Update : Jul. 30, 2010
The following is a breakdown of the 1st quarter financial results (April 1, 2010 to June 30, 2010) of Tokyo Stock Exchange Group, Inc. (TSE Group) for the fiscal year ending March 2011.
Trading participation fees were down 4.7% from the same period of the previous year due to an approximately 3% decrease in stock trading value from the previous year. Listing fees were down 18.5% from the previous year. This was attributable to the fact that the amount of fund raising through public offerings, etc. by listed companies decreased more than 60% from the previous year when a series of large-scale capital increases through public offerings were conducted by listed companies, such as Sumitomo Mitsui Financial Group, Inc. and TOSHIBA CORPORATION. Income from securities settlement was down 12.2% from the previous year. In addition to a decrease in trading value, this was caused by the fact that Japan Securities Settlement & Custody, Inc., a TSE Group subsidiary, was completely liquidated as of March 31, 2010, and the revenue was not recorded. On the other hand, income from information services was up 2.7% from the previous year due to an increase in the number of real-time individual terminals. Other operating income was up 19% from the previous year due to an increase in usage fees of co-location service. As a result, overall operating revenues were down 4.6% to JPY14.3 billion from the previous year.
On the other hand, operating expenses were down 4.4% to JPY10.8 billion from the previous year. While there was an increase in depreciation costs in connection with the launch of arrowhead, labor costs and system maintenance/operating costs decreased.
As a result, operating profit during the quarter was down 5% to JPY 3.41 billion from the previous year. Ordinary profit adjusted by the receipt of dividend income from the Singapore Exchange Limited, etc. was down 3.5% to JPY 3.94 billion from the previous year. With approximately JPY900 million of extraordinary profits generated during the same quarter of the last year, net income for this quarter was down 19% to JPY 2.42 billion from the previous year.
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Tokyo Stock Exchange, Inc. (TSE) decided to release the "Discussion Paper Regarding the Extension of Trading Hours" with the purpose of reassessing market participants' needs and practical issues relating to the extension of trading hours and proceeding with deliberations in the future.
For trading hours, market users have pointed out that TSE's trading hours are shorter than those of major exchanges in the US and Europe and requested trading during the noon recess. Regarding the extension of trading hours, there are comments citing the benefits of increased trading opportunities from the perspective of market user convenience. Meanwhile, there are also opinions that market users' trading practices would need to be greatly altered depending on methods of extension, as market users' practices are established based on the current trading hours. Thus, the extension of trading hours would increase overall costs and possibly decrease efficiency.
In light of these comments and opinions, TSE considers it appropriate to maintain an awareness of market users' opinions and implement necessary measures promptly after comparing the needs and costs of the market overall.
TSE has presented the following four measures as the primary issues in the discussion paper: (1) Abolishment or Shortening of Noon Recess, (2) Introduction of Evening/Night Trading Session for the Cash Equities Market, (3) Extension of the Evening Session Hours for the Derivatives Market, and (4) Moving Up the Opening of the Morning Auction Session.
TSE posted the discussion paper on the TSE website on July 26, 2010. TSE will seek public comments from a wide variety of market users including trading participants, institutional investors, listed companies, and individual investors by September 10, 2010.
The specific measures related to the extension of trading hours presented in this discussion paper do not necessarily represent the current opinions and plans of TSE. TSE has prepared the discussion paper in order to reassess market users' needs, practical issues, etc. and proceed with deliberations in the future.
As the extension of trading hours may affect a wide variety of market-related parties, TSE will deliberate on their needs, practical issues, etc. If TSE decides to implement the trading extension, it will fix the details of the alteration, draw up the outline of rules and systems, and publicize it.
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