What is Saitori?
A saitori is a member of the Tokyo Stock Exchange who matches buy and sell orders.
How Does Saitori Work?
Saitori are similar to specialists in the New York Stock Exchange. They match up brokers' buy and sell orders, and each saitori specializes in certain listed securities.
A saitori has four roles. First, he is the principal; that is, he is the primary party to a transaction. He must be willing to buy and sell out of his own inventory to steady the market if there is a buying frenzy or a huge sell-off. Second, he is an agent; that is he places orders on behalf of his clients and ensures that they get the best price as fast as possible. Third, he is a catalyst; that is, he reports the prices of his securities in a timely manner and he sets the opening bid prices of his securities every morning based on supply and demand. Fourth, the saitori is an auctioneer; that is, he must disclose what the best buying and selling prices are and ensure that orders are transacted properly.
Why Does Saitori Matter?
In the U.S., specialists are not allowed to trade for their own accounts; they can only trade for clients. Saitori are less regulated in this area.