The Tokyo Stock Exchange Group, ("TSE") and the London Stock Exchange Group ("London Stock Exchange") today published the rulebook for their new growth market for public comment, and confirmed the market's name: TOKYO AIM.
The rulebook, which was developed following extensive discussion with market participants, sets out the regulations for securities on the market as well as the rules for Nominated Advisers (J-Nomads).
Established and operated as a joint venture between the TSE and London Stock Exchange, TOKYO AIM will provide a new funding option for growing companies in Japan and Asia, giving them access to a capital market specifically tailored for their needs and to a wider investor base, while creating new investment opportunities for Japanese and international professional investors. The creation of TOKYO AIM became possible following the revision of the Japanese Financial Instruments and Exchange Act passed in June 2008. It is anticipated that the launch of TOKYO AIM will take place in spring 2009 subject to the granting of a license by the Financial Services Agency of Japan.
Adopting the AIM regulatory framework, the J-Nomad system will be central to the regulation of TOKYO AIM. J-Nomads will be selected and approved by TOKYO AIM and will be required to assess companies' suitability for the market both prior to admission and on an ongoing basis, guiding them in meeting their obligations as public companies. In addition to the support provided by the J-Nomad system, companies will also benefit from:
- a choice of either Japanese or English for the disclosure of information;
- the use of International Accounting Standards and US GAAP in addition to Japanese GAAP; and
- the potential to reduce costs as a result of a principles-based regulatory approach that does not demand compliance with J-SOX or the filing of quarterly accounts.
Atsushi Saito, President & CEO of the TSE, said: "We are delighted to be able to publish the rulebook for our new joint venture market, as well as to announce its official name: TOKYO AIM. Our strong partnership with the London Stock Exchange has enabled us to make steady progress towards the launch of TOKYO AIM. The new market will be a platform that attracts and connects companies and investors from around the world. The development of this new market structure in Tokyo is another step towards the further strengthening of Japan's competitiveness in the global capital markets."
Clara Furse, Chief Executive of the London Stock Exchange, said: "A stock exchange's central purpose is to ensure that companies have access to capital to finance innovation, growth and employment. TOKYO AIM will play an important role in providing that funding for growing companies in the region. In particular, it will provide a suitable framework in which they can develop long-term relationships with professional investors, making it easier for them to gain access to capital throughout their development; an advantage that has been underlined in recent months as public companies in a number of markets have increasingly turned to equity markets to raise additional capital through further issues".
To serve as a vehicle for the organisation and management of a growth market in Japan and related activities, TSE and the London Stock Exchange have formed a Japanese-incorporated company, held 51 per cent by TSE and 49 per cent by the London Stock Exchange. The London Stock Exchange has made an initial cash subscription of Yen 98.0 million (£728,100 on the date of subscription) for its interest in the company.