Enforcement Measures

In the following cases, when it is deemed that there is a high necessity to improve the internal management systems of a listed company, TSE shall designate the listed stock, etc. issued by such listed company as a "Security on Alert".

 

■Where TSE deems that a listed company does not fall under the following delisting criteria after having deemed that it is likely that such company does so qualify.

Securities Listing Regulations, Rule 601, Paragraph 1, Item 9-2 Damage to sound transactions with controlling shareholder
Securities Listing Regulations, Rule 601, Paragraph 1, Item 12 Breach of listing agreement, etc.
Securities Listing Regulations, Rule 601, Paragraph 1, Item 19 Involvement of anti-social forces
Securities Listing Regulations, Rule 601, Paragraph 1, Item 20 The public interest or investors protection
 

■Where a listed company falls under any of the following.

[False Statement]
Where a listed company has made a false statement in its securities report, etc.

[Adverse Opinion, etc.]
Where the audit report attached to financial statements, etc. contains "adverse opinion" or "opinions are not expressed“* of a certified public accountant, etc.

  • Excluding cases caused by an event which is not attributable to the listed company including an act of providence
 

■Where the Exchange deems a listed company has breached the provisions of timely disclosure of corporate information

■Where the Exchange deems a listed company has breached the provisions of matters to be observed in the code of corporate conduct

■Where the Exchange deems it will not recognize improvement in the execution of improvement measures and operating conditions in a listed company which has submitted an improvement report relevant to timely disclosure of corporate information / code of corporate conduct.

 

A listed company which is the issuer of a listed stock designated as a Security on Alert is required to submit "Written Confirmation of Internal Management System" after one year from the designation.

TSE shall conduct examinations based on the contents of such confirmation submitted by the listed company. In cases where TSE does not deem there is a problem with internal management systems, etc., it shall remove such designation. However, in cases where the listed company does not promptly submit written confirmation of internal management systems, or in cases where TSE deems the contents of such confirmation is clearly inadequate, it shall handle such case as inadequate internal management systems, etc.

[Securities Listing Regulations, Rule 501]

 

Furthermore, in cases of a listed company's stock designated as a security on alert falls under any of the following items, it shall be delisted.

  • Where TSE deems that the internal management system, etc. was not improved within 1 year after designation. [limited to cases where TSE deems that the internal management system, etc. is not expected to be improved]
  • Where TSE deems that the internal management system, etc. was not improved within 18 months after designation.
  • Other than above, where TSE deems that the internal management system, etc. of a listed company's stock designated as a security on alert is no longer likely to be improved.

[Securities Listing Regulations, Rule 601 paragraph 1, Item 11-2 ]