2003 JAPAN LAW: OVER THE COUNTER MARKET TO CONVERT TO REGULAR EXCHANGE
Keywords:  Stock Exchange, over-the-counter Market, JASDAQ, Tokyo Stock Exchange
Copyright 2004. All rights reserved Attorney Roderick H. Seeman
===============================================================
Japan’s over-the-counter (OTC) market, JASDAQ, will be converting itself into a regular stock exchange during 2004. Under its present system trades on its market may not involve futures, options, or margin trading that are permissible for regular exchanges. Traditionally the JASDAQ market has been where many firms started their initial listing for public trading of their shares and often they then move up to the Tokyo Exchange if their market develops adequately. Even though the number of firms traded on the JASDAQ numbers somewhat less than half of the number traded on the Tokyo Stock Exchange, the total market capitalization of JASDAQ in 2003 reached 11 trillion yen compared to 320 trillion yen for the Tokyo Stock exchange. The Osaka Stock Exchange, Japan’s 2nd ranking regular stock exchange made a marriage proposal for integration or merger with the JASDAQ market in order to provide greater competition against the Tokyo Exchange’s overwhelming market share. Other exchanges such as Sapporo, Nagoya and Fukuoka, have also expressed interest in similar arrangements in order to compete with the Tokyo market.