Tokyo Stock Exchange and Osaka Exchange Censure Moomoo Securities Japan Over NISA Failures | LeapRate
The Tokyo Stock Exchange (TSE) and Osaka Exchange (OSE) have issued censures against Moomoo Securities Japan Co., Ltd. following an investigation into a series of compliance and operational failures at the online brokerage.
Both exchanges have also asked the company to submit a business improvement report.
The disciplinary action follows an inspection by Japan’s Securities and Exchange Surveillance Commission, which found that Moomoo Securities Japan sold at least 77 U.S. listed ETFs and ETNs while incorrectly labeling them as eligible for Japan’s NISA tax advantaged savings scheme.
As a result, 59 customers made purchases through NISA accounts using products that did not qualify.
Regulators said the company’s response to affected customers was inadequate. After initially offering to let customers cancel trades or move holdings into taxable accounts, Moomoo Securities Japan later discovered its systems could not process one of those options as planned, and it failed to properly notify all affected customers of the change.
The exchanges also found inconsistent treatment among the customers, with the company later admitting to a lack of staff to fix the resulting problems.
Beyond the NISA issues, the inspection identified further problems including the company’s refusal to process certain stock and investment trust transfer requests, gaps in its screening for suspicious transactions, and multiple deficiencies in its cybersecurity and IT risk management systems.
The exchanges concluded these failures stemmed from weaknesses in Moomoo Securities Japan’s broader business and internal management systems, which they said prioritized growth over compliance and customer protection.
