The Tokyo and London stock exchanges may open a new bourse strictly for institutional, corporate and other professional investors later this month, the TSE said Thursday.
The new bourse, Tokyo AIM (Alternative Investment Market) will not require its listed companies to release financial results on a quarterly basis and prepare disclosure statements in Japanese, freeing them from the costly complications, it said.
Instead, the bourse will authorize listed firms to release results only on a half-year basis and compile disclosure dossiers in English to pave the way for Japanese and Asian companies with high growth potential to raise funds more easily, it said.
But the brokerages that would be obliged to examine the qualifications of the listed firms have remained halfhearted about the whole project because it is likely they will be held accountable for any problems that arise, and no company has yet stepped forward as a debutant for the market, according to brokerage officials.
The bourse will be modeled on the LSE’s AIM for smaller, growing companies. It was founded in 1995. The TSE will put up 51 percent of the capital and the LSE will shoulder the remainder.
Some of the companies that have listed on relatively new bourses for startups, including the TSE’s Mothers, have been implicated in several accounting fraud and other high-profile scandals in recent years.
This has forced the bourses to stiffen regulations and implement tougher in-house controls to protect investors. But the tougher standards and flagging share prices have scared away many companies from listing.
Mindful of these developments, Tokyo AIM has decided to soften requirements associated with listing and limit mandatory compilation of disclosure dossiers to twice a year, the TSE said.
It will let listing firms compile results in accordance with internationally accepted accounting standards, while luring foreign companies seeking to raise funds in Japanese capital markets into its fold, thus vying with stock markets in Hong Kong and Singapore.
In addition, Tokyo AIM will allow companies to list nonvoting preferred shares, enabling them to raise funds without the risk of shareholders interfering in management by taking equity stakes in them.
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