Review of TSE Cash Equity Market Structure

Following the business combination of Tokyo Stock Exchange Group and Osaka Securities Exchange, which formed Japan Exchange Group, Inc., TSE integrated the cash equity markets in July 2013. During the integration, to avoid confusion and any unnecessary burden on listed companies, as well as investors, the structure of the cash equity market was unchanged.

As a result, TSE operates four cash equity markets for investors, including non-professional; First Section, Second Section, Mothers, and JASDAQ, as of October 2018. Potential improvements are seen around the structure of the cash equity markets and related listing rules. Therefore, TSE is conducting a review on the current cash equity market structure and how the market should be structured in the future.

Consultation Paper "Review of TSE Cash Equity Market Structure"

In December 2018, TSE published the Consultation Paper "Review of TSE Cash Equity Market Structure" and conducted the public consultation. (From 21 December 2018 until 31 January 2019).

"Consultation Paper "Review of TSE Cash Equity Market Structure"" icon-pdf
"Related Data" icon-pdf
Market News "Consultation Paper "Review of TSE Cash Equity Market Structure" published" (Dec. 21, 2018)

Comments Received from Market Participants in Response to the "Review of the TSE Cash Equity Market Structure"

In March 2019, TSE published the "Comments Received from Market Participants in Response to the Review of the TSE Cash Equity Market Structure" and the "Current Issues regarding TSE Cash Equity Market Structure (Summary of Current Issues)."

TSE has conducted public consultation as well as individual meetings, inviting comments from wide range of stakeholders. TSE has categorized the market responses received, and has published the "Comments Received from Market Participants in Response to the Review of the TSE Cash Equity Market Structure." Also, TSE has summarized the market responses and outlined the discussion points regarding the current issues of the market structure, publishing it as "Current Issues regarding TSE Cash Equity Market Structure (Summary of Current Issues)."

In May 2019, to further aid the understanding of market participants with regards to the current issues, TSE additionally published related materials, such as additional material related to the various issues identified as well as TSE's comments and responses with regards to the comments received.

"Comments Received from Market Participants in Response to the Review of the TSE Cash Equity Market Structure" icon-pdf
"Current Issues regarding TSE Cash Equity Market Structure (Summary of Current Issues) " icon-pdf
"Comments Received from Market Participants in Response to the Review of the TSE Cash Equity Market Structure"(Updated)* icon-pdf
Related Data concerning "Comments Received from Market Participants in Response to the Review of the TSE Cash Equity Market Structure"(Updated) icon-pdf
(note)
  • ・TSE's Comments and Responses added
News Release "Related Data and TSE's Comments and Reponses regarding "Comments Received from Market Participants in Response to the Review of the TSE Cash Equity Market Structure" etc. published" (May 30, 2019)
News Release ""Comments Received from Market Participants in Response to the Review of the TSE Cash Equity Market Structure" etc. published" (Mar. 28, 2019)
Market News "TSE Establishes an Advisory Group to Review the TSE Cash Equity Market Structure" (Oct. 29, 2018)

Overview of Market Structure Review and Outline of the New Market Segments

In February 2020, TSE published the "Overview of Market Structure Review and Outline of the New Market Segments" regarding the Cash Equity Market Structure Review. In order to assist and help listed companies, companies preparing for IPO, and market participants start their preparation for the transition, this document describes and explains the outline of the new market segments, the process of transition to the new market structure, and the planned schedule, including the items which will be phased-in before the transition.

"Overview of Market Structure Review and Outline of the New Market Segments" icon-pdf
"(Summary)Overview of Market Structure Review and Outline of the New Market Segments" icon-pdf

Frequently Asked Questions regarding "Overview of Market Structure Review and Outline of the New Market Segments"

TSE has been receiving questions regarding "Overview of Market Structure Review and Outline of the New Market Segments" from listed companies, IPO companies, and market participants, therefore, today TSE has published "Frequently Asked Questions regarding "Overview of Market Structure Review and Outline of the New Market Segments"".

"Frequently Asked Questions regarding "Overview of Market Structure Review and Outline of the New Market Segments"" icon-pdf

Revisions to Listing Rules to Enhance Functions for Raising Funds through the Capital Market(First set of revisions pertaining to cash equity market restructuring)

TSE published "Revisions to Listing Rules to Enhance Functions for Raising Funds through the Capital Market(First set of revisions pertaining to cash equity market restructuring)" and conducted the public consultation (From 29 July 2020 until 11 September 2020). The revisions will be implemented on November 1, 2020.
As the Covid-19 outbreak severely impacts business activities and corporate performance, TSE recognizes the urgent need to enhance capital market’s functions for companies raising funds in the market. In light of the planned cash equity market restructuring, TSE will revise the initial listing criteria, etc. to make the initial listing process smoother for companies and encourage corporate value creation over the mid- to long-term and in addition, revise the delisting criteria, etc., allowing listed companies more flexibility in their capital policies and corporate strategies as they face financial turbulence or challenges.

"(summary)Revisions to Listing Rules to Enhance Functions for Raising Funds through the Capital Market(First set of revisions pertaining to cash equity market restructuring)" icon-pdf
public comments

(JFSA) Expert Study Group on Capital Markets in Japan of the Financial System Council

The Expert Study Group on Capital Markets in Japan of the Financial System Council has discussed and deliberated on market structure of Tokyo Stock Exchange six times since May 2019.
 Based on the results of the discussions, the Expert Study Group has compiled and published "Final Report - A New Equity Market Structure Serving for Companies and Investors in the New Era of Reiwa -" on December 27th,2019.

Upon the publication of this final report, JPX has published a message from Group CEO Kiyota, as "Upon Publication of Final Report by the Expert Study Group on Capital Markets in Japan of the Financial System Council" on December 27th, 2019.

"Publication of Final Report by the Expert Study Group on Capital Markets in Japan of the Financial System Council"(JFSA website)icon-block
News Release "Upon Publication of Final Report by the Expert Study Group on Capital Markets in Japan of the Financial System Council" (Dec. 27th, 2019)