Standardization of Trading Units
Survey on Standardization of Trading Units (announced on Dec. 17, 2015)
TSE conducted a survey to ascertain the status of consideration, etc., regarding the transition of listed companies with 1,000-share units to 100-share units during the final stage of the "Action Plan for Standardization of Trading Units" (transition period for standardization of 100-share units).
Summary
- Regarding the status of consideration of the transition to 100-share unit, only about 20% of the companies stated that they are "considering the transition, including management," while more than 80% of the companies stated that they are "not considering the transition" or are "considering the transition at the working level.”
- The most common reason for not shifting to 100-share unit was that "no deadline has been set. The next most common reason was "Increased costs associated with an increase in the number of shareholders," which was selected by the majority of companies. (*Multiple selections were allowed.)
- A certain number of companies (more than 30%) will (or may) implement a reverse stock split at the same time as the transition to 100-share unit.
- Only about 10% of the companies have a timetable for the changeover, and about 90% of the companies are undecided at this point.
- Of the companies that are undecided, more than 70% expect to take less than two years to prepare for the transition.
- The main reason for the "more than two years" timeframe is that "time is required for internal adjustments, etc."
| Results of the "Survey on Standardization of Trading Units“ (announced on Dec. 17, 2015) (in Japanese only) |
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Survey on Standardization of Trading Units (announced on Feb. 4, 2011)
In line with the policy set forth in the "Action Plan for Standardization of Trading Units" jointly released by stock exchanges in Japan on November 27, 2007, TSE conducted a survey to ascertain the status of listed companies' efforts to consolidate trading units after the dematerialization of stock certificates. The purpose of the survey is to ascertain stable operations, costs, procedures, etc., after the dematerialization of share certificates in order to determine the end of the transition period (Phase II) for consolidating trading units to 100 shares and 1,000 shares, and to determine how the transition should be implemented.
Summary
- In deciding when to implement a unit change, some respondents said that they consider "the company's stock price level" and "costs associated with the unit change," among other factors.
- The percentage of listed companies that implemented a unit change within a one-year preparation period reached 91.7%, and the average cost of implementing a unit change was 1.7 million yen.
- As for the initial cost at the time of implementation of the unit change, the actual cost for the companies that have already implemented the unit change was lower than the estimate by the companies that have not yet implemented the unit change. Specifically, the average estimated cost for the non-implementing companies was 6.85 million yen, while the actual average cost was 1.7 million yen.
- As for running costs after the unit change, while the average estimate for companies that had not yet implemented the unit change was 3.18 million yen, 30 companies (57.7% of the responding companies) said that there was no particular increase in running costs after the unit change.
- Regarding the effect of the change in the size of share unit, some of the listed companies that effectively reduced the size of trading lots as a result of the implementation of the change in the size of share unit reported positive reactions from investors and increased liquidity such as trading volume, while many of the listed companies that did not effectively reduce the size of trading lots reported no particular effect.
- In the free text field, there were opinions that it is necessary for exchanges to fix the end date of the action plan, including making it mandatory, in order to realize the standardization, and opinions requesting explanations on the procedures necessary for the change of trading units, etc.
Results of “Survey on Standardization of Trading Units”
(announced on Feb. 4, 2011) (in Japanese only) |
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