Firms Rush to Clear Hurdles for New TSE Top-Tier Section

Economy

Tokyo, May 6 (Jiji Press)--Companies are speeding up efforts to review their shareholder composition in order to be listed on the Tokyo Stock Exchange's planned new top-tier section from next April.

The TSE will be reorganized from its four-tier structure to a three-tier system, comprising the top-tier "Prime," mid-tier "Standard" and bottom-tier "Growth" sections. The move is aimed at clarifying the standards for listing to encourage more investments from inside and outside Japan.

The reorganization is the biggest reform of the TSE since its merger with Osaka Securities Exchange in 2013 to create Japan Exchange Group Inc. <8697>, or JPX.

The TSE's current first section requires companies to have a market capitalization of 25 billion yen or more to be listed. The new Prime section sets a minimum required market capitalization of 10 billion yen in free-floating shares, excluding shares owned by the parent company and others.

The minimum proportion of freely traded shares in all outstanding shares will be set at 35 pct, and diversity in company management will be required in line with corporate governance guidelines worked out by the TSE and the Financial Services Agency.

[Copyright The Jiji Press, Ltd.]

Jiji Press