Trading on TSE’s restructured market segments to begin on Monday

Trading on the revamped market segments of the Tokyo Stock Exchange begins on Monday to boost investment from around the world and invigorate the Japanese economy.

The TSE has restructured its market into three segments, Prime, Standard and Growth.

The Prime Market is geared towards internationally competitive companies that maintain a higher quality of corporate governance and are committed to sustainable growth.

Its registration criteria are stricter than those of the 1st section in the previous structure. But more than 80%, or more than 1,800 of the companies listed on the 1st section, have been transferred to the Prime Market.

Among Prime Market businesses, some missed one or more listing criteria, but were granted access after submitting business improvement plans.

These companies are hoping for certain benefits, including a better chance of raising funds from a wider range of investors.

The standard market is for companies that are expected to grow steadily despite having a lower market capitalization than the main market.

More than 330 companies moved from the 1st section to the standard market in part because they believe they will be able to execute bolder business plans than in the main market. More than 1,100 companies transferred from three other previous market segments.

The Growth Market is for startups that have strong growth potential despite relatively high investment risk.

Competition between stock exchanges around the world is intensifying.

The World Federation of Exchanges says the total market capitalization of TSE-listed companies stood at more than $6.1 trillion at the end of February.

The figure was well below that of the New York Stock Exchange at $26.1 trillion, the most in the world. The TSE is also behind the Shanghai Stock Exchange at $7.8 trillion.

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