Tokyo Stock Exchange Joins Forces With AMEX To List ETFs

by Caroline Maxwell, Investors Offshore.com

22 June 2001

The Tokyo Stock Exchange and the American Stock Exchange recently signed a memorandum of understanding on a strategic alliance for the cross listing and trading of US and Japanese Exchange Traded Funds. ETFs are indexed funds that trade throughout the day in the same way as individual stocks, and are designed to track the performance of an index or basket of stocks. AMEX first introduced ETFs in 1993, and there are now approximately 100 of the funds listed on the marketplace.

Initially, the TSE, Japan's largest exchange, is planning to list just 4 ETFs, according to the president and CEO, Masaaki Tsuchida. However, ultimately the exchanges hope to achieve seamless 24 hour cross listing and cross access to each other's products. Mr Tsuchida is confident that the alliance will prove a success: 'In today's era of diversification and globalisation of financial markets, our partnership will fulfill the needs of international investors and market participants,' he explained, adding 'We look forward to seeing that our ETFs market will go from strength to strength in both countries as well as on a global basis.'

However, in order to list AMEX listed ETFs on the domestic marketplace, the TSE must get regulatory approval from the state, and reform its computer systems. Until this has been achieved, the two organisations say that they will concentrate on joint investor education and marketing efforts.

This is the third overseas alliance in ETF trading for the American Stock Exchange; the Singapore Exchange started trading AMEX listed ETFs last month, and Euronext, the Brussels based exchange has said that it will start trading similar funds by the end of this year.

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