This article reflects information as of 2021. For the latest details, please contact us.
Written by: Qian Yunwen, Director / PR, tentus inc.
0. Prologue — There's Still Time. Hurry and Review!
Right off the bat: is your company affected by the market-segment review? The application period for selecting a new market segment is fast approaching! There are points to evaluate not only from an ESG perspective but from a DX perspective, too. Please let us support you! Even after the new markets begin, there should still be chances to apply. We can also handle long-term reforms. By all means, feel free to reach out first!
Inquiries via the tentus website:
Inquiries by email: Yohei Ashida: yohei.ashida@tentus.jp Qian Yunwen: inbun.sen@tentus.jp
The details of the new markets are described below. Please use it as a reference.
1. Background of the Market-Segment Review
Currently, the Tokyo Stock Exchange (hereafter "TSE") has four market segments: the First Section, the Second Section, Mothers, and JASDAQ (Standard and Growth).
These market segments stem from the fact that when the TSE and the Osaka Securities Exchange integrated their stock markets in 2013, each market's structure was maintained so as not to affect listed companies and investors.
However, these market segments have the following two issues:
The concept of each market segment is ambiguous, resulting in low convenience for many investors. Specifically, the positioning of the Second Section, Mothers, and JASDAQ overlaps, and the concept of the First Section is also unclear.
There is insufficient motivation for listed companies to continuously enhance corporate value. For example, because delisting criteria are significantly lower than new-listing criteria, there is no incentive to maintain the level of a new listing after listing. Also, because the criteria for moving to the First Section from other segments are more relaxed than the new-listing criteria for the First Section, the mechanism does not encourage active enhancement of corporate value after listing. In light of these issues, the TSE proceeded with its review of the market segments.
In light of these issues, the TSE proceeded with its review of the market segments and, on April 4, 2022, will restructure the current market segments into three: "Prime Market, Standard Market, and Growth Market."
(from JPX, above)
Image reference: https://www.ycg-advisory.jp/learning/jpx_market-restructure/ (Source) Number of listed companies from Nikkei, July 9, 2021, "About 30% of TSE First Section Not Eligible for 'Prime': Notified Amid Market Restructuring"
2. Market-Segment Selection Period
Ahead of the transition to the new market segments in April 2022, listed companies will proactively select the market segment they'll move to, based on each segment's concept and listing criteria. The market-segment selection period and the subsequent schedule are as follows.
2021/6/30: Transition reference date 2021/9/1–12/30: Application to select a new market segment 2022/1/11: Announcement of selection results 2022/4/4: Start of new market segments
If listing-maintenance criteria are not met 2021/9/1–12/30: Submit a plan for conforming to the new market segment's listing-maintenance criteria
TOPIX inclusion (condition: tradable-share market cap of 10 billion yen or more) 2021/7: 1st assessment 2022/10: 2nd assessment 2023/10: Re-assessment
3. Listing Criteria
Please see here for the listing-examination criteria related to the current market segments. https://www.jpx.co.jp/equities/market-restructure/market-segments/nlsgeu000005mhh3-att/Criteria_jp.pdf
(from JPX, above)
4. What to Do About the New Market Segments, Seen from a DX Perspective
"3. Listing Criteria" is of course important, but beyond that, the things to address from a DX perspective for the new market segments are very wide-ranging.
For example, in the case of the Prime Market, you'll need to be a company that centers on constructive dialogue with global investors, so the following become necessary:
- Multilingual site support
- Support for advanced accessibility
- Compliance with international data-protection rules, including GDPR
- High-strength security measures for servers, systems, and the like
- Regular information dissemination in multiple languages
- Content organization that accounts for international business customs and practices
- Establishment of an open inquiry point
The Standard Market and Growth Market likewise require actively disclosing information to the market, so implementing the measures listed above becomes a very important point.
Site renewals, internal systems, and internal-rule building that account for these don't tend to go well if you simply outsource them to an external vendor.
For DX, rather than leaving everything to an external vendor, it's very important to form a team within the company capable of driving DX forward.
5. About tentus inc.
tentus inc. (tentus) is a team strong in the DX domain that helps you form a DX team within your company. Experienced members join to support you, running alongside your DX team until it can operate independently.
Introduction to tentus (21 pages total)
- tentus's three strengths
- tentus's six business domains
- Track record in each business domain
- Owned media
- Key clients
- Contact
https://speakerdeck.com/19920930/tentushui-she-an-nei-20210524
👩💻 We currently have an online consultation window set up. If there's anything you're considering, please don't hesitate to consult us.
Notes:
- If there's any issue with the information posted, please contact us via the email above or the inquiry form on our website.
- The content is current as of October 30, 2021.
- Detailed case studies can be viewed in the "tentus Case Studies" magazine on our note.
https://note.com/tentus/m/m7ddd4b762796
Inquiries by email: Yohei Ashida: yohei.ashida@tentus.jp Qian Yunwen: inbun.sen@tentus.jp
Inquiries via the tentus website: https://tentus.jp
Inquiries via Messenger from our Facebook page: https://www.facebook.com/tentus
6. References
https://www.jpx.co.jp/equities/market-restructure/market-segments/index.html
https://www.ycg-advisory.jp/learning/jpx_market-restructure/