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December 2004

Update : Jan. 26, 2005


Selection of lead managing securities companies

TSE began accepting applications for its lead managing securities companies on October 26. After a careful review of all applications, it was announced at the Board of Directors Meeting on December 21 that Daiwa Securities Group, Inc., Nikko Citigroup Limited, and Nomura Securities Co., Ltd. were chosen as lead managing securities companies.

Because transparency, impartiality, and fairness were essential in this matter, quantitative factors such as past performance as well as quantitative factors such as proposals for the public offering were assigned points, and selection was made based upon overall scores.


Changes to securities regulations to heighten trust of corporate information

These changes are based on the outline titled "Changes to securities regulations to heighten trust of corporate information" released on November 16.

Additionally, based on opinions received during our public comment period, we have decided to alter two points of the outline previously released. The first of these points is the written oath regarding timely disclosure. In order to prevent the oath from being a simple formality and to enable investors to understand how listed companies are tackling timely disclosure, listed companies will be required to attach documents detailing company framework related to timely disclosure. Companies will also agree to make sincere efforts to enhance company structure and procedures in their stance toward timely disclosure to investors. The second point is the written confirmation of the adequacy of financial reports. As with the written oath, in order to prevent this confirmation from being a simple formality and to enable investors to understand how heads of companies concluded that the reports include no false information, companies will be required to submit a document detailing the process and reasons that heads of companies used to arrive at that conclusion.

These changes will be implemented January 1.


Extension of period that timely disclosure information is available for browsing on TSE homepage

Since February 2004 TSE has made corporate action information posted on TDNet is available for browsing in real-time on the TSE homepage.

This information became available as a result of a public measure in insider trading regulations. This measure took the place of the established "12 Hour Rule" and newly required that such information be on the homepages of self-regulatory organizations. TSE uses the browsing service to offer information disclosed on TDNet to a broad range of investors in a prompt manner.

Up until now such information on the TSE website was available for seven days. However, to improve service to investors, we have decided to extend this period to 30 days (including the day of release).

Additionally, with the aim of making the homepage easy to use for investors, part of the way in which the information is displayed will be upgraded.

This extension is scheduled to begin in late January.


Introduction of compliance program at TSE

As part of TSE's measures to expand its corporate governance function, TSE will introduce a compliance program on January 1, 2005 . This program a method to ensure proper management by raising employee awareness of regulations related to TSE's business activities and compliance with company rules as well as allowing effective internal control.

There are three main pillars to this compliance program.

The first is the establishment of a charter of corporate behavior. TSE implemented this out of its determination to aim to be an open company that declares both inside and outside the company its fundamental policies of behavior as a corporation as well as clearly outlines its stance of emphasizing the viewpoint of investors.

The second pillar of the program is the development of company infrastructure. The two parts of this infrastructure are the appointment of President Tsurushima as the official responsible for compliance, and the establishment of a compliance hotline to handle reports and inquiries.

Education and training comprise the third pillar of the program. Concretely speaking, in order to maintain a high awareness of compliance among TSE employees, TSE will take such measures such as holding regular employee training programs, following up on the usage of the compliance hotline, appointing a person in each department responsible for compliance, and hold other programs to raise compliance awareness within each department.

The charter of corporate behavior will not end with implementation, but rather will be adapted regularly to meet the demands of changes in social conditions and eras.


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