The Tokyo Stock Exchange (TSE) and the Osaka Securities Exchange (OSE) finally integrated their listing business on 16 July, becoming the third largest exchange globally. The move follows the merger of the two stock market firms six months ago which will allow the new Japan Exchange Group to compete globally and attract more foreign investors.
Spokespeople from Japan Exchange Group and Nomura which entered TSE's exchange-traded notes platform in January, told SRP that the merger will not have a direct impact on the structured products market.
The horizontal integration has resulted in products previously listed on OSE being transferred to the TSE platform. Traditionally, TSE has been strong on spot trading stocks while OSE has been the leading exchange for the derivatives market in Japan.
Currently, both exchange-traded notes (ETNs) and exchange-traded funds (ETFs) are listed on the TSE. SRP data shows that there are 15 ETF-linked products (with a leverage or inverse structure) linked to the Nikkei 225 and Topix indices worth $1.2bn, of which three products were issued by Mizuho Securities and the rest by Nomura.
The majority of these products featured simple protected tracker and reverse convertible payoff types with potential knockout barriers.