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September 2009

Update : Oct. 06, 2009


Listing System Improvement Action Plan 2009

The Tokyo Stock Exchange (TSE) has publicized the revisions to the listing system which are scheduled to be implemented in fiscal year 2009 in light of improving the listing system.

Since fiscal year 2007, the TSE has selected themes regarding the improvement and revision of the listing system to be addressed in the year, finalized concrete approaches for the consideration of matters for each theme, and publicized them as an action plan. Last year, the TSE announced the action plan in May with a central theme of the development of various systems aimed at enhancing the corporate governance of listed companies. As a result, the TSE introduced rules related to capital increase by third party allotment at the end of August 2009. In fiscal year 2009, the TSE will address the following two important themes to improve the listing system.

The first theme is "improving conditions to enhance the corporate governance of listed companies". This theme is classified into nine items, most of which are examined in the Study Group Report released by the Financial System Council of the Financial Services Agency and the Corporate Governance Study Group Report released by the Ministry of Economy, Trade and Industry. The TSE will work on concrete approaches in line with the ideas indicated in these reports.

The other theme is "improving the system and practices pertaining to timely disclosure in light of changes in the environment". In recent years, disclosure systems have been improved in accordance with laws, for example, quarterly reporting and the internal control report system for financial reports have been introduced in the Financial Instruments and Exchange Act. Under these circumstances, the TSE will look to simplify quarterly earnings digests to reduce the burden of administrative work for timely disclosure by listed companies. At the same time, the TSE will examine more desirable quarterly disclosure while considering trends in worldwide discussions. In connection with the introduction of the International Financial Reporting Standards (IFRS), listed companies in Japan will be able to voluntarily use IFRS from the fiscal year ending March 2010. The TSE will provide cooperation to related parties where necessary so that listed companies which voluntarily use IFRS will be able to smoothly adapt to business practices. In this regard, as the TSE handles issues requiring high levels of expertise such as IFRS, it will set up an independent expert working group, the "Sectional Committee on Corporate Disclosure", under the Advisory Group on Improvements to the TSE Listing System, and it will make deliberations until the end of this fiscal year. The sectional committee consists of 10 to 15 members. They will be knowledgeable persons and include those who prepare and use disclosure documents as well as study various disclosure-related systems. Professor Etsuro Kuronuma of Waseda University's Graduate School of Law is scheduled to chair the sectional committee.

The TSE will classify the above two themes into the following three categories: (1) matters for prompt implementation, (2) matters to consider for actual implementation, and (3) matters for continued consideration. The TSE will then look into concrete approaches for each theme.

For (1) matters for prompt implementation, the TSE will develop rules and frameworks and make requests to listed companies as soon as possible. With regard to (2) matters to consider for actual implementation, the TSE is scheduled to develop rules and frameworks and make requests to listed companies in spring next year. The TSE will request the Advisory Group on Improvements to the TSE Listing System to discuss the matters where necessary. In addition, for (3) matters for continued consideration, the TSE will identify fundamental issues in the mid to long term for continued discussion.

[For more information]

Listing System Improvement Action Plan 2009 PDF

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