(Reuters) - A Tokyo Stock Exchange employee is currently under investigation by the country's financial watchdog for suspected insider trading, the Nikkei reported on Wednesday, citing sources.

The Securities and Exchange Surveillance Commission is investigating the employee, who allegedly bought and sold stocks based on undisclosed corporate information, according to Nikkei sources.

The probe began around September.

According to the report, both the watchdog and Japan Exchange Regulation, which oversees certain operations for the TSE under the Japan Exchange Group ( OSCUF ), were aware of the transactions. The Japan Exchange Group ( OSCUF ) is the holding company for the TSE.

Insider trading violates Japan's Financial Instruments and Exchange Act. Offenders face up to five years in prison, a fine of up to 5 million yen ($33,097), or both.

The Japan Exchange Group ( OSCUF ) could not immediately be reached for a request for a comment.

($1 = 151.0700 yen)