The Yomiuri Shimbun
Japan Exchange Group, Inc. (JPX), which has the Tokyo Stock Exchange, Inc. under its umbrella, will consider integrating the TSE’s Mothers (see below) and Jasdaq (see below) markets for start-up companies, The Yomiuri Shimbun has learned.
The aim would be for the integrated market to be recognized as Japan’s leading market for start-up companies and to invigorate the new market by making it easier to bring in investors’ funds and companies to be listed, sources said.
If Mothers and Jasdaq are integrated, a market with about 1,000 listed companies and about ¥16 trillion in market capitalization of stocks in total would be created. In terms of the number of listed companies and other factors, the integrated market would be comparable to Britain’s AIM market for start-up companies, which is a leading market of this kind in the world.
From mid-2018, JPX plans to devise a new mid-term business plan to map out its prospects for three years. In doing so, JPX will work on the market reorganization plan in earnest, the sources said.
JPX has started taking steps toward the reorganization of markets for start-ups, as it unified in September 2016 the amount of fees paid by securities companies brokering stock transactions, which had differed for Mothers and Jasdaq.
Currently, domestic individual investors account for about 70 percent of the trading values of Mothers and Jasdaq, while overseas investors only account for less than 30 percent. If the integration increases the scale of the market, its name recognition will be enhanced, attracting overseas funds. It is also expected that there will be more opportunities for start-up ventures and others to consider being listed.
Regarding the restructuring of securities markets, after JPX was established with the management integration of the TSE and Osaka Securities Exchange in January 2013, spot trading and derivatives trading have been consolidated in the Tokyo and Osaka markets, respectively. But since Mothers and Jasdaq have existed under the TSE, it has been pointed out that such a system is not easy to understand for companies aiming to be listed, as well as investors.
These two markets have different criteria on such things as total market capitalization required for being listed and the amount of annual fees paid to the exchange market. These matters will need to be coordinated toward the integration, the sources said.
Established by the TSE in 1999. There were 248 listed companies, including Lifenet Insurance Co. and Money Forward, Inc., which offers household accounting app services, as of the end of 2017. Market capitalization totals about ¥5 trillion. There are many growth-oriented companies in information technology and biotech industries. Even if recurring profits are in the red, companies can be listed in some cases. The number of listed companies has been sharply rising in recent years.
Originated in the over-the-counter registration system set up by the Japan Securities Dealers Association in 1963. It has 749 listed companies, including McDonald’s Holdings Co. (Japan) and snack food maker Koike-Ya Inc. Total market capitalization stands at about ¥11 trillion. Listed companies in the past included Rakuten Inc. and Yahoo Japan Corp., which are now listed on the TSE’s First Section.