.[5] [6]
  • On February 3, 2009, The NASDAQ OMX Group and Osaka Securities Exchange signed a Memorandum of Understanding (MoU) with the intent to form a strategic partnership. The partnership includes NASDAQ OMX's delivery of services to further develop OSE's market model, with the objective of growing volumes in both its cash and derivatives markets.[7]
  • In August 2008, OSE and International Securities Exchange terminated their MOU agreement for a jointly-owned equity options trading platform for the Japanese market. At the time, OSE president and CEO said the canceled deal "will allow us to concentrate on growing out core business and further improving our technology platform."[8]
  • On May 27, 2008, Osaka Securities Exchange signed an MOU with the Central Japan Commodity Exchange and the Kansai Commodities Exchange for co-operation among the three exchanges.[9]

In 2009, OSE announced it was joining with New York-based Nasdaq OMX Group to co-operate on developing new derivatives-trading platforms and on cross-listing start-up corporations.[10] OSE hopes to leverage its planned new 2011 derivatives system to compete with larger rival the Tokyo Stock Exchange and on the wider global market.

In June 2010 OSE announced a partnership with Japanese IT provider KVH for its new OSE derivatives trading system that it expected to launch in 2011.[11] OSE chose the KVH Proximity Hosting Service to provide relaible, ultra-high speed connections for OSE's high-frequency traders via KVH's Tokyo Data Center, which will connect to OSE's derivatives-trading network through a high-speed LAN.[12]

References

  1. 2010 Annual Volume Survey. Futures Industry.com.
  2. Osaka bourse largely agrees to TSE takeover. MarketWatch.
  3. OSE Official Website. Osaka Securities Exchange.
  4. OSE makes Jasdaq into wholly owned arm. Kyoto News.
  5. NASDAQ OMX Selected as Technology Provider to Osaka Securities Exchange. NASDAQ OMX.
  6. Osaka Securities Exchange Contract With OMX Technology And NTT Data. Mondovisione.
  7. NASDAQ OMX and Osaka Securities Exchange Sign Agreement to Form Strategic Partnership. Nasdaq and OSE.
  8. OSE and ISE halt Japanese options platform plan. The Trade News.
  9. MV News. mondovisione.
  10. OSE, Nasdaq OMX Agree to Form Tie-Up in Derivatives Trading. Kyodo News International.
  11. KVH appointed as proximity vendor for OSE new derivatives trading system. Automated Trader.
  12. OSE Appoints KVH as Proximity Vendor for Derivatives Trading System. COMTEX.
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