Introduction

Japan Exchange Regulation (JPX-R) is a corporate body established under Japan Exchange Group, Inc. (JPX) to specialize in self-regulatory operations of financial instruments exchanges in accordance with the Financial Instruments and Exchange Act of Japan.

JPX, the parent company of JPX-R, serves an important role in social infrastructure as a key financial instruments market that provides a platform for asset management and fund raising both in Japan and overseas. The mission of JPX-R is to ensure and improve the fairness, transparency, and reliability of markets through appropriate self-regulatory operations to facilitate the ability of exchanges to function fully.

In order to do so, it is essential to have close cooperation with Tokyo Stock Exchange (TSE) and Osaka Exchange (OSE), which are the market operators. However, there are concerns regarding conflicts of interest between the for-profit and self-regulatory operations of exchanges, given that they are *kabushiki gaisha* (joint-stock companies); therefore, JPX-R is legally required to be highly independent from both exchanges and conducts its operations independently of the exchanges' other operations.

Since its establishment in 2007, JPX-R has engaged in operations while always keeping in mind its mission and the maintenance of independence as a self-regulatory organization. At the same time, since the market environment is constantly changing, we aim to appropriately respond to environmental changes through close cooperation not only with TSE and OSE, but also government authorities and other related organizations in Japan and overseas, thereby executing better self-regulatory operations that gain and maintain the trust of market users.

Under such circumstances, in FY2023, JPX-R improved its operational system in response to the revisions to the Rules for Securities on Alert and the quarterly disclosure system in order to ensure that its listed company compliance operations are conducted appropriately and consistently. JPX-R also revised the listing examination rules and operations to accommodate a more flexible IPO schedule.

In addition, JPX-R administered the Fifth Nationwide Listed Company Insider Trading Management Survey in collaboration with stock exchanges throughout Japan. JPX-R also engaged in such efforts as holding an in-person seminar for trading participants and offering COMLEC Trade Surveillance Courses as ways of reaching out to them.

We hope that this report will help market stakeholders to further understand JPX-R's self-regulatory operations, and that it will contribute to the establishment of sound exchange markets.