The Jasdaq Securities Exchange for venture firms, run by the Japan Securities Dealers Association, was ordered Tuesday to improve its internal controls, the Financial Services Agency said.
The bourse's risk management for computer failures is insufficient, the regulator said in a statement. The Jasdaq must prepare a plan to improve its controls and report how measures are being implemented every three months starting July 31, the FSA said.
The Jasdaq suspended morning trading in August 2005 due to computer problems.
Tokyo Stock Exchange Inc., the world's second-biggest equities market, was forced to shut down in 2005 and 2006 after spikes in trading overloaded its systems. It also faces a lawsuit from Mizuho Financial Group Inc. for failing to stop a botched order.
The TSE, which could have an initial public offering as early as 2009, has been urged by regulators to improve its compliance and trading systems before exploring tieups in New York, London and Asia. It is investing 30 billion yen to upgrade its technology by the end of 2009.
The government is also trying to reform the financial markets to take better advantage of individual assets and remain a global financial center under a policy framework Prime Minister Shinzo Abe approved last week.
The nation must set up an exchange that consolidates trading of stocks, bonds, commodities and other securities to attract more financial services, the policy states. Abe is also urging promotion of household investment in securities.
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