Tokyo Stock Exchange and London Stock Exchange publish rulebook for public comment, name new growth market Tokyo AIM
The Tokyo Stock Exchange Group, Inc. (“TSE”) and the London Stock Exchange Group plc. (“London Stock Exchange”) today published the rulebook for their new growth market for public comment, and confirmed the market’s name: TOKYO AIM. The rulebook, which was developed following extensive discussion with market participants, sets out the regulations for securities on the market as well as the rules for Nominated Advisers (J-Nomads).
Established and operated as a joint venture between the TSE and London Stock Exchange, TOKYO AIM will provide a new funding option for growing companies in Japan and Asia, giving them access to a capital market specifically tailored for their needs and to a wider investor base, while creating new investment opportunities for Japanese and international professional investors. The creation of TOKYO AIM became possible following the revision of the Japanese Financial Instruments and Exchange Act passed in June 2008. It is anticipated that the launch of TOKYO AIM will take place in spring 2009 subject to the granting of a license by the Financial Services Agency of Japan.
Adopting the AIM regulatory framework, the J-Nomad system will be central to the regulation of TOKYO AIM. J-Nomads will be selected and approved by TOKYO AIM and will be required to assess companies’ suitability for the market both prior to admission and on an ongoing basis, guiding them in meeting their obligations as public companies. In addition to the support provided by the J-Nomad system, companies will also benefit from:
- a choice of either Japanese or English for the disclosure of information;
- the use of International Accounting Standards and US GAAP in addition to Japanese GAAP; and
- the potential to reduce costs as a result of a principles-based regulatory approach that does not demand compliance with J-SOX or the filing of quarterly accounts.
Atsushi Saito, President & CEO of the TSE, said: “We are delighted to be able to publish the rulebook for our new joint venture market, as well as to announce its official name: TOKYO AIM. Our strong partnership with the London Stock Exchange has enabled us to make steady progress towards the launch of TOKYO AIM. The new market will be a platform that attracts and connects companies and investors from around the world. The development of this new market structure in Tokyo is another step towards the further strengthening of Japan’s competitiveness in the global capital markets.”
Clara Furse, Chief Executive of the London Stock Exchange, said: “A stock exchange’s central purpose is to ensure that companies have access to capital to finance innovation, growth and employment. TOKYO AIM will play an important role in providing that funding for growing companies in the region. In particular, it will provide a suitable framework in which they can develop long-term relationships with professional investors, making it easier for them to gain access to capital throughout their development; an advantage that has been underlined in recent months as public companies in a number of markets have increasingly turned to equity markets to raise additional capital through further issues”.
To serve as a vehicle for the organisation and management of a growth market in Japan and related activities, TSE and the London Stock Exchange have formed a Japanese-incorporated company, held 51 per cent by TSE and 49 per cent by the London Stock Exchange. The London Stock Exchange has made an initial cash subscription of Yen 98.0 million (£728,100 on the date of subscription) for its interest in the company.
- Ends -
For further information, please contact:
Tokyo Stock Exchange Group, Inc.
Masahiro TAKADA, Media Relations: 81-3-3665-1220, firstname.lastname@example.org
London Stock Exchange plc
Catherine Mattison: + 44 (0)20 7797 1222
Comments on the TOKYO AIM rulebook should be sent to:
email@example.com by 27 February 2009
Further details on TOKYO AIM can be found at:
Notes to editors:
In February 2007 the TSE and LSE agreed to consider the opportunities for joint work: in the creation and promotion of new jointly traded products; in cross-access arrangements and in the operation and regulation of a market for growth companies.
About the Tokyo Stock Exchange Group, Inc.:
Tokyo Stock Exchange, Inc. is the premier exchange for Japanese cash equities and derivative products from the perspective of investors both in Japan and abroad. In 2008, TSE recorded an average daily trading volume of 2,267 million shares, and daily average trading value of JPY 2352.8 billion. This has positioned TSE as the central market of Japan.
In addition to its core Japanese equity market, the TSE provides markets for derivatives products such as long-term Japanese government bond futures and TOPIX index futures. Japanese Government Bond (JGB) futures trading, the cornerstone of the TSE’s fixed income derivatives market and the benchmark of the Japanese bond market, continues to thrive on investor demand from across the globe.
The JGB futures contract is one of the most active long-term interest rate futures contracts in the world, with its annual trading volume in 2008 reaching 10,639 thousand contracts. The TOPIX futures contract, which is actively traded by institutional investors, is the leading stock index futures product in Japan, with the largest open interest among Japanese stock index futures products. The annual trading volume of TOPIX Futures in 2008 was 18,375 thousand contracts.
With respect to these cash and derivative products, the TSE, as a self regulatory organization, continuously makes every effort to provide a fair, transparent, and efficient market.
For more information on the Tokyo Stock Exchange, go to: www.tse.or.jp/english/
Established in 1995, AIM is the London Stock Exchange’s international market specifically designed for smaller, growing companies. The market combines the benefits of a public flotation with appropriate levels of regulation – a principles-based regulatory approach together with high standards of disclosure – meeting the needs of international companies and investors. As of the end of December 2008, there were over 1,550 companies (of which 317 are non-UK) quoted on AIM with a combined market capitalisation of over £37.7 billion. AIM’s regulatory model has enabled its companies to achieve long-term investment; of the £60.2 billion raised by AIM companies in the 13 years since launch, £27.8 billion has been raised by companies subsequent to joining the market.
About Nominated Advisers (J-Nomads)
The J-Nomad system is based on the Nomad system, which is central to the regulatory structure of AIM.
Companies proposing to admit to TOKYO AIM will be required to engage a J-Nomad that is approved and monitored by the Exchange; the J-Nomad will have responsibility for assessing their suitability for a public market and advise them on the admission process. Once on TOKYO AIM, companies must retain a J-Nomad at all times, and the J-Nomad must ensure the company’s ongoing compliance with the TOKYO AIM rules, with particular regard to disclosure obligations.
Based on experience of AIM in the UK, it is expected that the close association between the Nomad and their client companies gives Nomads a powerful incentive to ensure that the companies they advise maintain high regulatory standards, in order to safeguard their own reputation and investors’ trust in their ability to bring quality companies to the market.