Criteria for Delisting

Criteria for Delisting Pertaining to Loss of Actual Sustainability Due to Merger, etc.

Update : Aug. 31, 2006

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The purpose of "Criteria for Delisting Pertaining to Loss of Actual Sustainability Due to Merger, etc." is to prevent so-called "backdoor listing." A listed company will be delisted if, as a result of merger, etc. with an unlisted company, the listed company is deemed to not be able to continue and does not pass examination according to new listing examination criteria within a specified period of time.

  1. Examination of actual sustainability

    When a listed company announces a merger, etc., TSE conducts an examination on whether or not the company can be deemed to maintain actual sustainability.

  2. If TSE determines that actual sustainability is lost : company is anticipated to enter the grace period.

    If TSE concludes that the listed company is not actually continuing, TSE advises investors that the company may possibly enter the 'grace period for examination according to new listing examination criteria' from the point of implementation of the merger, etc.

  3. Implementation of merger, etc. : company enters the grace period

    TSE advises investors that the company has entered the 'grace period for examination according to new listing examination criteria' at the point of implementation of the merger, etc.
    • "Point of implementation of the merger, etc." efers to the merger date in the case of merger, the transfer date in the case of business transfer, and the alliance date in the case of business alliance.
    • The time limit of the grace period is three years from the last day of the business year in which the merger, etc. takes place (however, if the final day of the grace period does not fall on the last day of the business year, the time limit ends on the last day of the previous business year.)

  4. If company passes examination according to new listing examination criteria during the grace period :removal from grace period

    TSE removes the company from the grace period and makes the action known to investors.

  5. If company fails to pass the examination according to new listing examination criteria by the end of the grace period :company is assigned to the supervision post.

    If examination according to new listing examination criteria is not concluded by the time the grace period expires, TSE assigns the company to the supervision post the following day and makes this known to investors.

  6. On the 8th day after submission of securities report following expiration of the grace period

    If the listed company does not apply for examination according to new listing examination criteria by the 8th day from when the securities report is first submitted after the expiration of the grace period, TSE assigns the company's shares to the delisting post as an issue that falls under delisting criteria, and makes this fact known to investors.

    However, if at this time the examination according to new listing examination criteria is still ongoing, the issue will continue to trade on the supervision post. Naturally, as soon as the examination is completed, TSE either returns the issue to normal trading (if the company passes) or decides to delist the company, and assigns it to the delisting post (if the company does not pass).

For details, please refer to "Criteria for Delisting".

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