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JPX group companies undertake various initiatives and disseminate information with the aim of providing the most attractive markets to all users.
Every month, we showcase the highlights of these efforts in short and concise summaries just for you.
JPX-R published "Principles for Preventing Corporate Scandals" on March 30, 2018. In recent years, a large number of corporate scandals have emerged at listed companies. They not only hurt the reputation of the company but also damage its corporate value, whereby the capital market would lose its credibility. Considering these situations, JPX-R has compiled a new set of principles for needed actions that are expected to facilitate listed companies' efforts to prevent such scandals and deter their corporate value from being undermined.
We hope that these Principles will be effectively used as a basis for each listed company's efforts to prevent corporate scandals.
As TSE plans to introduce an ETF market making incentive scheme on July 2, 2018, it started accepting applications for ETF Market Makers on April 2, 2018. By the end of the same month, Nomura Securities Co., Ltd. and Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. were designated as ETF Market Makers, while TSE continues accepting such applications. Through the incentive scheme, ETF Market Makers will be required to provide bid and ask quotes, which will lead to improved liquidity in the ETF market. Therefore, it is expected that investors will be able to consistently trade ETFs at appropriate prices.
JPX-R held seminars for persons in charge of compliance in Tokyo, Osaka, and Nagoya, in which 156 persons in total, mainly officers and employees in charge of compliance at securities companies, participated. The topics of the seminars covered the inspection plan for FY2018, the cases of deficiencies in trading supervision systems and frameworks, points to note at the time of launching new business and new products, outline of the amendments to the laws and regulations, etc. (i.e., introduction of a registration system for those engaging in low latency trading), and cyber security-related risk management.
From April 10 to 12, 2018, the RI Asia JAPAN 2018 conference was held for the fifth year at TSE and hosted by Responsible Investors (RI) and co-sponsored by JPX and TSE. At the conference, lively discussions were held on topics such as corporate sustainability, responsible investment, and confidence in the capital market, as well as trends of ESG in finance and the UN's Sustainable Development Goals (SDGs), attracting domestic and foreign institutional investors and market participants.
TSE provided seminars on the revision of Corporate Governance Code for listed companies from April 16 to 24 in five major cities in Japan (Tokyo, Osaka, Nagoya, Sapporo, and Fukuoka). With 3,400 participants, the seminars explained the outline of the revision draft published on March 30 and how to apply the revisions to actual operations.
TSE will continue to improve effectiveness of corporate governance reform for sustainable corporate growth and increased corporate value of listed companies over the mid- to long-term.
JPX released its consolidated financial results for FY2017 on April 27.
Operating revenue was up JPY 12.8 billion (11.9%) year on year amounting to JPY 120.7 billion due mainly to a large growth in trading volume of cash and derivatives from the previous fiscal year and an increase in ETF AUM.
Operating expenses were up JPY 0.7 billion (1.4%) year on year amounting to JPY 50.9 billion. As a result, operating income increased JPY 12.4 billion (20.9%) to JPY 71.7 billion with the net income (attributed to owners of the parent company) up JPY 8.3 billion (19.8%) to JPY 50.4 billion. The revenue and income both marked the highest in record.
With the fifth anniversary of our founding in January this year and the highest net income ever, JPX will provide JPY 10 per share for the fiscal year ended March 2018 in addition to the ordinary dividend to express our appreciation for the support from our shareholders.
JPX updated the 2nd Medium-Term Management Plan (FY2016-FY2018) on April 27.
JPX has set realization of well-balanced business portfolio as mid- to long-term vision under the corporate mission for nurturing the sustainable development of the market and contributing to greater affluence in society. With this backdrop, we have formulated four core initiatives raised in the 2nd Medium-Term Management Plan: encouraging mid- to long-term asset building, supporting listed companies in enhancing corporate value, reinforcing market infrastructure, and creating new fields of exchange business.
Based on environmental changes and the progress to date, we reviewed our implementation plan to accomplish the 2nd Medium-Term Management Plan and modified it with an eye on the potential changes brought about by fintech, while valuing maintenance and reinforcement of market reliability and efficiency by strengthening market functionalities and BCP and working on shortening the settlement cycle of JGBs and stocks.
In FY 2018, JPX will work on new missions such as promoting ESG investments, strengthening of human resources foundation, and utilizing fintech for the next medium-term management plan.