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Listing

Listing Regulations of Preferred Stocks, etc.

The listing rules of a preferred stock, etc. that means a non-participating preferred stock and subsidiary-linked dividend stock are prescribed in PART3 of Securities Listing Regulations.

Initial Listing

In order to list preferred shares, etc., it is necessary that the issue details and other matters of such preferred shares, etc. conform to the standards set forth in Part 3 (Preferred Shares, etc.) of the Securities Listing Regulations.
In particular, TSE examines preferred shares, etc. for the appropriateness of profit prospects and information disclosure of the listed company, because preferred shares, etc. will have special merchantability different from common shares in terms of conditions such as profit dividends, distribution of residual assets, cancellation of shares, conversion rights to common shares, etc., and voting rights, etc.

When TSE approves the initial listing of preferred shares, etc., it notifies the Commissioner of the Financial Services Agency.
The market segment (Prime Market, Standard Market, or Growth Market) of the listed preferred stock, etc. will be the same as that of the common stock.

The actual examination criteria are as follows.

Items Criteria
Status of the issuer An issuer of a security for which an initial listing application is made is an issuer of a listed stock with voting rights.
Profitability An issuer of a security for which an initial listing application is made is expected to record profits sufficient to pay surplus dividend pertaining to such security.
Appropriateness of disclosure of corporate information, etc. An issuer is in a status where disclose of the corporate information, etc. may be carried out in an appropriate manner.
Number of shareholders The number of holders of a listed preferred stock, etc. of more than 1 unit is expected to reach 400 or more by the time of listing.
Tradable shares Number of tradable shares The number of tradable shares is expected to reach 2,000 units* or more by the time of listing.
Market capitalization of the tradable shares The market capitalization of tradable shares as of the listing day is expected to reach 1 billion yen or more.
Form of Share Certificate The share certificates for the preferred shares, etc. are prepared in accordance with the rules and regulations of the Exchange.
Handling by the designated book-entry transfer institution Such security 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.
Restriction on transfer of shares Transfer of a preferred stock, etc. pertaining to an initial listing application is not restricted.
Others Other matters deemed necessary by the Exchange from the viewpoint of the public interest or the protection of investors.

  • One unit refers to the number of shares per Share Unit when the Share Unit system is adopted, or one share when the Share Unit system is not adopted (the same hereinafter).

Timely Disclosure

Because preferred shares have a different nature from common shares, listed companies that issue preferred shares are required to disclose information in accordance with Part 2, Chapter 4, Section 2 (Timely Disclosure of Corporate Information, etc.) of the Securities Listing Regulations, as well as to make timely and appropriate disclosure when information arises that may significantly affect the investment decisions of investors in the preferred shares (timely disclosure).

Therefore, TSE requires issuers of preferred stock to disclose the following information in accordance with Part 3 (Preferred Stock, etc.) of the Securities Listing Regulations.

Items When Disclosure is Required
Acquisition by the Issuer Policy of Acquisition, etc. by the Issuer When announcing financial results (including interim financial results)
(The details of the policy regarding the acquisition of listed preferred shares, etc. must be disclosed.)
Changes in Acquisition and Other Policies If the company decides to change its most recently announced policy on acquisitions*
Subsidiary-Linked Dividend Stock Decisions Related to the Target Subsidiary If the body that decides the execution of business of the subsidiary (the target subsidiary) related to the Subsidiary Linked Dividend Shares decides important matters (excluding matters that have a negligible effect on investment decisions regarding the Subsidiary-Linked Dividend Shares) regarding the operation, business or assets of the target subsidiary (including cases where the body decides not to implement the matters related to such decisions).
Fact of Occurrence Related to Target Subsidiary Material facts (excluding those that have a negligible effect on investment decisions regarding subsidiary-linked dividend shares) relating to the operation, business or assets of the target subsidiary
Details of Financial Results of the Target Subsidiary When the target subsidiary's accounts for the fiscal year or interim accounting period or consolidated fiscal year or interim consolidated accounting period have been finalized
Revision of Financial Results of Target Subsidiary In the event of any differences (limited to those that have a material impact on investment decisions on subsidiary-linked dividend shares) in the newly calculated forecasts or financial results for the current fiscal year of the target subsidiary in comparison with the most recently announced forecasts (or, in the absence of such forecasts, actual results for the previous fiscal year as announced) for sales, operating income, ordinary income or net income, or dividends from retained earnings of the target subsidiary
Summary of Quarterly Results of Target Subsidiary When the quarterly financial results of the target subsidiary for the first and third quarters of the fiscal year are finalized
Basic Policy on Corporate Governance of the Target Subsidiary and Status of Implementation of Such Policies and Measures When promptly announcing financial results for a fiscal year
Matters concerning Parent Companies, etc. related to the Target Subsidiary When promptly announcing financial results for a fiscal year
Fact of Occurrence related to Consolidated Subsidiary of Target Subsidiary Material facts (other than those that have a negligible effect on investment decisions regarding subsidiary-linked dividend shares) relating to the operations, business or assets of a consolidated subsidiary of the target subsidiary

 
  • The decision to acquire preferred shares is naturally required to be disclosed in accordance with Part 2, Chapter 4, Section 2 (Timely Disclosure of Corporate Information, etc.) of the Securities Listing Regulations.

Delisting

Preferred shares, etc. will be delisted when the absolute volume of preferred shares, etc. in circulation is insufficient and fair price formation becomes difficult, or when the common stock issued by the listed company that is the issuer meets the delisting criteria set forth in Chapter 6 of Part 2 of the Securities Listing Regulations.

If there is a risk that the preferred shares, etc. may fall under the delisting criteria, the TSE will make this fact known by assigning the preferred shares to Securities Under Supervision. If a decision is made to delist the preferred stock, it will be assigned to Securities to Be Delisted from the day following the day on which the decision to delist is made, and will be delisted after a certain period of time has elapsed.

The reasons for delisting of preferred stocks, etc., as stipulated in Part 3 (Preferred Stocks, etc.) of the Securities Listing Regulations, are as follows.

Items Criteria
Violation, etc. of the listing agreement* Cases where an issuer carries out a material breach concerning a listing agreement pertaining to a preferred stock, etc.
Delisting of common stock* Cases where common stock issued by the issuer of a preferred stock, etc. falls under the delisting criteria prescribed in Part 2, Chapter 6 of the Securities Listing Regulations
Number of shareholders When the number of shareholders is fewer than 400 for more than one year
Tradable
shares
 Number of tradable shares When the number of tradable shares is fewer than 2,000 units for more than one year
Tradable share market capitalization When tradable share market capitalization is less than JPY 1 billion for more than one year
Expiration of the remaining period Cases where the remaining period of a preferred stock, etc. expires
Trading volume* When average monthly trading volume is fewer than 10 units for six months
Removal of handling by the designated book-entry transfer institution Cases where a security ceases to be subject to the book-entry transfer operation of the designated book-entry transfer institution
Other Cases where the Exchange deems that delisting of a security is appropriate for the public interest or the protection of investors

  • Where an issuer of a listed preferred stock, etc. falls under any of the these criteria, all securities such as preferred stocks, etc. issued by such issuer shall be delisted.
  • In cases (limited to cases that the Exchange deems appropriate) where there are provisions to the effect that the issuer of the listed preferred stock, etc. will or may acquire said listed preferred stock, etc. upon the arrival of a specified deadline, the criteria for trading volume in the delisting criteria will not be applied.

Trading

Please refer to the following hyperlink destination about the trading rules of a listed preferred stock, etc.

Trading (Domestic Stocks) - Overview