Both foreign brokers and Japanese brokers are required to implement third-party custody of funds, that is, to keep customers' funds in isolation. The client's funds must be entrusted to the trust bank, and the brokerage firm must entrust the trust manager to monitor the trust status. In case the client's broker goes bankrupt, the client's funds will be safely deposited in the trust bank. After that, the funds will be directly returned to investors by the trust bank through the trust manager.

This system requires very strict funds for brokers, because after all investors' funds are put into trust banks, brokers must prepare enough funds for clearing transactions in order to avoid market risks.

2. Lever restriction

At present, the leverage ratio of foreign exchange margin trading in Japan is 25 times (before 20 1 1, the leverage ratio was lower than 50 times), and other similar promotion forms are not allowed.

The foreign exchange margin of Tokyo Financial Exchange does not have a fixed leverage ratio, but has a fixed guarantee amount. Therefore, in Japan, it is difficult for foreign exchange brokers to obtain foreign exchange business licenses, which is very unfavorable to brokers in some aspects.

3. Financial requirements

In Japan, institutions applying for financial futures trading business must be joint-stock companies or financial institutions, and their own capital should be above 50 million yen.

The revision of the Financial Futures Trading Law in 2004 put forward capital requirements for financial institutions, stipulating that all financial futures institutions except banks must report capital adequacy ratio, which cannot be lower than 120%.

In the floor market, Japan's qualification requirements for member institutions engaged in foreign exchange margin trading on exchanges are: capital of more than 300 million yen, net assets of more than 2 billion yen, and capital adequacy ratio of more than 200%, which is far higher than the qualification requirements for institutions engaged in general financial transactions.

In addition, the Japan Financial Agency also stipulates that foreign exchange brokers engaged in OTC derivatives trading must hold a deposit of more than 4% of the principal, otherwise they cannot conduct foreign exchange margin business.

The above is an introduction to Japan's foreign exchange market supervision policy, hoping to help everyone. At the beginning of 20 15, the black swan event broke out in the Swiss franc, which caused huge losses to investors and brokers. In view of this, Japanese regulatory authorities also intend to modify the proportion limit of foreign exchange transactions, and Japanese institutional foreign exchange traders may also be limited by the leverage ratio of 1:25.