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Online brokerage kabu.com Securities Co. said Wednesday it plans to start an after-hours trading system in August that will take orders from kabu.com account holders.

The system, based in Fukuoka, will establish stock prices in an auction manner by matching buy and sell orders — the same mechanism used at the Tokyo Stock Exchange.

The new system will allow investors to trade in some 300 major domestic stocks between 7:30 and 11 p.m., the Mitsubishi UFJ Financial Group Inc. affiliate said.

There are also plans to increase the number of stocks.

The Financial Services Agency authorized the new exchange plan Tuesday, the company said, adding that it is the first after-hours exchange system based on an auction system in Japan.

Japan lifted restrictions that had limited stock trading to securities exchanges in 1998. A revision to the Securities and Exchange Law in April 2005 allowed for the creation of a proprietary market based on an auction system.

Some online brokerages, including Monex Inc., have been providing night trading services based on the closing prices set at the exchanges. This led to little fluctuation in stock prices.

But the auction system planned by kabu.com will allow for more fluctuation, the company said.

The brokerage said it will invest several billion yen in the new system, which will be designed to process up to 600,000 orders daily.

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