Rakuten Securities
楽天証券Brokerage (NISA/iDeCo) · Rakuten Securities
- Fees
- Varies
- English
- Partial
A leading low-cost brokerage for NISA and index-fund investing, integrated with Rakuten points and Rakuten Bank.
What happens if a Japanese brokerage fails?
Segregated management, the Japan Investor Protection Fund’s ¥10m ceiling, what is and is not protected, and how to verify registration.
Direct answers
Japanese securities firms must keep customer assets segregated from their own, so if a firm fails those assets should ordinarily be returned; if segregation failed, the Japan Investor Protection Fund can compensate eligible customers up to ¥10m — but neither protects against market losses.
Key points
- Securities firms must segregate customer assets from firm assets by law.
- If a firm fails with segregation intact, customer assets should ordinarily be returned in full.
- If segregation failed, the Japan Investor Protection Fund can compensate eligible customers up to ¥10m.
- Neither protection covers market losses, issuer defaults, or price declines.
- Verify a firm in the FSA operator registry (and JSDA membership) before transferring funds.
Segregated management
The primary protection is structural. Japanese securities firms are required to segregate customer assets — cash and securities — from the firm’s own assets. Because your holdings are not the firm’s property, if the firm fails while segregation has been properly maintained, your assets should ordinarily be returned or transferred to another institution rather than lost in the bankruptcy.
This is very different from a bank deposit, which is a loan to the bank. In a properly run brokerage, your shares and funds remain yours; the firm is only the custodian and intermediary.
The Japan Investor Protection Fund
Segregation can, in rare cases, fail — through fraud or error. For that residual risk, the Japan Investor Protection Fund (JIPF) exists: if customer assets cannot be returned because segregation failed, JIPF can compensate an eligible customer up to ¥10m. It is a backstop for the failure of the safekeeping system, not routine insurance for every loss.
Critically, JIPF does not compensate normal market losses, an issuer defaulting on your bond, or a fund’s price falling. If your investment simply drops in value, that is investment risk, entirely outside the scope of investor protection.
How to verify a firm
Protection assumes a legitimately registered firm. Before transferring money, verify the firm in the FSA’s registry of financial instruments business operators and, where applicable, JSDA’s member list. Registration proves legal authorization to operate; it does not guarantee investment performance or the wisdom of any product.
A crucial modern caution: a legitimate brokerage registration does not make a social-media account or website claiming to represent it legitimate. Scammers clone brand names and impersonate real firms. Confirm you are dealing with the genuine, registered entity — not just a familiar-looking name — before sending funds or documents.
Who this is for
- Investors worried about broker safety
- People choosing where to custody assets
What this is not
- Anyone expecting protection against market losses
- Crypto-only holders (different rules)
Important cautions
- Segregation and JIPF cover custody failure, not investment losses; always verify a firm’s registration first.
Related products & services
SBI Securities
SBI証券Brokerage (NISA/iDeCo) · SBI Securities
- Fees
- Varies
- English
- Partial
Japan’s largest online brokerage by accounts, with a very broad low-cost fund lineup and full NISA/iDeCo support.
Monex Securities
マネックス証券Brokerage (NISA/iDeCo) · Monex
- Fees
- Varies
- English
- Partial
An established online brokerage often chosen for US-stock access and research tools, with NISA and iDeCo support.
Frequently asked questions
What should a beginner invest in inside NISA?
This is education, not a recommendation. Most beginners research low-cost, broadly diversified index funds — for example all-country (全世界株式) or S&P 500 trackers — rather than picking individual stocks, because low fees and diversification are within your control while returns are not. Understand that values fall as well as rise, match the risk to your time horizon, and never invest money you may need soon.