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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.
On November 5, 2019, TSE completely overhauled its equities trading system "arrowhead" (developed by Fujitsu Limited) after four years since the system was launched. New arrowhead provides a more stable and reliable trading environment by (i) preventing sudden and sharp changes in prices, (ii) facilitating the formation of end-of-day closing prices, and (iii) improving processing capability. TSE is committed to further developing the cash equity market and continuing to improve convenience for a wide range of users going forward.
TSE and S&P Dow Jones Indices hosted the 5th Index Forum.
Taking up the theme of the growth of passive management and the evolution of indices, the forum saw many investors hear discussions on the history of passive investing, the development of indices, the latest trend of factor indices (smart beta), which is referred to as the third generation indices, and ESG indices that draw global attention.
TSE will continue to pursue such initiatives to promote the use and adoption of its indices.
Bank of Kyoto - TSE Innovation Meeting 2019 was held under the basic agreement concluded in 2017 with the Bank of Kyoto, Ltd. for a cooperative relationship to support the development of local enterprises. Following on from the 2018 edition, this year's event carried on the effort to support the growth of companies in the region. The event was comprised of two parts. In the first part, approximately 50 listed companies visited a publicly-funded enterprise support institution and a co-working space for makers partly supported by Kyoto City. In the second part, seven venture companies engaged in R&D of advanced technologies gave presentations to listed companies that are exploring collaborative opportunities with ventures. Long lines formed to exchange business cards remained until the networking event ended, demonstrating the event's success.
Japan Exchange Group, Inc. (JPX) held a "FTSE ESG Rating Seminar" at TSE Hall, hosted by FTSE Russell and co-hosted by JPX and London Stock Exchange Group (LSEG). Speakers at the seminar included FTSE Russell's Head of Sustainable Investment, and representatives from FTSE Russell Japan who explained in Japanese about the FTSE Russell ESG rating method, the meaning of each rating category, the logic and thinking behind the ratings, and the thinking behind the survey questions. They also answered questions from the audience in detail. The successful seminar was attended by around 270 representatives from TSE listed companies. The presentation materials used in this seminar and video of each speaker is available on the JPX sustainability website.
TSE stores market information distributed in real time on a daily basis and provides this data as FLEX Historical.
In order for users to easily use this data to conduct analysis, plan investment strategies, and conduct backtesting, TSE joined fintech company AlpacaJapan Co., Ltd. to start providing a processing and analysis program for FLEX Historical data.
This analysis program helps to parse data and convert the data into time series, which is expected to significantly reduce various burdens on customers who need to process them for analysis. Please go to the websites below at GitHub for more information on the program and Qiita for how to use it. The program is available free of charge.
TSE published an outline of proposed rule revisions in "Development of Listing Rules for Improving Governance of Listed Subsidiaries and other Rule Changes." The "Action Plan of the Growth Strategy" (the Action Plan) of the Japanese government (approved by the Cabinet on June 21, 2019) calls for the further strengthening of corporate governance in order to further enhance the competitiveness and credibility of Japanese companies. Particularly with respect to the governance of listed subsidiaries, the Action Plan calls for a more robust governance framework. The framework includes measures such as increasing transparency and requiring more information disclosure by parent companies as well as subsidiaries, and strengthening the independence standards for independent directors/auditors, in order to ensure decision making at listed subsidiaries is independent and the interests of minority shareholders are well protected.
Moreover, the public comments gathered between December 2018 and January 2019 by TSE on the Consultation Paper "Review of TSE Cash Equity Market Structure" called for various improvements to the current listing rules. Also, the Specialized Study Group on Japanese Market Structure under the Financial System Council, which has been deliberating the cash equity market structure since May 2019, has pointed out the need to swiftly review the current rules for which issues have become apparent in terms of delisting, transfer to the 1st Section, change in listed market or section transfer.
TSE will make the necessary revisions to its listing rules toward improving the governance of listed subsidiaries, etc. The revisions are scheduled to be implemented in February 2020.
TSE established the "Study Group to review Minority Shareholder Protection and other Framework of Quasi-Controlled Listed Companies". Made up of academics, listed companies, and investors, the Study Group will discuss matters such as (a) issues revealed in recent incidents surrounding a listed company's shareholders who have substantial control (Quasi-Controlling Shareholder) and the listed company (Quasi-Controlled Listed Company), (b) how to manage the interests of the Quasi-Controlling Shareholder and minority shareholders, and (c) frameworks to protect minority shareholders.
On November 29 and 30, TSE and the Association for Real Estate Securitization (ARES) jointly held "J-REIT Fair 2019 for Retail Investors". 43 of the 63 listed investment corporations on the J-REIT market participated, setting up booths and holding information sessions. Seminars such as J-REIT seminars for investors who are only starting to think about building their assets and those by analysts from securities firms were also held. The seminars and sessions were packed, as some attendees stood to listen in. TSE will hold "J-REIT Fan 2020" on February 1, 2020 as it continues its efforts to broaden the retail investor base for the J-REIT and infrastructure funds markets.
