Research Activities

JSRI’s seminars are attended by many researchers from universities and other research institutions as well as professionals working in financial and capital markets who use the seminars as avenue for a lively discussion.
JSRI also invites external researchers studying financial and capital markets to collaborate with and support JSRI’s research activities as visiting researchers.

JSRI serves as secretariat for the Society for the Economic Studies of Securities (SESS), a society of researchers focused on the theory, history, and policy of securities. In this role, JSRI actively supports SESS’s activities.

JSRI engages in a variety of efforts to cultivate and partner with young researchers, including inviting them to participate in seminars, providing a venue for lectures and presentations, and engaging them as visiting researchers.

JSRI issues a variety of publications compiling the results of its research activities.
JSRI’s “IllustratedGuide to Securities Markets” Series provides overviews of securities markets in Japan, the U.S., Europe, and Asia. Another multi-volume series, “Historical Materials on the Securities Market in Japan” is currently in progress, with Pre-War and Post-War volumes already published and a second Post-War volume forthcoming that will cover the period from the late 1960s to the bubble economy. JSRI also occasionally issues stand-alone publications summarizing the results of its research seminars.

【Securities Market in Japan】
We publish a Japanese-language book called “Securities Market in Japan: An Illustrated Guide” that explains the structure, function, and current state of the Japanese securities market in an easy-to-understand way, as well as an English translation of this book called “Securities Market in Japan” every two years.
This book is an English translation of the 2024 edition of “Securities Market in Japan: An Illustrated Guide” and is designed to be useful for a wide range of people who are interested in the Japanese securities market.

We, the Japan Securities Research Institute publishes “The JSRI Journal of Financial and Securities Markets,” on a regular basis.
This academic journal is published four times a year and publishes papers mainly analyze Japanese capital markets.
All academic papers can be downloaded for free in Japanese from the address below.

• https://www.jsri.or.jp/publication/periodical/economics/

English summaries are available starting from Vol.125.


Vol.129 includes the following seven academic papers.


The purpose of this paper is to summarize previous research on the economic benefits of fintech services for individuals—specifically household account bookkeeping apps and robo-advisors—that are currently in the process of diffusion. It also aims to empirically analyze the characteristics of users of these services in Japan.
The empirical analysis reveals that individuals with higher financial literacy, younger age, higher income, and greater impatience are more likely to use both household account bookkeeping apps and robo-advisors. Additionally, men and those who perceive a need for a human advisor are more likely to use robo-advisors. However, no significant relationship was found between risk aversion and the use of either fintech service.


Since the introduction of Bitcoin in 2008, cryptocurrencies—including stablecoins—have been expected to replace legal tender as a means of payment but have yet to fulfill that role. Instead, current cryptocurrencies have evolved toward facilitating exchange with legal tender. This paper presents the results of a theoretical analysis demonstrating that, contrary to expectations, restricting exchange with legal tender is key to creating new assets that complement the existing financial system by storing “value that money cannot buy.”


Since 2017, the U.S. SEC has pursued aggressive regulation of crypto assets, particularly by targeting ICOs that raise funds through the issuance of new digital tokens as unregistered securities offerings. This enforcement strategy is based on the Howey test, a case law approach used to determine whether an asset qualifies as a security. Several high-profile ICOs from major crypto industry players have been subject to enforcement actions, and the SEC has expanded its regulatory reach to include areas such as insider trading in crypto assets, staking services, and NFT issuance.
The SEC’s approach to crypto asset regulation has sparked strong opposition from the industry and criticism from various stakeholders, including within the SEC itself, for being an unjustified form of “regulation by enforcement” that undermines the predictability of economic activity. This approach presents several issues, such as the absence of a public comment process, which is a fundamental component of formal rulemaking, and the failure to incorporate input from the business community.
More recently, SEC enforcement in the crypto sector has faced political (legislative) and judicial challenges, signaling potential shifts in the regulatory landscape.


This paper attempts to construct a simple theoretical model of dark pools. In the model, two informed investors choose between the lit market and the dark pool. In the lit market, market makers are always present, ensuring that transactions do not fail; however, there are risks associated with market impact and front-running. On the other hand, in dark pools, there is no market impact, but transactions may fail unless investors coordinate with each other.
The analysis reveals that when the risk of front-running is low, “Equilibrium 1,” where only the lit market is used, is the sole equilibrium. However, when the risk of front-running is high, multiple equilibria emerge: in addition to Equilibrium 1, “Equilibrium 2,” where both platforms coexist, and “Equilibrium 3,” where only dark pools are used, also become possible. Which of the three equilibria is realized depends on the self-fulfilling expectations of investors.
The three equilibria can be Pareto-ranked in terms of economic welfare: Equilibrium 3 yields the highest economic welfare, followed by Equilibrium 2, while Equilibrium 1 results in the lowest welfare. In other words, despite its lower economic welfare, the equilibrium in which only the lit market is used can materialize as a result of a “coordination failure” among investors.
The existence of dark pools influences price formation in the lit market. Since private information held by informed investors may remain within the dark pool, both the informational efficiency and volatility of prices in the lit market decrease.


In recent years, the growing interest in investment management—driven by the launch of the new NISA system and advancements in financial technology—has expanded opportunities for individual investors, including those with limited knowledge and experience, to participate in financial markets. Efforts to enhance general financial literacy, such as initiatives by the Financial and Economic Education Promotion Organization, are underway. At the same time, the need for investor and consumer protection through financial regulation is increasing.
However, an excessive focus on strengthening regulations to protect investors may raise regulatory costs and inadvertently limit investment opportunities for individuals with sufficient knowledge and experience. Therefore, when designing financial regulations aimed at protecting individual investors, it is essential to consider regulatory costs alongside the convenience and accessibility of financial transactions and services.
In this regard, some current financial regulations already incorporate flexibility based on individual investor attributes, while others require financial service providers to take actions according to customer characteristics. Going forward, to align financial regulations more closely with real-world transactions, greater emphasis should be placed on tailoring regulations to investors’ financial literacy, including their knowledge and experience. Additionally, financial regulations should be periodically reviewed and adjusted in a flexible manner to reflect evolving market conditions and investor needs.


This paper explores the need for legal regulation of AI in financial services, primarily through a review of previous studies. Specifically, it examines whether new laws and regulations for AI are truly necessary and, if so, what types of regulations should be implemented and for what reasons. This analysis is based on the same rule principle, which asserts that “as long as similar services with similar risks are provided, the same regulations should apply, regardless of whether the service is delivered by humans or AI.”
The study’s main conclusion is that current legal frameworks assume only humans can act autonomously and be held accountable for their actions. Therefore, to uphold the same rule principle, a new legal regime for AI may be required—such as a system where AI users are held liable for damages based on the AI’s negligence. This highlights the potential necessity of establishing a legal framework that explicitly assigns liability for AI-driven actions.


Crypto assets in Japan are primarily regulated by the Payment Services Act and the Financial Instruments and Exchange Act (FIEA). The regulatory framework distinguishes between these two laws based on the nature of the transactions involved. Specifically, it is considered appropriate to apply investment-related financial regulations to transactions deemed to involve the sale of investment products, while settlement-related regulations apply to transactions involving payment and settlement instruments.
However, in recent years, the rapid emergence of the financialization of crypto assets has raised the need to reconsider this division of regulatory roles. The financialization of crypto assets refers to the phenomenon in which services that are functionally equivalent or similar to traditional financial instruments are now being provided using crypto assets. When reconsidering the regulatory framework in response to this financialization, two main options emerge:
1. Expanding the scope of crypto asset transactions subject to the FIEA, or
2. Revising the regulation of crypto asset exchange businesses under the Payment Services Act.
This paper examines the significance and historical development of crypto asset exchange regulations and identifies key issues related to adapting regulatory frameworks to the ongoing financialization of crypto assets.



Vol.128 includes the following four academic papers.


Since the mid-2010s, the number of privately held companies in the U.S. valued at over $1 billion, known as “Unicorns”, has grown. Unlike companies like Cargill or Bechtel that choose to remain private as a long-term strategy, many unicorns either go public via IPO or are acquired by other companies after a few years.
This trend is driven by changes in the funding environment and strategic considerations of startups. Non-traditional investors such as mutual funds, hedge funds, pension funds, and sovereign wealth funds have entered the startup investment space, allowing these companies to remain private longer. Startups, in turn, benefit from staying private to protect sensitive information related to human capital, patents, and organizational assets.
Unicorns are predominantly found in tech-related industries, where intangible assets play a significant role. These companies aim to avoid disclosing information to competitors and to secure talent while rapidly achieving network effects and economies of scale. Consequently, they seek ways to raise substantial funds while avoiding public listing. However, challenges persist. Startups must address the need to provide liquidity for employee stock options to attract top talent. Additionally, institutional investors, traditionally focused on public markets, often push late-stage startups toward IPOs, exerting pressure on unicorns to go public.


This paper explores the design of a public investor protection system in Japan, drawing on the U.S. Fair Fund system and Taiwan’s Investor Protection Center. The U.S. Fair Fund system redistributes penalties and disgorged profits from violators to affected investors for swift compensation. Taiwan’s Investor Protection Center represents investors in lawsuits and strengthens corporate governance, playing a direct role in investor protection.
The paper argues that Japan should establish a public investor protection mechanism based on these examples. Beyond distributing penalties, such a mechanism should address cases where penalties alone cannot fully compensate victims by representing them in damages claims. However, the scope and role of this mechanism must be carefully defined to prevent excessive interference in corporate management.
Analyzing the U.S. and Taiwanese models, the paper outlines design challenges and proposes directions for a system tailored to Japan’s capital market environment. Continued discussions are necessary to create a comprehensive and systematic compensation framework that ensures swift and effective investor protection. This would strengthen the foundation for sustainable growth and development in Japan’s capital markets.


This study examines factors influencing individual investors’ decision-making regarding risk asset investments, using microdata from the Japan Securities Dealers Association’s survey, Attitudes of Individual Investors Toward Securities Investment (2018–2022). The analysis also considers the role of financial literacy, which has gained importance in promoting household participation in financial markets.
The degree of risk asset investment was measured by the proportion of stocks in an individual’s total financial assets. Statistical analysis was conducted to explore the relationships between this measure and investor attributes, risk preferences, time preferences, and financial literacy.
Key findings include:
1. Decision-making in risk asset investments strongly correlates with risk tolerance—those with higher risk tolerance tend to allocate more to risk assets.
2. Financial literacy indirectly influences risk asset investment through its positive relationship with risk tolerance, rather than having a direct impact.
3. A certain level of financial literacy underpins a stable relationship between risk tolerance and risk asset investment.
Additionally, factors such as age and gender were found to be associated with risk preferences and risk asset investments.


This study investigates whether post-currency crisis institutional cooperation among Asian countries has fostered regional capital circulation by directing Asia’s savings toward Asia’s investments. It also examines concerns about whether U.S. interest rate hikes, which have triggered capital outflows from emerging markets, have contracted Asia’s intra-regional capital circulation. To address these questions, the study applied network analysis to observe the dynamics of international financial networks in Asia.
Key findings include:
1. Since 2015, Asian countries have shown significant growth in outbound investments and, with the exception of Malaysia, have also increased external funding. This highlights a shift in Asian countries becoming net capital providers.
2. Using eigenvector centrality to measure importance within the international financial network, the study found no indication of a decline in the status of Asian countries despite U.S. interest rate hikes. Community detection revealed that Asian countries are integrated into a network dominated by Japan and the U.S.
3. Measuring network density to observe intra-regional capital circulation, the study found that such circulation has increased. In terms of operations, regional capital circulation now rivals that of the U.S., while the proportion of intra-regional funding has also risen.



Vol.127 includes the following six academic papers.


This paper aims to examine the Collective Defined-Contribution Plan (CDC) as a guideline for corporate pension reform in Japan and to clarify the implications that can be derived from it. The two main reforms are (1) the abolition of defined-benefit company pensions and their integration into defined-contribution pensions and (2) collective investment by integrating defined-contribution pensions. This paper examines these two reforms.


This paper analyses the SEC’s regulatory approach to new technologies that perform predictive data analytics, including AI, by discussing the Proposed Rule published by the SEC in July 2023. The Proposed Rule seeks to manage conflicts of interest that may arise from the use of new technologies by broker-dealers and investment advisers. The Proposed Rule is a different regulatory approach than the traditional disclosure-based management of conflicts of interest and expands the definition of conflict of interest itself. Furthermore, the rule’s fairly broad definition of new technologies (Covered Technology), including AI, increases the cost of implementing the rule and may prevent the use of new technologies, particularly for smaller firms. The final part of this paper identifies the implications and challenges of the SEC’s regulatory approach to new technologies and considers the issues that the SEC needs to address in preparation for final rulemaking.


This paper seeks to identify causal relationships between the performance of listed subsidiaries since the 2000s, assuming that the status of subsidiary listing may be an endogenous variable. The results of the analysis show from the pooled and panel analyses that the listed subsidiary dummy is significantly positive for ROA in both periods. This means that the financial performance of listed subsidiaries is good, a result that is consistent with previous studies. On the other hand, the coefficient of the listed subsidiary dummy was not significant for either financial or stock price performance in the system GMM estimation considering that the explanatory variables including listed subsidiaries are endogenous variables.


This paper reports on the effects of governance reform in Japan. After the introduction of the Stewardship Code and the Corporate Governance Code, Japanese institutional investors were required to fulfil their fiduciary responsibility and operational efficiency, and at the same time they were expected to monitor companies. The purpose of this paper is to show the effects of governance reform in Japan by analyzing the relationship between shareholder and employee interests and institutional investors before and after the introduction of these two codes.


This paper provides an overview of the concept of financial well-being in the United States, its historical development and current status, and reports on the support measures provided by financial educators, financial advisers and others. In the US, the CFPB defined financial wellbeing in 2015 and has been conducting research and initiatives to make it a reality. Financial well-being research initially began as a new goal for financial education, but as the elements to reach this goal have become clearer, it has also brought different The US case is a good example of this. Following the example of the US, support for changing financial behavior is needed in Japan to help people reach financial well-being, and financial education and investment advice will become more connected.


As one interest rate indicator for the post-LIBOR era, there has been debate in the US over the Credit Sensitive Rate (CSR). While there have been voices in favor of CSRs, particularly in the banking industry, the International Organization of Securities Commissions (IOSCO) has recognized that some CSRs do not comply with the IOSCO Principles on Interest Rate Indicators because they are flawed in the same way as LIBOR. The IOSCO Principles are not legally binding norms (soft law) but are de facto binding in international financial markets and have a significant impact on the choices of market participants. The democratic legitimacy of soft law by international organizations in international financial markets has been discussed in the past, but this paper examines the legitimacy of IOSCO’s current response from the new perspective of interest rate index reform. It concludes that, first, legitimacy is questionable from the perspective of procedures and processes, specifically in terms of consultations with stakeholders and consistency with individual national laws. Secondly, from the perspective of effectiveness, specifically in terms of the ambiguity of the decision-making criteria, disobedience to the principles set out in the IOSCO Principles, and consideration of the differences in the nature of each interest rate indicator, it is difficult to assess that it is based on sufficient legitimacy.



Vol.126 includes the following six academic papers.


In Japan, an exposure draft of the Sustainability Information Disclosure Standard by the Sustainability Standards Board was published on 29 March. This paper introduces and discusses the exposure draft of the Working Group on Sustainability Information Disclosure and Assurance.


Assuming investors have warm-growth or externality utility for ESG scores and firms choose a combination of monetary profit and ESG scores, the paper examines what ESG score level is chosen in equilibrium.


The GPIF (Government Pension Investment Fund) invests in equities based on ‘ESG indices’. Such investments are supposed to improve the risk-adjusted returns of the GPIF’s portfolio over the long term. The ‘alpha effect’ results from the return of the ESG investment portfolio exceeding the return of the overall market. Additionally, the ‘beta effect’ results from improving the overall market returns through ESG investments. This paper argues that the ‘alpha effect’ of current ESG index-based investments is likely to be negative.


The presence of female directors is also increasing in initial public offerings. This paper empirically examines the effect of the presence of female directors on the level of underpricing of the IPO price. The empirical analysis showed that the ratio of female directors to all directors and the dummy variable indicating the presence of female directors had a negative and significant effect.


Appropriate ESG responses are a global movement, with all countries and all industries showing a high level of interest. There is no dearth of studies examining how the global banking industry is addressing ESG compared to other industries. The relevant studies are diverse and numerous. However, the number is very small if one focuses exclusively on studies that examine whether banks perform better depending on the extent of ESG disclosures and what incentives banks have to disclose. Of these, the main theme of this paper is whether disclosure pays off.


This paper describes more than ten characteristics of intangible assets and intangible debts, including their proprietary nature. It analyzes their economic consequences and shows that there are both favorable and undesirable aspects of intangible assets and debts, respectively, which coexist and are empirically unknown.



Vol.125 includes the following four academic papers.


This paper analyses count data for subsidiaries by country in Europe with the aim of understanding the effects of taxation on the location of Japanese multinationals in recent years by industry sector.


Regarding the impact of intra-company remuneration disparities on company performance, both positive and negative impacts have been reported for overseas companies, and it is an empirical question as to which impact is more dominant. In addition, as the labor market situation differs from country to country, it is not known whether the results of studies targeting overseas firms are applicable to Japanese firms.
This paper investigates the relationship between the remuneration gap between directors and employees and corporate performance in Japanese firms, breaking it down into the part explained by economic factors and the part not explained by economic factors.


The scale of equity options trading in the US has increased over the past few years. This is due to the popularity of meme stocks, no brokerage fees and active trading in the stock market. Under these circumstances, a trading practice known as payment for order flow (PFOF), in which retail brokers receive a rebate when they forward orders to other brokers (wholesalers, etc.) for execution of investors’ orders, has been attracting attention. This paper focuses on the zero-commission practice of retail brokers waiving brokerage commissions for customers as a factor in the expansion of the stock options market, and examines the possibility that market conditions, such as investor behavior, have changed as a result of the expansion of this practice.


This study analyses the determinants of the takeover premium and the fairness of the terms of the transaction in a wholly-owned subsidiary conversion, focusing on the information asymmetry between the parent company and the ordinary shareholders of the subsidiary and the bargaining power of the parent company in a wholly-owned subsidiary conversion to dissolve the parent-subsidiary listing.