Update : Nov. 01, 2001
The Tokyo Stock Exchange is a stock corporation that provides an Exchange Securities Market under authorisation of the Prime Minister.
The Tokyo Stock Exchange was formerly a membership organisation. However, a revision of the Securities and Exchange Law allowed a stock exchange to transform its organisational structure into a stock corporation so, on November 1st 2001, the Stock Exchange became a stock corporation.
The management of the Exchange Securities Market is required to be a highly public matter. Therefore, the management aims are stipulated in the Tokyo Stock Exchange's constitution as, "In order to contribute towards the protection of the public interest and investors, the trading of securities must be carried out in a fair and efficient manner." It is also clearly stated in the constitution that the TSE shall continue to maintain a high level of publicity concerning its management, even after the transformation into a stock corporation.
TSE is a central institution in the secondary market and its major functions are as follows.
1. Provision of a Market Place
Trading which takes place on the Tokyo Stock Exchange progresses continuously throughout each trading session using computerised trading systems, in compliance with Exchange rules. Transaction prices are available to the public.
2. Monitoring trading
Real-time trading on the computer trading systems as well as completed transactions are carefully monitored in order to keep trading in line with Exchange rules and properly determine prices. Upon discovery of any rule violation, improper conduct or unfair trading, appropriate measures are taken.
3. Listing securities
Securities which are traded on TSE adhere to listing criteria established and approved by the TSE.
4. Monitoring listed securities
TSE continuously monitors listed companies and securities in order to maintain high listing standards. TSE can suspend the trading of, or delist, a security if listing criteria are not met.
In order to ensure investor protection and fair and transparent transactions, TSE requires the accurate, swift, and fair disclosure of corporate and security information. Rules relating to the disclosure of corporate information are stated in the Securities and Exchange Law.
TSE maintains guidelines for the timely disclosure of important corporate information resulting from business activities. The TSE also provides a filing system which facilitates investor access to disclosure documents.
5. Supervision of Trading Participants
Trading participants are those who conduct transactions on the TSE market. In order to guarantee the safety of transactions and to fulfil to the utmost the public purpose of the TSE, they must maintain a high level of quality and a deep sense of confidence. In order to achieve this, an examination system is being introduced at the Exchange whereby strict investigations are carried out to assess the state of prospective participants' businesses and assets at the time of their application for trading permission.