There are four major lessons that can be learned from the development of the Japanese financial futures markets. First, although there were other formal reasons stated for the introduction of the financial futures markets in Japan, the crisis the OSE faced was one of the most crucial forces behind the new markets. Second, the success of the Nikkei 225 relative to the TOPIX futures was partly due to OSE`s opening of its memberships to a larger number of institutions. Third, lack of competition and international compatibility of the regulatory framework was the major impediment to the further development of the futures markets. Fourth, the unwarranted strengthening of regulation contributed to a decline of liquidity and a consequent migration of stock index futures trading to foreign exchanges such as SIMEX.