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Screenshot of a breaking news alert e-mail from Q2 2017
Granted formal approval for the investment advisory business registration by the JFSA
Copy trading platform provider Tradency has been recognized as a Japanese Financial Services Agency (JFSA) investment advisory business, according to a press release issued today. The JSFA is formally treating and categorizing this type of signal copying under the umbrella of an investment advisory business as of this week in Japan.
This last milestone, defines mirror trader as a mass market product which has been recognized by brokers, clients and the JFSA as an approved financial tool in Japan. This may help quell some hesitations among Japanese traders to take advantage of this type of copy trading in their accounts. Further, it is likely to lead to increased adoption in the Japanese market amongst retail clientele, which would no doubt help Trandency’s bottom line if demand were to pick up.
Tradency, alongside its Japanese broker partners had joined forces in order to lead the advisory application process. Trednacy’s CEO, Lior Nabat expands on that subject: “Tradency welcomes the involvement of global regulators. We see the new regulation as a joint interest for the regulators, Tradency, brokers and traders. We believe strong regulation will transform the FX market into a viable financial investment tool. We also see it as an obvious evolutionary step in our evolvement into a mass market service.”
In Japan, copy and social trading is fairly new, despite Japan being one of the largest retail forex markets and being home to the largest brokers by volume (note Japan broker GMO Click’s record $1 trillion volume month last June). Compare this mirror trading market with China, arguably the fastest growing retail forex market, where copy trading is certainly more popular. Despite being new and slower to go mainstream in Japan, current Mirror Trader numbers are decent, we reported back in April of 2013, retail broker Invast Securities of Japan soars to 40,000 live clients on Tradency’s Mirror Trader. If anything, the newly minted status of the platform as a legitimate investment advisory business under the JSFA could help lead to further market penetration.
The formal recognition of the Mirror Trading platform under the JSFA is a good thing for all involved. The increased regulation across all aspects of FX, especially the trend of signals and copy trading further increases investor confidence to participate in the largest market in the world. It will be interesting to see if any other copy trading platform service providers will look to take the same route as Tradency in Japan and acquire recognition under the JSFA. We reported back in August that ASIC in Australia and the FCA in the UK — are in the advanced planning stages of regulating the practice of copy trading / auto trading / mirror trading within their respective jurisdictions. We will be sure to keep up with the trends and developments of copy and signal trading regulation.