TSE and LSE plan new market for smaller companies

Source: London Stock Exchange

London Stock Exchange Group and Tokyo Stock Exchange Group, today announced their intention to establish a new market for emerging companies.

The market will be operated as a joint venture on an equal basis, and will build on the London Stock Exchange's success in creating and developing a market structure designed for smaller companies through AIM, and the Tokyo Stock Exchange's local expertise and infrastructure.

The market will be a new risk capital market for companies and investors from Japan and elsewhere in Asia. It will create new investment opportunities for sophisticated investors, and provide a new funding option for smaller companies which are not yet sufficiently developed for existing public markets. Historically, these companies have faced a funding gap, with limited access to risk capital resulting in a reliance on personal capital or bank loans.

Atsushi Saito, CEO of Tokyo Stock Exchange Group, Inc., said: "The new market will contribute to Japanese economic growth by providing a vibrant risk capital environment for issuers. This will make Tokyo the centre of a new community of Japanese and international investors and intermediaries. We are very pleased to work closely with our partner the LSE, and to benefit from their success in the AIM market. We look forward to working with them to help young, innovative companies access the long-term funding that they need to support future growth."

Clara Furse, Chief Executive of the London Stock Exchange, said: "We are very happy to have this important opportunity to work with the Japanese financial community to introduce a market model based on AIM. AIM is already established as the world's leading growth market, providing smaller companies with long-term institutional investment capital to grow their businesses within an appropriate regulatory framework.

"Bringing together the Tokyo Stock Exchange's knowledge of the region and our expertise in the development of growth markets creates a powerful partnership to deliver this exciting new venture."

It is anticipated that the market will be established by the end of 2008, and will be operated by a joint venture company based in Tokyo. The market's structure will reflect AIM's principles-based regulatory model and will be designed to meet the needs of international investors, balancing appropriate safeguards with the flexibility required by growth companies, and supporting companies in raising capital throughout their lifecycle.

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