Nasdaq Japan and the Osaka Securities Exchange have appointed Citibank as the securities clearing agent for international stocks traded on the Nasdaq Japan Market, a section of the Osaka Securities Exchange (OSE).
Citibank won the deal over Japan Securities Clearing Corporation (JSCC), which already handles clearing of foreign stocks on the OSE. JSCC is a wholly-owned subsidiary of Tokyo Stock Exchange, where it also plays a central clearing role.
The Nasdaq Japan Market’s International Section is scheduled to open in April, followed by trading planned for June. The Nasdaq Japan Market has been trading domestic stocks since June 2000 and the International Section is part of Nasdaq’s global expansion plan that will link Nasdaq US, Nasdaq Japan and Nasdaq Europe with 24-hour cross-border trading.
“Citibank was an obvious choice as the major global leader of custody in Japan,” says one securities industry professional in Tokyo. “But from a Japanese perspective, JSCC was also in with a chance as the only entity here that has global custody exposure.”
All international stocks will be cleared through Citibank Worldwide Securities Services (WWSS), a division of Citigroup’s Global Corporate and Investment Bank. However, cash obligations will continue to be cleared through OSE’s existing cash clearing agents.
According to a spokesperson from Nasdaq Japan, Citibank was chosen because of its competitive fee schedule, technology and highly automated operating procedures that will benefit all market participants.
“In appointing Citibank, a company with global and state-of-the-art clearing services, we are taking a major step forward to improving the efficiency and stability of international stock settlement," says Goro Tatsumi, president and CEO of the Osaka Securities Exchange.
