Listing (Venture Funds)

For a venture fund to be listed, the details of its issuance and other matters must satisfy the initial listing criteria set forth in the Securities Listing Regulations (Venture Funds). The initial listing criteria include requirements concerning the ratio of investments in unlisted stocks, etc. to total assets under management, etc., total net assets and other matters. The issuer of the venture fund and its asset management company are also required to have appropriate systems for asset management, compliance and timely disclosure. In addition, the asset management company must be a member of the Investment Management Association of Japan, and appropriate arrangements must be in place for the valuation of unlisted stocks, etc. and unlisted stocks, etc.-related assets included in the assets under management, etc. The specific initial listing criteria are as follows.

Attributes of Asset Management Company


Item	Criteria Details
Appropriateness of Asset Management Company	An asset management company entrusted with business pertaining to the management of the assets of an investment corporation must be a member of the Investment Management Association of 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 Unlisted Stocks, etc. Investment Amount to the Total Amount of Assets Under Management, etc. (from which the management fee reserve amount may be deducted)	The unlisted stocks investment ratio must be expected to exceed 50%. Specifically, either of the following requirements must be satisfied. The unlisted stocks investment ratio already exceeds 50% at the time of the initial listing application. The applicant for initial listing of the venture fund submits the documents specified in a. and b. below at the time of the initial listing application, and the unlisted stocks investment ratio is expected to exceed 50% within two years after listing. A written document containing a plan for incorporating assets under management A written document certifying that the plan for incorporation of assets under management referred to in a. will be achieved within two years after listing (Note) ･Disclosure where a plan for incorporation of assets under management has been submitted Where a written document containing a plan for incorporating assets under management has been submitted, the progress of the incorporation plan must be disclosed once every three months in the disclosure of matters relating to assets under management, etc. Where the incorporation plan is amended or is not achieved, the reasons for this and the future incorporation plan must be disclosed, and the progress of the future incorporation plan must subsequently be disclosed once every three months.

Definitions of Terms


Category	Details
Assets under management, etc. （Rule 1201, Item (1)-7　of the Listing Regulations）	The assets of the investment corporation that is the issuer of the investment security.
Management Fee Reserve Amount (Rule 1305, Paragraph 3 of the Enforcement Rules)	The amount of assets reserved as sources of payment for management fees, administrative fees, and other similar expenses, including the portion of assets related to unlisted stocks, etc. corresponding to such reserved amount.
The unlisted stocks investment ratio （Rule 1305, Item (2), Sub-Item a of the Listing Regulation, Rule 1305 Paragraph 2 of the Enforcement Rules. ）	The ratio of the aggregate of the amount of principal investment assets and, out of assets related to unlisted stocks, etc., the amount corresponding to principal investment assets, to the total amount of assets under management, etc. The management fee reserve amount may be deducted from the total amount of assets under management, etc. (Note) ･Where the management fee reserve amount is deducted from the total amount of assets under management, etc. in calculating the unlisted stocks investment ratio, a document showing the details of, and the basis for calculating, the management fee reserve amount must be submitted.
Principal Investment Assets (Rule 1305, Paragraph 2 of the Enforcement Rules)	Unlisted stocks, etc.; continuously held stocks, etc.; stocks, etc. acquired through a public offering or secondary distribution related to a listing on a domestic financial instruments exchange or a foreign financial instruments exchange, etc. (limited to cases where such stocks, etc. are acquired through preferential allotment or where the securities registration statement or similar document includes an expression of interest in acquiring such stocks, etc.); and stocks, etc. acquired through a third-party allotment connected to such a listing.
Unlisted Stocks （Rule 1201, Item (15)　of the Listing Regulations）	Unlisted stocks mean domestic stocks and foreign stocks other than stocks listed on a domestic financial instruments exchange (excluding that issued by a company listed on the specified financial instruments exchange markets), or stocks listed or continuously traded on a foreign financial instruments exchange, etc.;
Unlisted stocks, etc. （Rule 1201, Item (16)　of the Listing Regulations）	The following: Unlisted stocks; Preferred stocks, etc., subscription warrant securities, or bonds with warrants issued by an issuer of unlisted stocks; and Corporate bonds issued by an issuer of securities referred to in a. or b., or monetary claims referred to in Article 3, Item 7 of the Investment Trust Act Enforcement Order whose debtor is an issuer of securities referred to in a. or b., provided that the venture fund-issuing investment corporation holds securities referred to in a. or b.
Unlisted Stocks, etc.-related assets （Rule 1201, Item (17)　of the Listing Regulations）	The following assets: Equity interests in silent partnership agreements under which contributed assets are managed primarily for investment in unlisted stocks, etc. and continuously held stocks, etc.; Equity interests in limited partnership agreements for investment prescribed in Article 3 of the Limited Partnership Act for Investment, limited to agreements under which investors jointly contribute assets for the acquisition and holding of unlisted stocks, etc. and continuously held stocks, etc., and the contributed assets are managed primarily for investment in unlisted stocks, etc. and continuously held stocks, etc.; Beneficiary certificates, limited to those for which the investment trust assets are managed primarily for investment in unlisted stocks, etc. and continuously held stocks, etc.; Investment securities, limited to those for which the assets held by an investment corporation for investment management purposes are managed primarily for investment in unlisted stocks, etc. and continuously held stocks, etc.; Stocks, limited to those whose issuer was established only for the purpose of managing its assets as investments in unlisted stocks, etc. and continuously held stocks, etc.; Preferred equity investment securities prescribed in the Act on Securitization of Assets, limited to cases where the specified purpose company primarily manages, as investments in unlisted stocks, etc. and continuously held stocks, etc., assets it has acquired during the course of business pertaining to securitization of assets; Beneficiary certificates from special purpose trusts prescribed in the Act on Securitization of Assets, limited to those for which the trust assets of the special purpose trust are managed primarily for investment in unlisted stocks, etc. and continuously held stocks, etc.; and Rights based on foreign laws and regulations or securities issued by a foreign entity which have the nature of the rights or securities referred to in a. through g.
Continuously held stocks, etc. (Rule 1201, Item (6) of the Listing Regulations)	The following assets: Domestic or foreign stocks that have been continuously held since before they were listed on a domestic financial instruments exchange or listed or became continuously traded on a foreign financial instruments exchange, etc., and that are currently listed or continuously traded; Preferred stocks, etc., subscription warrant securities, or bonds with warrants that have been continuously held since before stocks issued by the same issuer were listed or became continuously traded, as well as stocks acquired by exercising the subscription warrants relating to such subscription warrant securities or bonds with warrants; Corporate bonds issued by an issuer of securities referred to in a. or b. that have been continuously held since before stocks issued by that issuer were listed or became continuously traded, provided that the venture fund-issuing investment corporation holds securities referred to in a. or b.; and Monetary claims referred to in Article 3, Item 7 of the Investment Trust Act Enforcement Order whose debtor is an issuer of securities referred to in a. or b. and that have been continuously held since before stocks issued by that issuer were listed or became continuously traded, provided that the venture fund-issuing investment corporation holds securities referred to in a. or b.

Financial Details


Item	Criteria Details
Total Net Assets	Expected to reach 3 billion yen or more by the time of listing
Auditor Opinion	The following (a) and (b) are satisfied: (a) No false statement shall be made in the annual securities reports, etc. which contain or make reference to financial statements, etc. for each business period ended in the last two (2) years (limited to the period after the venture fund-issuing investment corporation pertaining to such initial listing application was established; the same shall apply hereunder) or interim financial statements, etc. for each such business period; (b) An audit report attached to financial statements, etc. for each business period ended within the last two (2) years or an interim audit report attached to interim financial statements, etc. for a business period ended in the last year shall 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 the cases where the Enforcement Rules specify otherwise;

Venture Funds Ownership Conditions


Item	Criteria Details
Listed Investment Units	Expected to reach 2,000 units or more by the time of listing;
Major Investors (meaning the top ten (10) Investors in Descending Order of Investment Units Held）	The aggregate of the total number of investment units held by major investors and the number of treasury investment units (excluding, where a resolution for the disposal of treasury investment units has been made, the number of investment units to be disposed of) shall be expected to be 80% or less of the total number of listed investment units by the time of listing;
Number of Investors Excluding the Major Investors	The number of investors holding one (1) or more investment units, excluding major investors and, where treasury investment units are held (other than where a resolution for the disposal of all of the investment units held has been made), the issuer of the issue applying for initial listing, shall be expected to reach 300 or more by the time of listing;

Management System and Structure, etc.


Item	Criteria Details
Appropriateness of Valuation of Unlisted Stocks	Appropriate arrangements must be in place for the valuation of unlisted stocks, etc. and assets related to unlisted stocks, etc. included in the assets under management, etc. For the disclosure of the matters specified in Rule 1312, Paragraph 6, Item 5 of the Listing Regulations, unlisted stocks, etc. and assets related to unlisted stocks, etc. included in the assets under management, etc. must be valued using the method prescribed in Article 14 of the Rules on Valuation and Accounting of Investment Trust Assets established by the Investment Management Association of Japan. However, this requirement does not apply to unlisted stocks, etc. or assets related to unlisted stocks, etc. that are not valued using such method, provided that their valuation is entrusted to a valuation institution for unlisted stocks, etc. In the case referred to in the proviso to (1), the valuation institution for unlisted stocks, etc. must be considered sufficiently independent from the applicant for initial listing of the venture fund, taking into comprehensive account capital, personnel, transactional, and other relationships. In the case referred to in the proviso to (1), the valuation institution for unlisted stocks, etc. must be considered to have an internal system capable of conducting appropriate valuations, based on the following matters: As a general rule, at least three years have elapsed since its establishment as a valuation institution by the end of the relevant base business period, and the institution has an appropriate financial base and a record of stable earnings; The institution has secured the personnel necessary to conduct valuation operations; and The institution has an appropriate track record as a valuation institution.
Appropriateness of Disclosure	A venture fund initial listing applicant is in a state where disclosure of information concerning such venture fund can be carried out in an appropriate manner. Documents pertaining to disclosure of information concerning venture funds, out of the initial listing application documents, shall appropriately contain matters which may have a material impact on investment decisions of investors; and An entity who has applied for initial listing of a venture fund shall have a system to conduct timely and appropriate disclosure of information of facts, etc. which will have a material impact 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
Soundness of Asset Management, etc.	The initial listing applicant must be in a position to manage its assets, etc. in a sound manner. The initial listing applicant for the venture fund must have an appropriate system in place to ensure that the management of assets, etc. does not harm the interests of the investors of the issue applying for initial listing. The initial listing applicant for the venture fund must not be considered to have unfairly provided or received benefits through transactions or other management of assets with the corporate group of the sponsor, in light of the matters listed in a. and b. below and other matters: Where transactions have arisen between the initial listing applicant for the venture fund and the corporate group of the sponsor, such transactions must have a reasonable basis for being continued, and the terms of the transactions, including the transaction prices, must be appropriate. There must be no situation in which the interests of the investors of the issue applying for initial listing are unreasonably impaired as a result of the sponsor's corporate group giving priority to its own interests. In order for the initial listing applicant for the venture fund to effectively manage its assets, etc., its internal management system must be found to be reasonably well-developed and appropriately operated, as listed in a. and b. below: The management organization necessary to ensure the efficiency of management activities and internal checks and balances of the corporate group of the initial listing applicant for the venture fund must be reasonably well-developed and appropriately operated. The internal audit system of the corporate group of the initial listing applicant for the venture fund must be reasonably well-developed and appropriately operated. The initial listing applicant for the venture fund must be found to be in a situation where an effective system for compliance with laws and regulations is properly established and operated in the management of its assets, etc.
Viewpoints of Public Interest or Investor Protection	In addition to the above, the listing is not deemed inappropriate from the viewpoint of the public interest or investor protection. The corporate group of an entity who has applied for initial listing of a venture fund has developed an internal structure to prevent anti-social forces from intervening in corporate activities and is making efforts to prevent such intervention, and such efforts are deemed appropriate in light of the public interest or investor protection; and Otherwise, it is deemed appropriate from the viewpoint of the public interest or the protection of investors.

The Certificate of Incorporation of a Venture Fund-issuing Investment Corporation


Item	Criteria Details
Must be Closed-ended	Rules of an investment corporation states that no refund of investment units shall be made upon demand from investors
Primary Investment Assets	The certificate of incorporation must state that, as a rule, the unlisted stocks investment ratio will exceed 50%. The certificate of incorporation must include either a. or b. below: A provision stating that no investment will be made in corporate bonds referred to in Rule 1201, Item (6) c., monetary claims referred to in Item (6) d., or corporate bonds and monetary claims referred to in Rule 1201, Item (16) c., including the portion of assets related to unlisted stocks, etc. corresponding thereto. A provision stating that the management policy is that the ratio of the investment amount in the corporate bonds and monetary claims referred to above, including the portion of assets related to unlisted stocks, etc. corresponding thereto, to the total amount of assets under management, etc. will not exceed 30% in principle.
Other Investment Assets	The certificate of incorporation must state that assets other than unlisted stocks, etc., assets related to unlisted stocks, etc., and continuously held stocks, etc. are limited to assets referred to in the items of Article 19, Paragraph 3 of the Regulation for Enforcement of the Act on Investment Trusts and Investment Corporations, monetary claims referred to in Article 3, Item (7) of the Investment Trust Act Enforcement Order, current assets, etc., and rights and other assets pertaining to transactions that are intended to reduce the risk of losses arising from price fluctuations in assets under management, etc. or other risks and that are objectively recognized as reducing such risks. Reference: Examples of Assets Other Than Unlisted Stocks, etc., Assets Related to Unlisted Stocks, etc., and Continuously Held Stocks, etc. Assets referred to in the items of Article 19, Paragraph 3 of the Regulation for Enforcement of the Act on Investment Trusts and Investment Corporations Examples include listed securities, over-the-counter traded securities, Japanese government bonds, municipal bonds, bonds issued by special corporations, specified corporate bonds under the Act on Securitization of Assets, corporate bonds, stocks and subscription warrant securities for which prices are published by an association, investment trust beneficiary certificates, investment securities, investment corporation bonds, covered warrants, and listed commodities. Monetary claims referred to in Article 3, Item (7) of the Investment Trust Act Enforcement Order Current Assets, etc. Assets prescribed in Article 37, Paragraph 3, Item (1) a. through c. and g. through j., and Item (4) d. of the Regulation on Accounting for Investment Corporations, provided that the assets prescribed in Item (1) j. are limited to consumption tax receivable, as well as beneficial interests in trusts of such assets, excluding those that constitute securities, as defined in Rule 1201, Item (19) of the Listing Regulations. Rights and Other Assets Rights and other assets pertaining to transactions that are intended to reduce the risk of losses arising from price fluctuations in assets under management, etc. or other risks, and that are objectively recognized as reducing such risks Examples include derivative transactions for hedging purposes.
Restrictions on Investment in Certain Investees	Either a. or b. below must apply. Investments in a specific investee will not exceed 10% of total net assets as of the time of acquisition. For unlisted stocks, etc. or assets related to unlisted stocks, etc., investments in a specific investee will not exceed 15% of total net assets as of the time of acquisition, and for other assets, investments in a specific investee will not exceed 10% of total net assets as of the time of acquisition. (Note) ･Disclosure Where an Investment Exceeds 10% of Total Net Assets Where an investment in a specific investee exceeds 10% of total net assets as of the time of acquisition, the reasons for determining that the investment is appropriate must be stated in a timely disclosure made at the time of acquisition.
Borrowings and Issuance of Investment Corporation Bonds	Either a. or b. below must apply. The venture fund-issuing investment corporation will not borrow funds or offer investment corporation bonds. The certificate of incorporation or similar document must set out a management policy under which the ratio of interest-bearing liabilities to total assets will, in principle, be maintained at 20% or less; a risk management policy concerning borrowings or the issuance of investment corporation bonds; and matters concerning the purpose, maximum amount, and use of proceeds of such borrowings or issuance. (Note) ･Treatment Where the Ratio of Interest-bearing Liabilities to Total Assets Exceeds 20% Where the ratio of interest-bearing liabilities to total assets of the venture fund-issuing investment corporation exceeds 20% as of the end of a business period, the listed venture fund will enter a grace period. If the ratio does not decline to 20% or less by the end of the following business period, the listed venture fund will fall under the delisting criteria. However, where the venture fund-issuing investment corporation submits to TSE a written document stating the reasons why the ratio exceeded 20%, and TSE deems that such reasons are temporary funding needs or other unavoidable circumstances, the listed venture fund will not be placed under a grace period nor delisted. Temporary funding needs or other unavoidable circumstances may include the use of bridge loans to respond flexibly to investment timing, or sudden fluctuations in total assets due to market conditions or other factors.
Business Period	The period defined as a business period shall be at least six (6) months

Other


Item	Criteria Details
Handling by the Designated Book-entry Transfer Institution	It shall be required that the relevant venture fund 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;

Equities, Debt, Funds

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- Venture Funds

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