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Tokyo Stock Exchange announces two deregulatory measures in respect of delisting
Practical Law UK Legal Update 8-385-5633 (Approx. 2 pages)
Tokyo Stock Exchange announces two deregulatory measures in respect of delisting
by Atsumi & Partners
| Published on 02 Apr 2009 • Japan |
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As the financial crisis prompts mass delistings, the Tokyo Stock Exchange has responded by easing the rules on delisting to help companies that may temporarily be in financial difficulty.
Mainly as a result of the global financial crisis, 79 companies on the Tokyo Stock Exchange (TSE), (the largest stock exchange in Japan) delisted in 2008 - the second largest number to delist in the TSE's history. In addition, more than 20 companies delisted in the first few months of 2009.
In these circumstances, to avoid unnecessary delisting by companies in temporary financial difficulty because of the global financial crisis, the TSE announced, in the last few months, two deregulatory measures aimed at relaxing the criteria for companies to delist:
- On 13 January 2009, the TSE announced that it will continue to disapply the minimum amount of market capitalisation required under the Securities Listing Regulations. This disapplication was intended to be temporary (from October 2008 to December 2008) but will now continue to apply until the end of 2009 (Rule 311.1(4), Securities Listing Regulations).
- On 27 February 2009, the TSE announced that it had amended the Guidelines Concerning Listed Company Compliance, etc so that if a delisting company's audit or quarterly report does not contain an opinion or conclusion about the audit, due mainly to uncertainties about the company being a going concern, the TSE will examine the delisting of the company after examining the company's next audit or quarterly report (Rule 601.1.(11)b, Securities Listing Regulations and Chapter IV, Article 3, Guidelines Concerning Listed Company Compliance).
Also, the TSE has announced that it will endeavour to ensure fair administration of the delisting process in appropriate cases (for example, where a company has a severe problem with its management).