Exchanges Censure Moomoo Securities Japan Over NISA Misrepresentations and Compliance Failures
The Tokyo Stock Exchange (TSE) and Osaka Exchange (OSE) have issued official censures to Moomoo Securities Japan, and ordered the firm to submit a business improvement report following severe operational and compliance failures. The regulatory action stems from deliberations by Japan Exchange Regulation following an inspection by the Securities and Exchange Surveillance Commission.
According to exchange disclosures, the brokerage prioritized customer acquisition over regulatory compliance after launching its online trading service in October 2023.
The inspection identified multiple breaches of the Financial Instruments and Exchange Act (FIEA) and related financial regulations:
- Inappropriate NISA Product Registration: Between February 21 and May 27, 2025, Moomoo Securities falsely listed at least 77 ineligible U.S. ETFs and ETNs as tax-exempt under the Nippon Individual Savings Account (NISA) scheme. This resulted in 59 retail customers executing unauthorized transactions across 25 products. A similar breach occurred between late 2025 and early 2026 due to the firm's failure to establish effective internal checks.
- Mishandling of Affected Customers: The firm provided inadequate and inconsistent remediation to affected investors. Moomoo Securities limited client recovery options for its own convenience, failed to disclose key tax impact decisions, and corrected annual investment limits for only one of the 59 impacted customers by December 2025 due to a lack of human resources.
- Breach of Duty in Securities Management: Since April 2024, the company uniformly refused customer requests to withdraw domestic listed stocks, and starting September 2024, blocked deposits and withdrawals of publicly offered investment trusts. Management mistakenly viewed handling these transfer applications as optional rather than a legal duty.
- Anti-Money Laundering (AML) Omissions: Between September 2023 and July 2025, Moomoo Securities failed to evaluate or report potentially suspicious transactions for at least 1,531 applicants whose account openings were rejected, violating the Act on Prevention of Transfer of Criminal Proceeds.
- System Risk and Cybersecurity Governance: Regulators found widespread deficiencies across system risk assessments, vulnerability management, failure tracking, and IT governance. Core systems were left out of risk inventories, and executive management failed to act on known IT security risks.
The exchanges determined that Moomoo Securities engaged in "extremely careless business practices" that violated just and equitable principles of trade, driven by inadequate internal management systems and a lack of qualified compliance personnel.
Norbert Gehrke
