Tokyo exchange eyes derivatives-driven ETFs to boost yield strategies

August 3, 2025-- In a move to tap into the growing appetite for yield-enhancing strategies, Japan's main stock exchange is pushing to allow listings of actively managed exchange-traded funds (ETFs) that use over-the-counter (OTC) derivatives, such as swaps and options.

The Tokyo Stock Exchange (TSE) is seeking regulatory approval to list such funds by June next year. Currently, Japanese ETFs are restricted to listed instruments like those on Osaka's derivatives market, but the exchange now wants flexibility for OTC instruments as well, said Kei Okazaki and Ryutaro Someya from the TSE’s new listings department.

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