au Kabucom Securities will use Morgan Stanley’s trading execution platform

au Kabucom Securities is collaborating with Morgan Stanley MUFG Securities (MSMS) to utilize Morgan Stanley’s Japanese stock trading execution platform to expand its SOR (Smart Order Routing) service and provide trading execution algorithms from Monday, March 3, 2025. This will be the first time in Japan that the au Kabucom Securities’ trading execution algorithms will be offered to individual customers.

Morgan Stanley’s equity trading execution platform is a global platform that provides services to a wide range of institutional investors (asset management, pension funds, foundations, hedge funds, etc.) in equity markets in over 35 countries, including major countries around the world.

As exchange systems around the world become faster and more sophisticated every year and investor protection standards increase, Morgan Stanley continues to invest in state-of-the-art upgrades to meet the most demanding customer needs and the perspectives of exchanges and authorities. This has earned the firm the praise and support of institutional investors around the world, and it has maintained a top-class share in equity trading in the world.

Features of SOR service

Providing opportunities for price improvement and execution rate improvement through constant detection and execution of best prices and high-speed ordering

Morgan Stanley’s SOR has world-class data transfer and execution speed, and by utilizing this advantage, au Kabucom Securities aims to achieve high price improvement effects and improve execution rates by detecting and executing the best price in each market (TSE, PTS, dark pool) not only at the time of customer’s order but also until the full amount is executed.

In addition, not only at our company but in general, SOR compares quotes from multiple markets and orders are placed in the best market for the customer. At this time, major online securities firms other than au Kabucom Securities judge SOR only at the time of order, but Morgan Stanley’s SOR judges the best quote at all times, not just at the time of order.

For example, if a more favorable order is placed on the PTS or dark pool before all orders are executed at the exchange, the exchange order is pulled back and the order is placed in the more favorable market. au Kabucom Securities isthe only major online securities company that offers this kind of “pullback function”.

Suppression of customer order signals to the market

In addition to placing customer orders with IOC (Immediate or Cancel), the specifications aim for high speed and simultaneous arrival of customer orders in each market (TSE, PTS, dark pool).

This specification minimizes the possibility of latency arbitrage (pre-emptive orders, etc.).

Expansion of services for SOR orders

au Kabucom Securities will expand their automated trading services and order corrections that they have provided so that they can also be used for SOR orders.

This will enable customers to use a variety of transaction execution methods even in transactions using SOR.

Trade execution algorithms

au Kabucom Securities has selected seven types of Morgan Stanley’s trade execution algorithms, which are used by institutional investors around the world, and customized them for individual clients. In addition, customers can use the basic performance of the algorithms, which are constantly upgraded by Morgan Stanley.

By using 14 types of trade execution services, combined with au Kabucom’s existing automated trading services, the company can meet the various trade execution needs of their clients.

While using its algorithm and automated trading trade execution services, customers can enjoy the benefits of price improvements and improved execution rates through SOR.

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