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CandleFocus Glossary Editor
The Japan Association of Securities Dealers Automated Quotation (JASDAQ) is a stock exchange in Japan that focuses on offering trading opportunities to smaller, emerging companies. It is one of the subsidiary exchanges of the Japan Exchange Group, and traces its origins back to an over-the-counter (OTC) trading platform founded in 1963.
In terms of listing requirements, JASDAQ can be seen as having different requirements to the two larger sections of the Tokyo Stock Exchange (TSE). The smaller exchange does not require companies to have the same minimum capital stock and free float as the TSE's First and Second sections. This means that companies are able to access the JASDAQ quicker than they can the larger exchanges.
JASDAQ has one section of its exchange that is unlisted, known as the Jasdaq Securities Exchange. This section was created to allow smaller companies to trade in Japan's markets without being listed on the exchange, and it caters to companies with limited capital and free float, ones which would not be eligible to be listed on either the First or Second sections of TSE.
The exchange also has a segment for foreign companies, which allow for companies from outside Japan to join the exchange and be traded in the local market. This offers companies the advantage of being able to raise capital from the local market without having to issue shares from the home country. It is seen as particularly attractive to companies from emerging markets, who lack the resources for listing on the gigantic Tokyo Stock Exchange.
The JASDAQ also provides an opportunity to investors, with the potential for high returns due to the early stage of these companies. Investors get the opportunity to participate in the early stage growth of emerging companies, and take part in activities such as liquidity support, capital increases, and convertible bond issues.
In conclusion the Japan Association of Securities Dealers Automated Quotation provides a much needed listing opportunity to small and emerging companies, and allows investors to gain access to high risk, high return investment opportunities. It is a vital part of Japan's financial market, and will likely remain as a significant source of capital for small businesses in the future.
In terms of listing requirements, JASDAQ can be seen as having different requirements to the two larger sections of the Tokyo Stock Exchange (TSE). The smaller exchange does not require companies to have the same minimum capital stock and free float as the TSE's First and Second sections. This means that companies are able to access the JASDAQ quicker than they can the larger exchanges.
JASDAQ has one section of its exchange that is unlisted, known as the Jasdaq Securities Exchange. This section was created to allow smaller companies to trade in Japan's markets without being listed on the exchange, and it caters to companies with limited capital and free float, ones which would not be eligible to be listed on either the First or Second sections of TSE.
The exchange also has a segment for foreign companies, which allow for companies from outside Japan to join the exchange and be traded in the local market. This offers companies the advantage of being able to raise capital from the local market without having to issue shares from the home country. It is seen as particularly attractive to companies from emerging markets, who lack the resources for listing on the gigantic Tokyo Stock Exchange.
The JASDAQ also provides an opportunity to investors, with the potential for high returns due to the early stage of these companies. Investors get the opportunity to participate in the early stage growth of emerging companies, and take part in activities such as liquidity support, capital increases, and convertible bond issues.
In conclusion the Japan Association of Securities Dealers Automated Quotation provides a much needed listing opportunity to small and emerging companies, and allows investors to gain access to high risk, high return investment opportunities. It is a vital part of Japan's financial market, and will likely remain as a significant source of capital for small businesses in the future.