Latest news with #JSDA
Japan Times
31-07-2025
- Business
- Japan Times
Japan considers tighter oversight to avoid bond market ‘spoofing'
The financial industry is looking to tighten oversight of trading in government bond futures, after Nomura Holdings joined a list of brokerages fined for manipulating the instruments. The Japan Securities Dealers Association and Japan Exchange Group are discussing ways to prevent a banned trade known as spoofing, their officials said, asking not to be identified because the matter is private. They are considering revising a guideline for reviewing trading in Japanese government bond futures and other derivatives, as well as offering more thorough training for financial firms, the officials added. Japan is stepping up efforts to stamp out impropriety in its financial markets after concluding last year that Nomura broke the law in 2021. Spoofing involves placing fake orders to give market participants a false impression about supply and demand to make profitable trades. The practice isn't unique to Japan, and regulators in other markets have also been trying to curb it. JSDA is an industry group that self-regulates brokerages in coordination with the Financial Services Agency. Japanese government bond futures are listed on a derivatives exchange in Osaka, and JPX has a regulatory arm called Japan Exchange Regulation that seeks to ensure securities transactions are fair. Traders could also benefit from clearer guidance. The line between spoofing and regular transactions can be contentious — a former Nomura trader who is accused of having committed the act four years ago has insisted he is innocent. Some Japanese government bond traders have noted the rules were opaque enough that almost anyone could be tripped up and lose their job. The guideline was created in 2020 by JPX for companies to review their own derivatives trades, after the FSA penalized Citigroup Inc. and Mitsubishi UFJ Financial Group in the preceding two years for spoofing JGB futures, the officials said. Any revision would be the first since it was formed, they added. JPX shares the guideline only with member firms, keeping it from the general public. JSDA and JPX are examining whether the guideline needs revising for more effective screening of transactions, the officials said. They are also considering educating brokerages about best practices, rather than prescribing quantifiable benchmarks, such as a limit on a trader's market share, the officials added. The discussion are at an early stage and there is no specific deadline, according to the officials. Once ideas are finalized, they will probably discuss them with brokerages, they said. JSDA is considering with other relevant parties how to deal with the matter, a spokesman said in a written response. A representative for JPX declined to comment. The Securities and Exchange Surveillance Commission, the FSA's investigative arm, asked JSDA to come up with preventive measures after Nomura paid a fine of ¥21.8 million ($147,000) in October, commission officials said, asking not to be identified due to their policy. JSDA undertook a survey in February and March as a preparatory step, the officials said. It polled roughly 80 member firms that trade Japanese government bond futures, including brokerages and commercial banks. The queries focused on how the companies' management and compliance officers as well as independent auditors oversee such transactions, JSDA officials said. JPX is also looking into the need to toughen oversight on other financial products that are susceptible to spoofing, such as stocks, its officials said.
Japan Times
12-06-2025
- Business
- Japan Times
New securities system enables those with dementia to invest with family's help
The Japan Securities Dealers Association has introduced a new framework for "family support securities accounts" that allows individuals experiencing cognitive decline from dementia or other conditions to continue investing with assistance from family members. Under the system, investors can designate trusted family members as their agents while they are still mentally capable. These designated agents can carry out securities transactions on the investors' behalf, in accordance with preestablished instructions, even after the onset of illness. The JSDA aims to promote the system as a proactive option for investors seeking to plan ahead for potential future health challenges. Typically, when investors lose their decision-making capacity due to dementia or other illnesses, their securities accounts are frozen. The new system is a response to growing demand from investors who wish to continue managing their assets despite such conditions. It also reflects the JSDA's broader aim to address key issues, such as inheritance planning and extending the longevity of retirement funds. "We have developed a solid framework for wider adoption," JSDA Chairman Toshio Morita said. "We will work with member securities companies to ensure that the system is well understood and accepted by as many investors as possible." Before a family support securities account can be opened, the original account holder, their designated agent and the hosting securities company must agree on an investment and management policy while the investor is still in good health. This process is followed by the conclusion of a notarized contract between the investor and the agent. Under the system, investors can manage their own investments as usual until they are diagnosed with dementia or other conditions that impair judgment. After the onset of such conditions, designated family members can act as agents, enabling them to sell assets or purchase stocks and investment trusts on behalf of the investors, excluding high-risk financial products. The current available options for managing assets when investors experience cognitive decline include family trusts under the trust law and statutory guardianship under the Civil Code. Family trusts allow for the management of a broad range of assets, but once a trust contract comes into effect, even healthy investors are no longer allowed to manage investments on their own. Statutory guardianship is intended for use after the onset of symptoms and involves complex procedures, such as filing a petition with the court. Yumiko Nagasawa, a senior official at Foster Forum, an organization that provides recommendations on financial products, praised the family support securities account system. "Given the growing need for asset management that assumes longer lifespans, the family support securities account is a more user-oriented system," she said. Imamura Securities, based in Kanazawa, Ishikawa Prefecture, plans to begin offering family support securities account services under the JSDA's framework as early as July. As many of its customers have family members living nearby, the company believes it will not be difficult for them to meet the service's key requirement of designating a trusted family member as an agent. Hisano Ohara, head of the brokerage house's internal controls department, said, "While robust safeguards must be in place to prevent the misuse of customer accounts, proper oversight will enable the effective use of customer assets." Securities companies in Japan are exploring various measures to address the aging of their customer base. In July last year, SMBC Nikko Securities established a cross-departmental "working group on supporting elderly customers and upgrading related services" to identify challenges faced at the operational level. The company has already introduced a family trust system and a "contingency agent system," which allows customers to appoint relatives in advance to act as agents for transactions. It now plans to expand its service lineup further. Specifically, SMBC Nikko plans to create a dedicated webpage offering comprehensive information about its services for older customers and their families. The company is also considering implementing a training program for sales staff focused on dementia awareness. Natsuki Kato, head of the customer-oriented business planning office, said, "We aim to provide not only investment advice, but also support tailored to our customers' individual circumstances."
Japan Times
09-06-2025
- Business
- Japan Times
JSDA said to probe brokerages on unsuitable Japanese bond sales
A Japanese securities industry group is probing brokerages on inappropriate bond selling practices amid surging investor demand for higher-yielding corporate debt. The Japan Securities Dealers Association (JSDA), which helps oversee the sector, sent questionnaires to nine major local and foreign brokerages asking about bond selling irregularities, such as overstating to issuers how much demand there is for their debt, according to people familiar with the matter. The probe marks a step toward ridding Japan's primary bond market of opaque sales practices as rising interest rates in the nation boost investor appetite for debt with higher yields and companies rush to sell notes before borrowing costs climb further. Foreign participation in Japan's corporate and municipal bond markets is also growing, putting pressure on domestic brokerages to conduct sales in a way that follows global norms. "It's crucial for the market to function effectively as a price discovery mechanism,' said Yuuki Fukumoto, senior financial researcher at NLI Research Institute. "If it doesn't, investors will eventually pull out, and the market will face serious consequences.' Fukumoto also said that "issuers are struggling to keep up with rising interest rates,' and lead underwriters are caught "in a dilemma' between being pressured to keep issuance costs low and facing investors demanding higher yields. Steps to increase market transparency have been tried in the past. In a market where overstating demand is considered an open secret, the JSDA in 2021 required lead managers who are appointed by issuers to disclose investor demand data for corporate and municipal bonds. But some bonds aren't covered by the rule, including certain retail bonds and regional debt that are underwritten without a lead manager. The JSDA held a working group meeting in late March to discuss false reporting in such deals and began preparing a broader investigation, according to a document. The questionnaire asked securities firms whether they contacted investors about future bond offerings before official filings were submitted, or witnessed such activity, said the people, who asked not to be identified because they were discussing private matters. Responses were due by the end of May. A JSDA representative declined to comment. The association is especially interested in the scope of inappropriate practices in corporate note sales targeting individual investors, who tend to be less financially literate than institutions, the people said. Those kinds of questionable transactions were tolerated in past decades, when Japan's credit market was quiet, dominated by domestic professional investors with limited trading volume. But now with retail investors and overseas traders becoming more active in the market, increased disclosure looks necessary.
Yahoo
02-04-2025
- Business
- Yahoo
Jones Soda Co (JSDA) Q4 2024 Earnings Call Highlights: Revenue Growth Amidst Rising Expenses
Net Revenue: Increased 15% to $19.1 million in 2024 from $16.7 million in 2023. Beverage Segment Revenue: $17.8 million in 2024, a 15.6% growth from $15.4 million in 2023. Hemp-Derived HD9 Products Revenue: Generated $1.7 million in 2024, compared to nil in 2023. Cannabis THC Segment Revenue: $1.3 million in 2024, up from $1.2 million in 2023. Gross Profit Margin: 21.3% in 2024, down from 29.1% in 2023, due to a $1.2 million inventory impairment charge. Total Operating Expenses: Increased to $14 million in 2024 from $9.7 million in 2023. Selling and Marketing Expenses: $6.8 million in 2024, up from $3.7 million in 2023. General and Administrative Expenses: Increased to $5.9 million in 2024 from $5.3 million in 2023. Net Loss: Increased to $9.9 million or $0.09 per share in 2024, from $4.9 million or $0.05 per share in 2023. Adjusted EBITDA: Negative $8.7 million in 2024, compared to negative $4.6 million in 2023. Cash Position: $1.5 million at the end of 2024. Revolving Credit Facility: Entered into a new $5 million facility post-2024. Warning! GuruFocus has detected 5 Warning Signs with JSDA. Release Date: April 01, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Jones Soda Co (JSDA) reported a 15% increase in net revenue for 2024, reaching $19.1 million compared to $16.7 million in the prior year. The company saw strong growth in its hemp-derived HD9 products, generating $1.7 million in net revenues during 2024. Jones Soda Co (JSDA) expanded its distribution network to 81 partners, enhancing its presence in key national and regional retailers across 37 states. The company launched innovative products like zero colas and limited edition collaborations, such as the exclusive agreement with Crayola. Jones Soda Co (JSDA) is optimistic about the future of the functional soda segment, with new products like Popp Jones and Fiesta Jones gaining traction. Gross profit as a percentage of revenue decreased to 21.3% from 29.1% in the prior period, primarily due to a $1.2 million one-time inventory impairment charge. Total operating expenses increased significantly to $14 million in 2024 from $9.7 million in 2023, driven by higher selling and marketing expenses. The company reported a net loss of $9.9 million for 2024, up from a net loss of $4.9 million in 2023. Jones Soda Co (JSDA) faced operational challenges and poor financial discipline in the latter half of the year, impacting growth. The company experienced a decrease in adjusted EBITDA, which was negative $8.7 million compared to negative $4.6 million in the previous year. Q: With broader concerns about a slowdown in the economy, do you think you'll be able to accomplish your growth objectives if consumer spending continues to slow down or things get worse? A: Scott Harvey, CEO: We understand the concerns around the broader economy, but we have not seen a material slowdown in our operating categories. We are confident in our growth opportunities and are actively working to improve our cost bases and supply chain to enhance our margin profile and manage our P&L effectively. Q: How does Jones intend to navigate the shifting landscape of the HD9 playing field with many state attorney generals and congressional bodies taking steps to address this growing category? A: Scott Harvey, CEO: We are closely monitoring the evolving regulatory landscape of the HD9 category. We are committed to ensuring compliance with all regulations and are proactively engaging with regulatory bodies to understand potential impacts on our business, allowing us to adapt our strategy as needed. Q: What is the status of the Mary Jones launch in Michigan that was announced months ago? Are there any plans to expand into new states? A: Scott Harvey, CEO: Mary Jones launched in Michigan during Q4 2024, and our sodas launched on March 12, 2025. The launch broke our distributor's record for all KPIs except average order value. We are evaluating several other states and plan to launch in additional high-value states in 2025. Q: Where do you see the company in 5 years, and why should investors believe in this management team over the previous ones? A: Scott Harvey, CEO: In 5 years, we envision Jones evolving into a full-fledged beverage company, expanding beyond core offerings to capture new markets. Our management team is committed to financial discipline and operational excellence, ensuring smarter investments, improved margins, and long-term profitability. Q: Are you comfortable with your current liquidity position? A: Brian Meadows, CFO: We secured a new $5 million credit facility in February 2025 to support our growth initiatives. This facility allows us to borrow off a larger base of assets, providing flexibility to capitalize on growth opportunities. We will seek the best capital sources if further expansion is needed. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
