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April 2010

Update : May 10, 2010


April 2010

1. Financial Results for FY Ended March 2010

The breakdown of the financial results of Tokyo Stock Exchange Group, Inc. (TSE Group) for the fiscal year which ended March 2010 is as follows.

As stock trading value was down more than 20% from the same period of the previous year, trading participation fees were down 17% on a year-on-year basis, and securities settlement-related revenue was also down 31% from the previous year. On the other hand, due to an increase in listing-related fees, which was caused by a series of large-scale capital increases through public offerings by listed companies, listing-related revenue was significantly up by 64% from the previous year. As a result, operating revenue was down 9% versus the same period of the previous year, to JPY 60.6 billion.

Meanwhile, operating expenses were down 13% to JPY 45.8 billion from the previous year. While there was an increase in system-related depreciation costs, the decrease occurred as a result of a decrease in rent expenses as well as system maintenance and operating expenses.

As a result, operating profit during the quarter was up 4% to JPY 14.8 billion and ordinary profit was up 7% to JPY 17.4 billion versus the same period of the previous year. However, JPY 13.2 billion was recorded as an extraordinary loss after the Tokyo District Court ordered TSE Group to pay damages (including delinquency charges) in relation to the erroneous order placement incident in December 2005. Therefore, income before income taxes and minority interest was JPY 2.6 billion, but the net loss for the quarter was JPY 3.6 billion.

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2. Selection of Candidates for New Board Members, Executive Officers, etc.

TSE Group and Tokyo Stock Exchange, Inc. (TSE) have selected candidates for the positions of new board members, executive officers, etc., respectively, for the re-election which is scheduled for June 2010.

The board members of TSE Group and TSE will be selected at the general shareholders' meeting in June 2010. Executive officers of TSE Group and TSE are scheduled to be selected at the board of directors meeting after said shareholders' meeting, respectively.

3. Reviewing Timely Disclosure of Quarterly Financial Statements and Improvements to the Listing System based on Voluntary IFRS Adoption

TSE has decided to make the following two adjustments to the listing system based on proposals, etc. in the "Review of Timely Disclosure Related to Quarterly Financial Statements and Listing System Based on Voluntary IFRS Adoption" publicized by the disclosure panel of the Advisory Group on Improvements to the TSE Listing System on March 24, 2010.

First, as part of systematic and operational adjustments to timely disclosure, TSE will carry out reviews, etc. of its format to realize effective and efficient disclosure of quarterly financial statements. Specifically, TSE will minimize the framework that requires listed companies to conduct disclosure using a uniform format, enabling them to make appropriate disclosure flexibly based on their judgment in order to meet investor needs. Additionally, the Financial Services Agency permitted voluntary adoption of the International Financial Reporting Standards (IFRS) from the fiscal year ended March 2010. In response to this, TSE will make improvements to the listing system related to listed companies and initial listing applicants which voluntarily use IFRS.

Secondly, TSE will make necessary adjustments to the listing system to prevent abuse of power by controlling shareholders as part of improving conditions to enhance corporate governance of listed companies. For example, if a listed company conducts significant transactions with controlling shareholders, TSE will request the listed company to seek opinion from a third party who has no vested interests with the shareholders and implement a certain procedure to conduct sufficient timely disclosure.

The listing system improvements mentioned above are scheduled to be implemented by the end of June 2010 after soliciting public comments from April 27, 2010 to May 27, 2010.

4. Decision to Begin Considering the Migration of Futures Trading to Tdex+ System

TSE has decided to begin considering the migration of futures trading to the Tdex+ System.

Currently, TOPIX and JGB futures trading is conducted through the derivatives trading system that was launched in January 2008. However, in response to a strong need from market-related parties to improve order processing speed, TSE has decided to consider the migration of futures trading to Tdex+ System, an options trading platform based on LIFFE CONNECT®. With this system migration, TSE considers that order processing performance will be improved to 10 milliseconds, thus increasing market convenience significantly. Additionally, in conjunction with the launch of a new trading system, TSE plans to introduce a market maker scheme for futures trading to further enhance liquidity in the market.

TSE will proceed with the preparation to launch the system in the middle of 2011 after soliciting suggestions and comments from market-related parties.

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