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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 April 1, 2021, JPX established a Center for Advanced Research and Development (DigiMa Lab.) to design a future vision for JPX.
The establishment of the Center is in response to a proposal published in a November 2020 report from The Investigation Committee of Independent Outside Directors in Relation to the System Failure: to consider further enhancements to in-house system development capabilities, design supervision skills, and maintenance capacity. The scope of the Center is not limited to these activities; it will work in a wide range of areas such as creating with users a new concept market as well as exploring an overall system design that will allow JPX to maintain and enhance its business competitiveness.
Through the Center's work, JPX will be committed to accelerating digital transformation, further improving resilience, and enhancing the experience of investors, listed companies, market participants, and other stakeholders.
The Council of Experts Concerning the Follow-up of Japan's Stewardship Code and Japan's Corporate Governance Code (Chairperson: Kanda Hideki, Professor of Gakushuin University Law School), jointly established by TSE and the Financial Services Agency, has published a proposal for the revisions of Japan's Corporate Governance Code and Guidelines for Investor and Company Engagement. In response to this, on April 7, TSE released its proposal for the revision of Japan's Corporate Governance Code (public consultation to May 7).
For this revision, to prevent the spread of Covid-19, TSE chose not to hold explanatory seminars for listed companies but instead provided information through videos and written materials.
TSE will continue to work to improve the effectiveness of corporate governance reform, aiming for sustainable growth and increased corporate value of listed companies over the mid to long term.
On April 8, new ETFs were simultaneously listed under the Japan-China ETF Connectivity scheme established by Japan Exchange Group, Inc. (JPX), Shanghai Stock Exchange (SSE), and Shenzhen Stock Exchange (SZSE). JPX and Tokyo Stock Exchange, Inc. (TSE) held a commemorative ceremony on the same day. Akazawa Ryosei, State Minister of Cabinet Office for Financial Services, and Matsushita Koichi, President of Daiwa Asset Management Co. Ltd., were joined by market participants in Japan. SSE President Cai Jianchun and SZSE Supervisory Board Chairman Yang Zhihua offered congratulatory video messages in celebration of the further development of Japan-China ETF Connectivity. At TSE, Daiwa Asset Management Co. Ltd. listed an ETF tracking an index of 50 stocks on the SSE Science and Technology Innovation Board (STAR50) and another tracking China's Greater Bay Area (GBA) Innovation 100 Index while, at SZSE, ICBC Credit Suisse Asset Management Co. Ltd. listed an ETF tracking the Nikkei 225. These ETFs provide Japanese and Chinese investors with even more options to diversify their portfolios.
JPX updated its 3rd Medium-Term Management Plan (FY2019-FY2021).
In response to the system failure that occurred last year, JPX has renewed its awareness of the heavy responsibility of being a market operator and will work to restore confidence and strengthen market functionality by soundly implementing the urgent recurrence prevention measures, aiming for improved "Resilience" as well as the "Never Stop" ideal.
In addition, from the mid- to long-term perspective, JPX will aim to fulfil the exchange's main mission of stable market operations by promoting exploration of better IT functionality and personnel and establishment of a research department, for example, on the top of the current digital transformation (DX) initiatives. Furthermore, moving into the final year of its 3rd Medium-Term Management Plan, JPX will work on preparing to enable responses to changes in the way capital is raised and invested such as ESG investment, as well as soundly implementing important initiatives such as the market restructure.
JPX released its consolidated financial results for FY2020.
Operating revenue was up JPY 9.6 billion (+7.8%) year on year to JPY 133.3 billion, due mainly to an increase in cash equity trading value.
Operating expenses were up JPY 2.8 billion (+4.9%) year on year to JPY 61.3 billion, due mainly to an increase in system-related costs as well as the impact of reflecting expenses posted by TOCOM, which became a subsidiary of JPX in October 2019, in consolidated financial results.
As a result, operating income increased JPY 6.0 billion (+8.8%) to JPY 74.5 billion, with net income (attributed to owners of the parent company) up JPY 3.7 billion (+7.9%) to JPY 51.3 billion.
This fiscal year, we achieved the profit target set out in the 3rd Medium-Term Management Plan. To express our appreciation for the support we have received from our shareholders in implementing the various measures needed to ensure stable market operations through the Covid-19 pandemic, JPX will pay a special dividend of JPY 10 per share for the fiscal year ended March 2021 in addition to the ordinary dividend.
On April 28, 2021, the Japanese Financial Services Agency (JFSA) and Japan Exchange Group (JPX) held an online seminar on the theme of "TCFD Disclosure and Transition Finance: Towards Carbon Neutral in 2050". In the first panel, representatives from the Ministry of Economy, Trade and Industry, the FSA and the Ministry of Environment discussed the meaning of transition finance and how TCFD-based disclosure can contribute to carbon neutrality. Then, JPX introduced its own TCFD-related activities, including the Practical Handbook for ESG Disclosure and the JPX ESG Knowledge Hub. On the final panel, representatives from CDP, Central Research Institute of Electric Power Industry, Tokio Marine Holdings, and Mitsubishi Corporation discussed the use of TCFD as a metric to measure the transition. Around 800 people watched the seminar live, but it is also available on demand. The first panel will be available to view with English subtitles in the near future.