Update : Sep. 28, 2012


1. Significance of Listing

In general, a company whose stock is listed on a stock exchange (hereinafter a "listed company") is said to enjoy the following benefits:

(1) A listed company enhances its ability to raise funds by clearing the way for direct financing, including raising capital through a public offering issued at market price and/or the issuance of warrant bonds and other securities. By expanding its fund-raising ability, a company can improve and enhance its fundamental quality.

(2) Becoming a listed company leads to increased public awareness and status as a company with future potential, thereby improving corporate publicity while enhancing social trustworthiness with clients, financial institutions, and others. In addition, executives and employees alike grow to appreciate the company more, which is reflected in its business performance and allows it to secure highly capable manpower.

(3) By going public, the organizational structure of a company shifts from individual management to a more organizational style of operation, thereby enhancing the internal management framework.

While a listed company can enjoy the above advantages, it must also bear new social responsibilities and obligations such as being required to make earnings announcements and disclosing corporate information timely and appropriately.

2.Initial Listing

Companies applying for initial listing are required to meet certain numerical listing criteria. TSE conducts a rigorous examination of an applicant company using these criteria, with particular emphasis on whether or not fair price formation and appropriate market liquidity can be maintained and whether the public interest and protection of investors can be properly ensured.

TSE decides whether or not to approve the listing based on a comprehensive examination of these factors.

3. Assignment of Listed Stocks to Sections

Listed stocks are assigned to either the First Section or the Second Section. In addition, stocks of emerging companies are listed on another market called Mothers (Market of the High-Growth and Emerging stocks). Newly listed stocks (except for stocks listed on Mothers) are assigned to the Second Section except under certain conditions.

TSE examines whether or not companies whose stock is listed on the Second Section and are applying for listing on the First Section meet the relevant assignment criteria including trading volume. Second Section stocks that qualify are assigned to the First Section. Conversely, if First Section stocks fall under any of the reassignment criteria, TSE transfers them to the Second Section.

4. Supervision of Listed Companies

TSE has regulations for the appropriate supervision of listed securities. These standards require listed companies to give immediate notice to TSE of facts that may have a significant impact on investment decisions, such as suspension of bank accounts or business activities.

Companies are also required to file various documents with TSE on matters concerning shareholder rights, such as issuance of new shares.

TSE obliges listed companies to release certain facts it deems necessary for public disclosure to investors at an appropriate time and in an appropriate manner in order for TSE to properly supervise listing companies.

5. Delisting

If listed securities lose listing eligibility (for example, market liquidity of the securities has become too low to assure fair price formation or the company has gone bankrupt), they fall under the delisting criteria and are delisted accordingly.

If TSE discovers that listed securities may possibly fall under the delisting criteria, TSE designates them as a Security Under Supervision, and makes this designation known to the public.

If TSE decides to delist securities, TSE designates them as a Security to Be Delisted, and allows the securities to be traded for a certain period of time before delisting (in principle, 1 month).

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