JASDAQ, the OTC stock market for startup companies operated by the Japan Securities Dealers Association (JSDA), has filed a request with the local regulator, the Financial Services Agency (FSA), to become an official stock exchange.
JASDAQ hopes to start operations in its new guise as soon as December this year – 13 December 2004, to be precise – after a two-month screening process. It will be the first time in 55 years that a new stock exchange has been established in Japan. The last was the Sapporo Stock Exchange, which was set up in 1949.
But what will it mean? “Trading methods that have not been allowed for JASDAQ as OTC market, such as off-hours trading, futures trading, and derivatives trading, will be available,” says a spokesman for Bank of Tokyo Mitsubishi in Tokyo. “The new stock exchange is also expected to increase convenience of investors; for example, investors will be able to avoid fluctuation of prices, and liquidity of the market is also expected to be increased.”
Conversion to a stock exchange also means the operator of the JASDAQ market will cease to be the Japan Securities Dealers Association, and become the Jasdaq stock exchange. “For procedures for listing approval, the stock exchange will directly screen companies for listing approval instead of a securities company acting as a lead manager, which is currently examining listing candidates,” says the BTM spokesman.
If and when JASDAQ becomes an exchange, it will be the largest stock exchange for start-up companies in Japan, with 930 listed companies.