'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

Former Japan Equity PM with over 30 of experience now providing database-driven analysis of the market, sectors, peer groups and stocks for LightStream Research.

Leveraging data and graphic analysis provided by Japan Analytics, and the related Japan Analytics iPad App, we provide insights on companies are often ignored by the sell-side as well as challenging conventional wisdom on the market overall.

'Quantamental' Japan Specialist

🇯🇵 JAPAN • Fujitsu Fails to Failover > JPX Tries to Pass the Buck

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

THE FAILURE TO FAILOVER -  <a href="https://www.smartkarma.com/entities/japan-exchange-group-inc" target="_blank" data-smartkarma-citation="entities:11266:1" rel="noopener">Japan Exchange Group (8697 JP)</a> released the report in its investigation into the October 1st system failure yesterday. However, the report, although couched in neutral language, details basic failures of communication and proper testing protocols by both the TSE and <a href="https://www.smartkarma.com/entities/fujitsu-ltd" target="_blank" data-smartkarma-citation="entities:16968:1" rel="noopener">Fujitsu (6702 JP) </a>the TSE arrowhead trading system vendor. This failure to conduct worst-case scenario planning is nothing new to those familiar with the implementation and management of IT systems in Japan.   <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/166/119/original/2020-10-20_09-54-29.png?1603155299" class="editor-image img-responsive" data-smartkarma-image-id="166119"></figure><div class="content-caption">Source: TSE</div></section>COUNTERMEASURES - The TSE 'countermeasures' include the establishment of a council to establish 'rules and regulations' to deal with failures which will consist of ' securities companies, investors, and system vendors' and will 'take into account evidence from overseas'. <blockquote>
Establishment of a "Council for Recurrence Prevention Measures" in Response to System Failure 
TSE would like to deeply apologize for the inconvenience caused to many investors and other market users due to the failure in the arrowhead cash equity trading system on October 1, 2020.With the aim of considering how it can develop its response to system failures and its rules and regulations to prevent a recurrence of this incident, TSE will establish a "Council for Recurrence Prevention Measures" comprised of market users. 
1. Purpose The recent system failure revealed not only issues with the IT system itself but also  issues with the operation of the system, such as a need for clarification and better transparency of standards and procedures for recovery, and an absence of rules for order handling in the event of system failures. The market users making up the Council will consider how TSE should develop its responses to system failures and its rules and regulations from the perspective of investors, taking into account evidence from overseas.
2. Council Members A variety of market users such as securities companies, investors, and system vendors are expected to become Council members. The Financial Services Agency of Japan and other such organizations are expected to become observers.
3. Others The secretariat of the Council will be Tokyo Stock Exchange, Inc.The first meeting of the Council will be held by the end of October 2020. Agendas, outlines of minutes, and other related materials will be published on the JPX website after meetings.  
</blockquote>FSA COMES KNOCKING - The Nikkei reported this morning that an FSA onsite-inspection of the TSE began yesterday. Such inspections are normally not pre-announced and never fail to find fault and require remedial action.

THE FAILURE TO FAILOVER -  Japan Exchange Group (8697 JP) released the report in its investigation into the October 1st system failure yesterday. However, the report, although couched in neutral language, details basic failures of communication and proper testing protocols by both the TSE and Fujitsu (6702 JP) the TSE arrowhead trading system vendor. This failure to conduct worst-case scenario planning is nothing new to those familiar with the implementation and management of IT systems in Japan.   Source: TSECOUNTERMEASURES - The TSE 'countermeasures' include the establishment of a council to establish 'rules and regulations' to deal with failures which will consist of ' securities companies, investors, and system vendors' and will 'take into account evidence from overseas'. 
Establishment of a "Council for Recurrence Prevention Measures" in Response to System Failure 
TSE would like to deeply apologize for the inconvenience caused to many investors and other market users due to the failure in the arrowhead cash equity trading system on October 1, 2020.With the aim of considering how it can develop its response to system failures and its rules and regulations to prevent a recurrence of this incident, TSE will establish a "Council for Recurrence Prevention Measures" comprised of market users. 
1. Purpose The recent system failure revealed not only issues with the IT system itself but also  issues with the operation of the system, such as a need for clarification and better transparency of standards and procedures for recovery, and an absence of rules for order handling in the event of system failures. The market users making up the Council will consider how TSE should develop its responses to system failures and its rules and regulations from the perspective of investors, taking into account evidence from overseas.
2. Council Members A variety of market users such as securities companies, investors, and system vendors are expected to become Council members. The Financial Services Agency of Japan and other such organizations are expected to become observers.
3. Others The secretariat of the Council will be Tokyo Stock Exchange, Inc.The first meeting of the Council will be held by the end of October 2020. Agendas, outlines of minutes, and other related materials will be published on the JPX website after meetings.  
FSA COMES KNOCKING - The Nikkei reported this morning that an FSA onsite-inspection of the TSE began yesterday. Such inspections are normally not pre-announced and never fail to find fault and require remedial action.  

🇯🇵 JAPAN • October 1st TSE Incident Report  & FSA Inspection