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Listing

In order for a venture fund to be listed, the details of the issue and other matters of the venture fund must conform to the listing examination standards set forth in the Securities Listing Regulations (Venture Funds).

In addition, the standards for the issuer of the venture fund and the asset management company must be appropriate from the perspective of the asset management system, compliance and timely disclosure systems, and must be a member of the Investment Trusts Association, Japan. The standards also require that the issuer or asset management company of the venture fund be a member of The Investment Trusts Association, Japan, and that it be in a position to properly evaluate private equity and private equity-related assets under management, etc.

The specific listing criteria are as follows:

Attributes of Asset Management Company

Item Criteria Details
Appropriateness of Asset Management Company An asset management company entrusted with business pertaining to management of the assets of an investment corporation is a member of the Investment Trusts Association, Japan.
Transfer Agent An administrator of the investor register is approved by the Exchange as an organization as specified by the Enforcement Rules

Details of Assets Under Management, etc.

Item Criteria Details
Ratio of Unlisted Stocks, etc. Investment Amount to Assets Under Management, etc. Expected to reach 70% or higher
Ratio of Specified Unlisted Stocks, etc. Investment Amount to Unlisted Stocks, etc. Investment Amount Expected to reach 50% or higher
Assets Other Than Unlisted Stocks, Unlisted Stocks-Related Assets, Stocks Within Five (5) Years After Listing, Continuously Held Stocks, Within Five (5) Years After Listing or Continuously Held Stocks, for Which Five (5) Years Have Passed Assets other than unlisted stocks, etc., unlisted stocks, etc.-related assets, stocks, etc. within five (5) years after listing, continuously held stocks, etc. within five (5) years after listing or continuously held stocks, etc. for which five (5) years have passed shall be for the purpose of reducing risks, such as losses due to price fluctuations pertaining to current assets, etc. and assets under management, etc., and those assets are limited to rights and other assets pertaining to transactions for which such reduction in such losses and other risks is objectively recognized;

Definitions of Terms

Category Details
Assets under management, etc.
（Rule 1201, Item (1)-7　of the Listing Regulations）		 The assets of the investment corporation that is the issuer of the investment security.
Unlisted Stocks, Investment Amount
（Rule 1305, Item (2), Sub-Item a of the Listing Regulation, Rule 1305 Paragraph 2 of the Enforcement Rules. ）		 A total of (i) an amount of unlisted stocks, etc., stocks, etc. within five (5) years after listing, continuously held stocks, etc. within five (5) years after listing and continuously held stocks, etc. for which five (5) years have passed after listing (hereinafter referred to as "unlisted stocks, etc.-related securities") and, (ii) out of unlisted stocks, etc.-related assets, an amount corresponding to unlisted stocks, etc.-related securities.,
Specified Unlisted Stocks Investment amount
（Rule 1305, Item (2), Sub-item a of the Listing Regulation, Rule 1305 Paragraph 2 of the Enforcement Rules. ）		 The total of (i) unlisted stocks, etc. and continuously held stocks, etc. within five (5) years after listing (hereinafter referred to as the "specified unlisted stocks, etc.-related securities") and (ii) out of unlisted stocks, etc.-related assets, an amount corresponding to the specified unlisted stocks, etc.-related securities.
Unlisted Stocks
（Rule 1201, Item (15)　of the Listing Regulations）		 Unlisted stocks mean domestic stocks other than stocks listed on a domestic financial instruments exchange (excluding that issued by a company listed on the specified financial instruments exchange markets), or stocks listed or continuously traded on a foreign financial instruments exchange, etc.;
Unlisted Stocks
（Rule 1201, Item (16)　of the Listing Regulations）		 Unlisted stocks, or preferred stocks, etc., subscription warrant securities, or bonds with warrants issued by an issuer of unlisted stocks
Unlisted Stocks, etc.-related assets
（Rule 1201, Item (17)　of the Listing Regulations）		 Assets referred to in the following a. through e.
  1. Equity interest in investment pertaining to an agreement in which one of the parties to the agreement contributes funds to be managed by the other party for investment primarily in unlisted stocks, etc., in which the other party manages the funds invested for investment primarily in unlisted stocks, etc., and in which the profit arising from such management is distributed;
  2. Equity interest in contribution related to a limited partnership agreement for investment prescribed in Article 3 of the LPS Act (limited to those where contributors jointly invest for the purpose of acquiring and holding unlisted stocks, etc., and such contributed assets are managed for investment primarily in unlisted stocks, etc.);
  3. Beneficiary certificates (limited to those for which investment trust assets of an investment trust are managed for investment primarily in unlisted stocks, etc.)
  4. Investment securities (limited to those for which assets held by an investment corporation for the purpose of management are managed for investment primarily in unlisted stocks, etc.);
  5. Rights based on foreign laws and regulations or securities issued by a foreign entity which have the nature of rights or securities referred to in the above a. through d.
Stocks Within Five (5) Years After Listing
（Rule 1201, Item (6), Sub-item a　and b of the Listing Regulations）		 Those referred to in the following a.and b.
  1. Among stocks acquired after becoming listed on a domestic financial instruments exchange (excluding that issued by a company listed on the specified financial instruments exchange markets), or becoming listed or continuously traded on a foreign financial instruments exchange, etc., domestic stocks for which five (5) years have not passed since becoming listed or continuously traded (excluding the same issue as the domestic stock referred to in the following a.);
  2. Preferred stocks, etc., subscription warrant securities, or corporate bonds with subscription warrants (excluding Continuously held stocks, etc. within five (5) years after listing) issued by the issuer of the stock referred to in the above a.
Continuously Held Stocks Within Five (5) Years after listing
（Rule 1201, Item (6)-2, Sub-item a　and b of the Listing Regulations）		 Those referred to in the following a. and b.
  1. Among stocks that have been continuously held before becoming listed on a domestic financial instruments exchange (excluding that issued by a company listed on the specified financial instruments exchange markets), or becoming listed or continuously traded on a foreign financial instruments exchange, etc., those domestic stocks for which five (5) years have not passed since becoming listed or continuously traded; and
  2. Preferred stocks, etc., subscription warrant securities and corporate bonds with subscription warrants issued by an issuer of the stocks referred to in the preceding a.
Continuously Held Stocks for Which Five (5) Years Have Passed After Listing
（Rule 1201, Item (6)-3, Sub-item a　and b of the Listing Regulations）		 Those referred to in the following a. and b.
  1. Among stocks that have been continuously held before becoming listed on a domestic financial instruments exchange (excluding that issued by a company listed on the specified financial instruments exchange markets), or becoming listed or continuously traded on a foreign financial instruments exchange, etc., those domestic stocks for which five (5) years have passed since becoming listed or continuously traded; and
  2. Preferred stocks, etc., subscription warrant securities and corporate bonds with subscription warrants issued by an issuer of the stocks referred to in the preceding a.

Financial Details

Item Criteria Details
Total Net Assets Expected to reach 3 billion yen or more by the time of listing
Auditor Opinion The following (a) and (b) are satisfied:

(a) No false statement shall be made in the annual securities reports, etc. which contain or make reference to financial statements, etc. for each business period ended in the last two (2) years (limited to the period after the venture fund-issuing investment corporation pertaining to such initial listing application was established; the same shall apply hereunder) or interim financial statements, etc. for each such business period;

(b) An audit report attached to financial statements, etc. for each business period ended within the last two (2) years or an interim audit report attached to interim financial statements, etc. for a business period ended in the last year shall contain an "unqualified opinion" or a "qualified opinion with exceptions," or an "opinion that the interim financial statements, etc. provide useful information" or a "qualified opinion with exceptions" by certified public accountants, etc.; provided, however, that the same shall not apply to the cases where the Enforcement Rules specify otherwise;

Venture Funds Ownership Conditions

Item Criteria Details
Listed Investment Units Expected to reach 2,000 or more by the time of listing
Major Investors (meaning the top ten (10)
Investors in Descending Order of Investment Units Held）		 The total number of investment units held by major investors shall be expected to be 80% or less of the total number of listed investment units by the time of listing;
Number of Investors Excluding the Major Investors The number of investors holding one (1) or more investment unit, excluding major investors, shall be expected to reach 300 or more by the time of listing;

Management System and Structure, etc.

Item Criteria Details
Appropriateness of Valuation of Unlisted Stocks Rating of unlisted stocks, etc. and unlisted stocks, etc.-related assets which are assets under management, etc. can be carried out in an appropriate manner.
  1. The valuation of unlisted stocks, etc. which are managed assets and other assets　related to unlisted stocks, etc. is entrusted to a rating agency for unlisted　stocks, etc.
  2. The rating agency for unlisted stocks, etc. prescribed in the preceding item is　deemed to be in a state where its independence is ensured from the applicant for initial listing of the venture fund, in comprehensive consideration of capital,　human, transactional and other relationships.
  3. The rating agency for unlisted stocks, etc. prescribed in Item (1) is deemed to be in a state where its internal structure allows it to appropriately conduct valuation in light of the matters referred to in the following a. through c.:
    1. As a general rule, it has been established as a rating agency for at least three (3) years by the end of the business period immediately prior to the initial listing application date, has a suitable financial basis, and has a record of stable profits;
    2. The rating agency has secured the necessary staff to conduct work pertaining to issuing ratings; and
    3. The rating agency has a record of issuing ratings.
Appropriateness of Disclosure A venture fund initial listing applicant is in a state where disclosure of information　concerning such venture fund can be carried out in an appropriate manner.
  1. Documents pertaining to disclosure of information concerning venture funds, out of the initial listing application documents, shall appropriately contain matters which may have a material impact on investment decisions of investors; and
  2. An entity who has applied for initial listing of a venture fund shall have a system to conduct timely and appropriate disclosure of information of facts, etc. which will have a material impact on asset management, etc.
Financial Soundness of Asset Management The initial listing applicant must be in a position to manage its assets in a sound manner.
  1. The applicant for listing of a new venture fund must have an appropriate system in place to ensure that the management of assets, etc. does not harm the interests of investors of the issue for which the new venture fund is applying for listing.
  2. The initial listing applicant for the venture fund is not considered to have unfairly provided or received benefits through trading activities or other management of assets with the corporate group of the sponsor, as listed in a) and b) below:
    1. The initial listing applicant for the venture fund is not considered to have unfairly provided or received benefits through trading activities or other management of assets with the corporate group of the sponsor, as listed in a) and b) below:
    2. There is no situation in which the interests of investors of the newly listed stocks are unreasonably impaired due to the sponsor's corporate group giving priority to its own interests.
  3. In order for the initial listing applicant of the venture fund to effectively manage its assets, its internal management system must be found to be reasonably well-developed and appropriately operated, as in a) and b) below:
    1. The management organization necessary to ensure the efficiency of management activities and internal checks and balances of the corporate group of the new venture fund listing applicant must be reasonably well-developed and appropriately operated.
    2. The internal audit system of the corporate group of the initial listing applicant for the venture fund must be in a state of proper development and operation.
  4. The initial listing applicant must be found to be in a situation where an effective system for compliance with laws and regulations is properly established and operated in the management of its assets, etc.
Viewpoints of Public Interest or Investor Protection In addition to the above, the listing is not deemed inappropriate from the viewpoint of the public interest or investor protection.
  1. The corporate group of an entity who has applied for initial listing of a venture fund has developed an internal structure to prevent anti-social forces from intervening in corporate activities and is making efforts to prevent such intervention, and such efforts are deemed appropriate in light of the public interest or investor protection; and
  2. Otherwise, it is deemed appropriate from the viewpoint of the public interest or the protection of investors.

The Certificate of Incorporation of a Venture Fund-issuing Investment Corporation

Item Criteria Details
Must be Closed-ended Rules of an investment corporation states that no refund of investment units shall be made upon demand from investors
Restrictions on Investment in Certain Investees Restrictions on Investment in Certain Investees Matters referred to in the following (i) or (ii)

(i) Investments in a specific investment destination shall not exceed 10% of total net　assets as of the time of acquisition; or

(ii) For unlisted stocks, etc. or unlisted stocks, etc.-related assets, investments in a　specific investment destination shall not exceed 15% of total net assets as of the time　of acquisition, and for other assets, investments in a specific investment destination　shall not exceed 10% of total net assets as of the time of acquisition;
Business Period The period defined as a business period shall be at least six (6) months

Other

Item Criteria Details
Handling by the Designated Book-entry Transfer Institution It shall be required that the relevant venture fund is subject to the book-entry transfer　operation of the designated book-entry transfer institution, or is likely to be so by the time of listing;