Establishment Of A Stock Market Section For Emerging Companies On The Tokyo Stock Exchange (Proposal)- Mothers (Market For The High-Growth And Emerging Stocks)

In order to revitalize the Japanese economy, it is essential to promote new industries that will play a major role for the coming generation. Adequate funds need to be allocated to such emerging companies through appropriate functioning of the securities market. The Tokyo Stock Exchange (TSE), as the primary market in Japan, is launching a new stock market section called Mothers (Market for the High-growth and Emerging Stocks), through which emerging companies can raise funds in a flexible manner using the well-established market facilities of the TSE. The concept underlying this new market is different from those of existing market sections in terms of the following aspects: The aim is to target emerging companies; entrepreneurial companies, in-house venture companies, electronic communications or multimedia companies, etc. Instead of requiring a history of financial results and a minimum number of years since incorporation, clear operational plans will be requested. The total time period necessary for listing will be shortened, with the emphasis on disclosure rather than strict examination. Quarterly reports and other I.R. activities will be required in addition to regular timely disclosures to insure transparency in the new market. Emphasis will be placed on investor self-responsibility as the "Mothers" has a different concept than the existing TSE markets. It will allow investors the opportunity to invest in high-growth companies from an earlier stage. The TSE will actively foster and /or improve this new market, so that it can be regarded as a market equally positioned with the existing markets of the TSE, and competitively or better positioned than other currently existing markets and other potential new markets. The TSE hopes that the launch of the "Mothers" will help contribute to the revitalization of the Japanese securities market and economy.