Listing criteria for REITs is described in the TSE Securities Regulations. The TSE REIT Market is based on the concept of alternative way of real-estate investment so that the criteria outlines various points such as the ratio of real estate and the asset management system.
Specific listing examination criteria are as follows (Abbreviated regarding contract-type investment trusts):
Attributes of Asset Management Company
| Item |
Criteria Details |
| Appropriateness of Asset Management Company |
An asset management company entrusted with business pertaining to management of the assets of an investment corporation is a members of the Investment Trusts Association, Japan. |
| Transfer Agent |
An administrator of the investor register is approved by the Exchange as an organization as specified by the Enforcement Rules |
Details of Assets Under Management, etc.
| Item |
Criteria Details |
| Ratio of the amount of real estate,etc. to the total amount of assets under management, etc. |
Expected to reach 70% or more |
| Ratio of the total amount of real estate, etc., real estate-related assets and current assets to the total amount of assets under management, etc. |
Expected to reach 95% or more by the time of listing |
Financial Details
| Item |
Criteria Details |
| Total Net Assets |
Expected to reach 1 billion yen or more by the time of listing |
| Total Assets |
Expected to reach 5 billion yen by the time of listing |
| Auditor Opinion |
The following (a) and (b) are satisfied:
- No false statements is made in the securities reports, etc. which contain or make reference to financial statements, etc. for each business period or interim financial statements, etc. for each business period which ended in the last 2 years pertaining to a security for which an initial listing application is made; and
- An audit reports attached to the financial statements, etc. for each business period ending within the last 2 years or an interim audit report attached to interim financial statements, etc. for a business period which ended in the last year contain an "unqualified opinion" or a "qualified opinion with exceptions", or an "opinion that the interim financial statements, etc. provide useful information" or a "qualified opinion with exceptions" by certified public accountants, etc.; provided, however, that the same shall not apply to cases where the Enforcement Rules specify otherwise
|
| Business Period |
The period prescribed as a business period in the rules of an investment corporation is 6 months or longer |
REIT Ownership Conditions
| Item |
Criteria Details |
| Listed Investment Units |
Expected to reach 4,000 or more by the time of listing |
| Major Investors (the 10 entities with the largest investment unit holdings; hereinafter the same) |
The ratio of the total number of the investment units held by the major investors to the total number of listed investment units is expected to be 75% or less by the time of listing |
| Number of Investors excluding the major investors |
Expected to reach 1,000 or more by the time of listing |
Management System and Structure, etc.
| Item |
Criteria Details |
| Timely Disclosure System |
An entity who has applied for initial listing of a real estate investment trust security is in a status where disclosure of information concerning such real estate investment trust security may be carried out in appropriate manner.
- Documents pertaining to disclosure of information concerning real estate investment trust securities, out of the initial listing application documents, shall appropriately contain the matters which may have a material effect on investment decisions of investors; and
- An entity who has applied for initial listing of a real estate investment trust security shall have a system to conduct timely and appropriate disclosure of information of facts, etc. which will have a material effect on asset management, etc.. Moreover, its system and framework for the preemptive prevention of insider trading, etc. is deemed to be developed and operated appropriately
|
| Asset Management System |
An entity who has applied for initial listing of a real estate investment trust security is in a status to be able to carry out asset management, etc. in a sound manner;
- An entity who has applied for initial listing of a real estate investment trust security has developed an appropriate system at the time of asset management, etc. in order not to damage benefits of investors of an initial listing application security;
- An entity who has applied for initial listing of a real estate investment trust security is recognized not to give or enjoy profit wrongfully through a trading act with the corporate group of a sponsor in light of matters including those referred to in the following a. and b.:
- Where a transaction between an entity who has applied for initial listing of a real estate investment trust security and the corporate group of a sponsor has occurred, such transaction has rationality of continuing the transaction and reasonability of trading terms including trading prices; and
- Benefits of the investors of an initial listing application security are not possibly lost wrongfully because the corporate group of a sponsor gives priority to their own benefits;
- The internal management system is recognized to be reasonably developed and operated in light of matters including those referred to in the following a. and b. so that an entity who has applied for initial listing of a real estate investment trust security can efficiently carry out asset management, etc.:
- A necessary managerial and administrative body is developed and operated appropriately to secure the efficiency of management activities and the internal checking functions of the corporate group of an initial listing applicant; and
- An internal auditing system of the corporate group of an initial listing applicant is developed and operated appropriately; and
- An effective system to comply with laws and regulations, etc. is recognized to be developed and operated appropriately to carry out management activities in the corporate group of an initial listing applicant
|
| Distribution of Money |
Distribution of money pertaining to a security for which an initial listing application is made is expected to continue after listing
That distribution of money of the fund pertaining to such security is expected to be made by continuously owning real estates, etc. which are producing or are expected to produce rent business income, out of management assets, etc., and other viewpoints |
| Other |
It is deemed appropriate from the viewpoints of the public interest or the protection of investors |
Other
| Item |
Criteria Details |
| Written Oath or Recommendation related to Entry into Advisory Agreement pertaining to Timely Disclosure |
An entity who has made an application for initial listing of a real estate investment trust security has assured the Exchange in writing that it will enter into an advisory agreement pertaining to timely disclosure of information concerning such real estate investment trust security with a financial instruments firm during the period until 2 years have passed after listing; provided, however, that the same shall not apply to cases where a managing trading participant recommends an entity who has made an application for initial listing of such real estate investment trust security, using a written recommendation predetermined by the Exchange |
| Handling of Refund |
Rules of an investment corporation states that no refund of investment units shall be made upon demand from investors |
| Consent of Depository |
Where an issue for which an initial listing application is made is, or is expected to be, handled in the book-entry transfer operations of a designated transfer institution |
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