Yensai.com Securites Co., Ltd

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Realtime Display of Prices from Leading Securities Traders Capable of Updating 400 Different Items per Second Japan’s First Multi-Dealer System for Government Bonds

This example is a translation of an article that originally appeared on Fujitsu's Japanese Web site.

An online transaction system for government bonds must be extremely safe and must be able to process large amounts of data at high-speed.
Yensai.com Co., Ltd, a securities company that provides Japan's first government bond online transaction multi-dealer system, adopted Symfoware Server Enterprise Extended Edition with Symfoware Server Parallel Cluster option for its core database, combining high-speed processing with a high level of safety.

Display of Multiple Prices from Securities Traders

In the Japanese government bond market, the trading spread (the difference between the purchase price and selling price of a stock) is small and the market itself is very competitive.
For securities companies to ensure profits, they look to reduce their trading-related costs.

As a means of addressing the problem, a few years ago several securities companies started their own online transaction systems, which they ran as single dealer systems.
However, as they had to invest a huge amount of money to build up these systems, the securities companies realized that they could reduce their investment costs by jointly investing in a single system, and came up with the idea of a multi-dealer system.

This kind of online transaction system, operated by multiple securities companies, also brings benefits for investors.
With previous single dealer systems, investors would have to make separate telephone inquiries to each of the many traders in order to determine the selling price of a particular stock and decide from which trader to buy.
The multi-dealer system averts this disadvantage by employing methods that share basic characteristics with online auction houses.

"Compared to making phone inquiries, being able to display prices from multiple companies on a single screen enables investors to determine accurate government bond price information and to speed up the process of buying and selling bonds. Providing both investors and securities companies with business benefits is Yensai.com's business model, and we are proud to be able to state that ours is Japan's first online transaction system for government bonds with which you can compare and select prices from multiple securities companies in real-time," explains Mr. Toshiharu Kido, the president of the company, regarding the purpose of establishing Yensai.com Co., Ltd.

Symfoware Server Enterprise Extended Edition – Chosen for its Speed and Reliability

Director Mr. Tohru Kaji explains the points that needed to be kept in mind when creating the Japanese government bond online transaction system: "We asked Fujitsu to create all aspects of the system because they had already amassed considerable experience in building proven systems for the securities trading market, including the Tokyo Stock Exchange and the Osaka Stock Exchange.
"One of the biggest reasons why we made up our mind to adopt Symfoware Server Enterprise Extended Edition and Symfoware Server Parallel Cluster Option (*1) was because we thought using Fujitsu's database system was definitely the safest way for users to be able to build up the system in a short period of time and to run the system stably. We knew we could also rely on an appropriate and smooth response from Fujitsu on the off chance that anything should go wrong."
(*1): Includes the Symfoware Server Hot Standby Option.

For Yensai.com, the priority issue regarding system design was transaction speed. They defined the prime goal for the system as being able to achieve and maintain real-time communication equivalent to talking on the telephone.
The acceptable length of the processing time is just a few seconds. A mere ten seconds after a securities company says "Trade at this price", the information is already too old to be of value.

Moreover, up to 15 companies are planning to connect the multi-dealer system for multiple securities companies. The system must be able to extract the best price from the prices sent by these 15 companies and send that information on to investors without any delay.

"Currently(*2), 7 securities companies are connected to the system, but an additional two companies are now in the test phase, which means the total will soon be nine. More are expected to join us before the year is out. It is absolutely vital for us that there is no adverse effect on system response as the system load increases in this way. It is with this in mind that we decided to install Symfoware Server Parallel Cluster Option.” says Mr. Kaji.
The more servers they have, the better the throughput capacity that they can attain by sharing the load using the Parallel Cluster Option function.
(*2): As of end of April, 2002

Capable of 400 Processes per Second with High Levels of Security

Yensai.com officially started sales activities for investors in January, 2002.
They started the official operation of the online transaction system in April, 2002.
President Kido says, "Nine securities companies (*3) participate in this system as stockholders, and others are asking to join us. We realized that our system had become a success when big names such as Daiwa Securities SMBC CO., Ltd, Nikko Solomon Smith Barney Securities, and Nomura Securities joined us. Securities companies besides stockholders have also started to take notice of Yensai.com and I am confident that our business model is competitive."
(*3): As of end of April, 2002.

"Fujitsu designed the system and they guarantee that the system will work correctly even if the sale and purchase prices of 200 targeted stocks are updated every second. Currently we're capable of more," says President Kido proudly of the capabilities of the system.

During the operational test that is one of the requirements for being granted a Proprietary Trading System (PTS) license, Yensai.com carried out repeated load tests with 400 data transmissions per second and simultaneous orders by 10 investors to confirm that the system performed as designed.

As 500 to 1,000 corporate investors deal in Japanese government bonds, Yensai.com paid special attention to security. Behind the obligatory firewall, they implemented a system of client-server authorization using SSL 128-bit encryption for client-server communications to shield all entries, exits, and gateways from the outside.

"We are also using Fujitsu's services to block attacks from outside and monitor system conditions 24 hours a day. In terms of robust security, our online transaction system must be one of the safest Web-based systems in Japan," says Mr. Kaji.

No problems were found after the hot standby function started. "The servers are of course duplicated but we determined that the most important issue in overcoming problems that may arise is whether you can immediately switch the database or not, so we made up our mind to install Symfoware Server hot standby option. When we tested the system, it took less than one minute to resume operations," says Mr. Kaji.
This is because Symfoware pre-activates the RDB system in the standby machine.

When it comes to the construction of a short-term system and its stable operation, Yensai.com have been more than successful by implementing Fujitsu’s Symfoware Database Design Support Service (*4), Symfoware Database Technical Service, FENICS network, and the outsourcing services of the Tatebayashi System Center.
(*4): Specifically, the Database Cluster Design Support and Database Operation Design Support were selected and adopted.

The Tatebayashi System Center (*5) is one of the two main Fujitsu centers in Japan. It specializes in advanced network technology and highly reliable security and features integrated operation systems that offer high-power computing and quick and correct solutions.
(*5): See the Network Service page for details.

Awaiting the Full Benefits of Symfoware

As of early 2000, while Yensai.com’s goal of an online trading system for government bonds had begun to make headway among investors, there was still some way to go before the company’s policy statement that "The Internet equals success" could be said to be proven.

"It is true that some investors hesitate to replace the traditional method of telephone-based trading with the Internet. For example, some feel very unsure about Internet security after well-publicized cases of virus infections and hacker attacks. We provide such customers with dedicated lines using FENICS, by which they can access countermeasures. With the rapidly evolution of security technologies, however, this type of solution will disappear in the near future," says President Kido about the current challenges.

He continues, "This Japanese government bond online transaction system has only just come into use, but because it is already highly praised by a number of corporate investors, I expect the number of customers to keep on growing in the future. At this point, unfortunately, we have not yet seen the kind of intense trading activity that could test the system to its limits, but I look forward to the day when Symfoware will be able to exhibit the full scope of its potential by competently handling cascades of orders from a multitude of investors. We have high expectations of the comprehensive strength of Fujitsu as an IT vendor and of Symfoware's ability as a domestically made database," concludes President Kido with a smile on his face.

Company Overview

Yensai.com Securites Co., Ltd
Established: January, 2001
Capital: 1.26 billion yen
URL: http://www.yensai.com/
Overview of operations: Established by the investment firms Daiwa SMBC, Nikko Solomon Smith Barney Securities, and Nomura Securities for the purpose of trading Japanese government bonds online. Subsequently, Tokyo Mitsubishi Securities, Deutsche Securities, Mizuho Securities, Morgan Stanley Securities, Credit Suisse First Boston Securities, UFJ Tsubasa Securities, Shinko Securities, and BNP Paribas Securities joined to establish the infrastructure of a multi-dealer system that has been put into service in online transactions in government bonds.
* Company name as of July, 2002