TSE And LSE Outline Framework For New Growth Market

by Robert Lee, Tax-News.com, London

29 July 2008

The London Stock Exchange Group plc (LSE) and the Tokyo Stock Exchange Group, Inc. (TSE) on Tuesday published an outline framework for their new Tokyo-based market for growing companies.

The proposed market structure has been developed following extensive discussion with market participants, and will take advantage of the opportunity created by the revised Financial Instruments and Exchange Act passed in June 2008, which enables the establishment of Exchange-regulated markets.

The new market structure will be based on the London Stock Exchange’s successful AIM market, which is underpinned by a regulatory framework specifically designed to suit the needs of smaller, growing companies, and by the key role played by Nominated Advisers (Nomads) in assisting issuers with meeting their obligations as public companies.

It is anticipated that the new market will address the funding gap faced by growing companies in Japan and elsewhere in Asia, while providing new opportunities for a range of Japanese and international professional investors.

Atsushi Saito, President & CEO of the TSE, explained that:

“Creating a market for professionals is an important step forward in internationalizing Japan’s financial markets. Through immense efforts by all parties involved, a required amendment in the Act has been passed and we have made substantial progress in developing the new market."

"Adopting the Nomad system, a highly effective and proven structure used in operating the AIM market in the UK, will be an innovation in Japan. I firmly believe that it will serve as a major driver for the development of Japan’s securities markets as a whole."

"In partnership with the London Stock Exchange, we hope to build a dynamic risk equity market in Japan, on which companies aiming to raise capital can work together with professional investors, to develop a most successful growth market in Asia.”

Clara Furse, Chief Executive of the London Stock Exchange, added:

“Creating a market that will contribute to the growth of the world’s second largest economy and equity market is an immensely exciting opportunity. We have been making very good progress, building a strong partnership with both the Tokyo Stock Exchange and the Tokyo financial community to help unlock the potential of growth companies in Japan and beyond.”

The new market will draw on the LSE’s experience and expertise as the creator and operator of AIM, the world’s leading market for growing companies, and on the TSE’s expertise and strong infrastructure in the Japanese market.

The new market will be a joint venture in which the London Stock Exchange and TSE are equal partners, and permission to establish the market will be applied for as soon as possible following the implementation of the revised Financial Instruments and Exchange Act, with the aim of starting full operation of the market in early 2009.

Recommended