The TSE, operated by Japan Exchange Group Inc, submitted an incident report to the FSA on Friday detailing what went wrong on Oct. 1, when trading was halted in the worst-ever outage for the world's third-largest equity market.
The FSA will soon begin the on-site probe, based on which it will decide what administrative actions to take against the bourse, the Nikkei business daily reported.
In response to a question about the media reports, finance minister Taro Aso told reporters he couldn't say anything about an on-site investigation at this stage, and without considering the regulator's examination of the incident report.
At a news conference on Monday, the TSE said it would draw up new rules by next March on how to restart trading following a system failure, and set up a committee to draft the new guidelines.
(Reporting by Chang-Ran Kim and Daniel Leussink; Editing by Lincoln Feast and Richard Pullin)