Six Major Japanese Brokerages Form Security Token Offering Association

A new association in Japan brings significant institutional support to security token offerings, just months before regulations on the public sale of coins in the country are to be implemented.

On Oct. 1, six major Japanese brokerages, including Nomura Securities and Daiwa Securities, formed the Japan STO Association, a self-regulatory organization for STOs.

In addition the two core members of the brokerage establishment, the association also includes a number of younger players, all founded in 1999 and focused on online trading: kabu.com Securities, Monex, Rakuten Securities, and SBI SECURITIES. SMBC Nikko Securities is notably absent from the collaboration.

The association will devise rules and guidelines for the issuing of security tokens.

In addition to regulating its members, the group will also take on lobbying duties, endeavoring to develop security tokens as a product and promote their use in the country.

"The Japan STO Association intends to consolidate expertise on securities businesses from among securities companies and other entities so that the STO business opportunities can be explored and developed in Japan," Monex said in a statement.

Earlier this year, legislative advances set the groundwork for the issuing of security tokens.

The offerings will be treated very much like offerings of conventional securities.

Security tokens will be considered "Interests in a collective investment scheme," and the buyers of them will have the right to receive distributions from the business of the issuer.

A Japan Security Token Business Association was formed in January and a Japan Security Token Association was established in May, but both operate more like trade associations than self-regulatory organizations.