The transaction is with a Japanese vendor [Erika Nakazato]

Erika Nakazato Profile

Erika Nakazato. Marketing Director at Saxo Bank Securities Co., Ltd. After graduating from university, she engaged in interbank trading of foreign exchange and derivatives at currency brokers and foreign banks. When the company she worked for established “Orient Tradition FX” as a subsidiary (now Gaitame.com), she became involved in FX trading for many years. She later worked at DMM.com Securities, Alpari Japan, and Dukascopy Japan, among others, before her current position.

※This article is a republished and re-edited version of an article from FX攻略.com July 2019 issue. Please note that the market information described in the text may differ from the current market.
※This column is written based on the author's personal views and does not reflect the views of Saxo Bank Securities.

Recently, advertisements from unregistered FX operators have been seen. FX operators are required to register as Type 1 or Type 2 Financial Instruments Business Operators by the Prime Minister. The registration affairs are delegated from the Financial Services Agency Commissioner to the Director of the Finance Bureau (or the Fukuoka Finance Branch Director).

At the time of the 1998 revision of the Foreign Exchange and Foreign Trade Act, there was no registration obligation and various operators entered the market. Since 2005, when registration became necessary, the number of operators dropped to less than half. Before then, there was no supervising authority and no legal regulation, leading to practices such as operators trading on customers' accounts without consent or opening accounts without permission. At that time, telephone trading was the main method, and some operators quoted buy and sell prices with large spreads to customers to gain profit, which became a social issue.

In Japan, commodity futures companies were the main players starting FX trading, so the supervisory authority could have been the Ministry of Agriculture, Forestry and Fisheries or the Ministry of Economy, Trade and Industry, but when supervision was placed under the “Financial Services Agency” in the name of restoring absolute trust in FX, it was a relief. Furthermore, a self-regulatory organization, the Financial Futures Association of Japan, was established as a general incorporated association, introducing various forms of regulation, and operators that could not clear these regulations faced penalties.