With the run-up to the Tokyo Stock Exchange's January implementation of its Arrowhead trading system, the race is on among alternative trading venues in Japan to build faster systems and improve connectivity to onshore and offshore sources of liquidity.
To that end, Kabu.com Securities, one of a handful of 'proprietary trading systems', or PTS, as the Japanese regulators term alternative crossing networks, has partnered with UK vendor Fidessa's connectivity network.
Kabu.com is a subsidiary of Mitsubishi UFJ Financial Group and offers an online platform that facilitates Japanese equity trading for institutional and retail clients. Unlike other PTS in Japan, Kabu.com provides an auction trading system similar to a stock exchange's.
The agreement allows users of Kabu.com to connect directly to the cash equities trading venue via the Fix messaging protocol through Fidessa's trading platform or connectivity network, without the need to establish a new connection. Fidessa has 2,300 buy-side firms and 400 brokers across 120 markets globally on its platform.
Yoichi Ishikawa, executive officer at Kabu.com, says this is the first time the firm has established such a partnership, and was attracted by the opportunity to get flows from more onshore and offshore institutions.
"By improving the infrastructure of alternative trading venues in the Japanese market, we give more chances for institutional investors to access liquidity," Ishikawa says.