What will happen with Mitsubishi UFJ eSmart Securities' fee-free service? Online securities reorganization based on SOR/credit interest rate reduction

[Summary]

Starting from May 18, 2026, Mitsubishi UFJ e-Smart Securities has waived transaction fees for domestic spot stocks and domestic margin trading in principle, subject to the selection of SOR orders. In addition, from June 1, 2026, interest rates and stock lending fees for systematic margin transactions and stock lending fees for general margin transactions (long-term) will be reduced.

However, not all transactions are free of charge. Local markets such as Nagoya Securities, Fukusho Securities, and Securities Securities, telephone orders, and compulsory repayments for credit transactions are not eligible for free payment or are subject to separate charges.

The essence of this issue is not the domestic stock commissions themselves, but the fact that the securities business is shifting from "flow revenue from trading commissions" to "platform revenue centered on assets under custody, credit balances, investment trust balances, and bank collaboration."

First, the conclusion

The latest move by Mitsubishi UFJ e-Smart Securities is not just a price-cutting competition.

Looking at the bigger picture,

“The main battleground for online securities has shifted from fees to retaining assets under custody.”

It shows that.

Domestic stock trading fees used to be an easy-to-understand source of income for online securities companies. However, with SBI Securities and Rakuten Securities moving forward with waiving domestic stock commissions, the days of differentiating their stocks based solely on trading commissions are coming to an end.

The significance of Mitsubishi UFJ e-Smart Securities' decision to make it free of charge with SOR conditions and to lower credit costs is to strengthen the gateway for the MUFG Group to capture personal financial assets and connect them to banks, cards, investment trusts, margin trading, foreign stocks, and digital services.

What was announced?

Starting from May 18, 2026, Mitsubishi UFJ e-Smart Securities will, in principle, waive transaction fees for domestic spot stocks and domestic margin trading when SOR orders are selected.

At the same time, trading fees for petit stocks (shares less than one unit) will be waived starting from orders placed after system maintenance ends on May 16, 2026.

Furthermore, interest rates and stock lending fees for margin trading will be reduced from June 1, 2026.

Item	Revision details
Domestic spot stocks	Free in principle if you select SOR order
Domestic margin trading	Free in principle if you select SOR order
Petit stocks	Free trading fees
Systemic credit interest rate	From 2.98% per year to 2.80% per year
Systematic credit stock lending fee	From 1.15% per year to 1.10% per year
General credit (long-term) stock lending fee	From 1.50% per year to 1.10% per year

On the other hand, exceptions are also important.

Notes on making it free of charge	Contents
SOR conditions	SOR order selection is required in principle
Local market	Name stock securities, Fukusho securities securities, securities securities securities, etc. are not eligible
Telephone order	Operator fees etc. will be charged separately
Compulsory repayment	Compulsory repayment of credit transactions is not eligible for free
Stocks subject to SOR	Stocks designated by the company among stocks listed on the TSE

In other words, it is not ``unconditionally free of charge for all domestic stocks,'' but rather a conditional fee redesign centered on SOR.

Why is SOR a condition?

SOR is an abbreviation for Smart Order Routing, and it is a system that routes orders by searching for favorable conditions from multiple connection destinations such as TSE and PTS.

Mitsubishi UFJ e-Smart Securities explains that SOR orders are for TSE-listed stocks designated by the company, and PTS alone cannot be designated. The design is such that when SOR is used, it may be relayed to PTS.

What's important here is that waiving fees is not just a discount, but is designed to bring the ordering experience itself to SOR.

For securities companies, SOR has the following meanings:

Issue	Meaning
Customer experience	Easier to highlight the possibility of price improvement
Trading infrastructure	Connections with TSE, PTS, dark pools, etc. become important
Data	Easily understand which customers order under which conditions
Competitive Axis	Easier to compete on execution quality rather than fees

However, SOR does not always guarantee the best results. Results vary depending on the target market, board thickness, order quantity, and time of day.

Why can securities companies make services free of charge?

Even if trading fees for domestic stocks are waived, this does not mean that securities companies will lose their revenue source.

Current online brokerages combine multiple sources of income.

1. Investment trust balance income

With the spread of the new NISA, the accumulated balance of investment trusts has become an important source of income.

For investment trusts, a portion of the trust fee may be paid to the sales company. The selling company's share in low-cost index investment trusts is small, but as the balance accumulates, it tends to become a stable source of income.

Trading fees are one-time flow income, but income linked to investment trust balances has a stock nature.

2. Financial income from margin trading

In margin trading, the sources of income are interest rates on margin purchases and stock lending fees on margin sales.

Mitsubishi UFJ eSmart Securities' aim in lowering credit interest rates and stock lending fees is not simply to lower interest rates. If transaction costs can be lowered to increase the account usage rate and open interest balances of active margin trading customers, it is possible to maintain and expand overall financial profits.

This is a low-margin, high-volume sales concept in which even if the interest rate is lowered, profits will remain if the volume increases.

3. Foreign stocks/exchange spreads

Even if domestic stocks are commission-free, there are other profit opportunities in foreign stocks, foreign currency-denominated MMFs, FX, futures/options, CFDs, etc.

Particularly when investing in US stocks, trading commissions and exchange spreads can be a source of income. Currency spreads occur when yen is exchanged for dollars, and when dollars are exchanged back to yen.

However, not all currency spreads result in net profits. There are also hedging costs, system costs, and liquidity costs, so it is important for investors to understand that even if domestic stocks are free, other products have costs.

4. Bank collaboration and group LTV

Mitsubishi UFJ eSmart Securities is a digital securities company of the MUFG Group.

A securities account can be a gateway to bank accounts, cards, investment trusts, foreign currencies, home loans, robo-advertising, inheritance and asset succession, etc.

What is important here is that this does not mean that a single securities company can freely manage customers' segregated managed assets. There is value in increasing the number of points of contact throughout the group, such as bank deposits, payments, investment trust balances, and foreign currency transactions, through securities accounts.

In other words, even if securities commissions are lowered, if the customer lifetime value can be increased for the entire group, it becomes economically rational.

5. Large-lot preferential treatment and locking in of asset balances

With this announcement, large-scale preferential treatment plans will also be expanded.

The new conditions include not only the open interest balance and new contract proceeds, but also the average balance of investment trusts and the evaluation of assets under custody.

This is an important change. This shows that the KPIs that securities companies are looking at are expanding from simply the number of purchases and sales to include credit balances, investment trust balances, and assets under custody.

How has the revenue model changed?

The securities business is changing as follows.

Topic	Traditional Fee Model	Current Platform Model
Main revenue sources	Domestic stock trading fees	Investment trust balances, credit interest rates, foreign currencies/foreign stocks, group collaboration
KPIs to focus on	Number of trades, contract value	Number of accounts, assets under custody, investment trust balance, credit balance
Customer contact points	Only during transactions	Savings, bank cooperation, cards, foreign currencies, credit transactions
Competitive axis	Low fees	Cost, execution quality, product lineup, economic zone
Risks	Decline in profits due to fee competition	Increase in low-profit accounts, system investment burden

Free service is an easy-to-understand benefit for customers. On the other hand, for securities companies, this is a strategy to use domestic stock commissions as an entry-level product and connect them to a wider range of financial services.

Benefits and points to note for investors

For investors, the elimination of commission fees is a clear benefit.

Especially when it comes to small-scale investments, diversified investments, fractional shares, and NISA transactions, the lower the commission burden, the easier it will be to invest.

However, there are some points to consider when making it free.

Points to check	Reasons
SOR conditions	In principle, SOR selection is required for free
Excluded transactions	Local markets, telephone orders, forced repayments, etc. are handled separately
Credit interest rate	Interest is charged even if there are no fees
Stock lending fees/reverse daily movement	Be careful of holding costs when short selling
Foreign stocks/foreign currencies	There are different fees and spreads than for domestic stocks
Execution quality	It is necessary to look not only at the free price but also at the execution price

It is important to look at the total cost, not just the "0 yen commission".

Industry Impact

This move puts three pressures on the online securities industry.

Re-acceleration of low-cost competition

The low-cost competition among major online securities companies has progressed to the next level as MUFG-affiliated Mitsubishi UFJ e-Smart Securities has followed suit in earnest by SBI Securities and Rakuten Securities, which have taken the lead in eliminating domestic stock commissions.

For small and medium-sized securities companies, it will become even more difficult to maintain profits from domestic stock commissions.

Comparing margin transaction costs is important

As domestic stock commissions come closer to being free, investors will begin to compare margin interest rates, stock lending fees, inverse day rates, foreign stock commissions, and foreign exchange spreads.

We are now in an era where customers will be selected based on the total cost, not the apparent fees.

Megabank comeback

For the MUFG Group, securities accounts are the gateway to accessing personal financial assets.

If it can be used across bank accounts, cards, investment trusts, foreign currencies, robo-ads, and asset management apps, it is possible that lower fees for individual securities companies can be absorbed by the group as a whole.

Indicators to watch in the second half of 2026

When looking at the future of online securities, it is not enough to simply count the number of accounts.

The indicators you want to check are as follows.

Indicators	Meaning of viewing
Number of active accounts	Are accounts not only opened but also used
Asset balance under custody	Is the platform collecting assets?
Investment trust balance	Are you able to convert the new NISA into stock income
Credit open interest balance	Depth of financial income
Foreign stock/foreign currency trading	Income sources other than commission-free
SOR usage rate	Did waiving fees change actual order behavior
Bank cooperation rate	Ability to send customers to group economic areas

If these things grow, waiving fees can be seen as an investment in expanding the platform, rather than just a price reduction.

Summary

Mitsubishi UFJ eSmart Securities' commission-free and credit cost reductions indicate that the axis of competition in the online securities industry has changed.

Domestic equity fees are no longer a key differentiator. In the future, the key issues will be execution quality based on SOR, investment trust balances, margin transaction costs, foreign stocks/foreign currencies, bank cooperation, and group economic zones.

For investors, while the elimination of commission fees is welcome, they need to check the total cost, including interest rates, stock lending fees, currency spreads, non-eligible transactions, and contract prices.

Investors looking at securities companies are now at a stage where they need to track not only the number of accounts, but also assets under custody, investment trust balances, credit balances, and bank cooperation ratios.

Source

This article is for educational and informational purposes only, based on public information. It is not a recommendation or solicitation to buy or sell any specific security or financial product. Although care is taken with accuracy, the content and future investment outcomes are not guaranteed. Final investment decisions should be made at your own judgment and responsibility.