What is the 'Japan Association Of Securities Dealers Automated Quotation - Jasdaq'?

The Japan Association Of Securities Dealers Automated Quotation (Jasdaq) is one of the Japanese stock markets that falls under the Tokyo Stock Exchange (TSE). It is an electronic security exchange based in Tokyo, Japan. It was originally an over-the-counter market and, in 1991, it became an electronic trading platform featuring an automated quotation system similar to the Nasdaq.

BREAKING DOWN 'Japan Association Of Securities Dealers Automated Quotation - Jasdaq'

In 1963, the Japan Securities Dealers Association created an over-the-counter system for security trading. In 1991, the association launched the Jasdaq system, a Japanese stock market that converted its current operations into an electronic security trading market. In 2004, the corporation changed its name to the Jasdaq Securities Exchange and was formally recognized as a securities exchange.

Japan's Stock Markets

Companies must meet the criteria established by a stock market in Japan to be listed by that market. The criteria include the number of shareholders of the company, market capitalization, net assets and the number of years the company has been established. The Tokyo Stock Exchange is one of the world's three largest markets and has four stock markets, TSE First Section, TSE Second Section, JASDAQ and Mothers, TSE First Section has the most strict rules and criteria followed by TSE Second Section. A leading company that is stable is likely to belong to either the TSE First or Section Section.

Jasdaq, like Mothers, lists emerging venture companies. The criteria or these markets are easier to meet for companies that are still in their establishment and early growth stages. In addition to the TSE, other markets include the Osaka Exchange, the Nagoya Stock Exchange, the Sapporo Stock Exchange, the Fukuoka Stock Exchange, each with its own stock market. The majority of leading Japanese companies, however, belong to the TSE stock market.

Jasdaq's Formation

Jasdaq was originally an over-the-counter securities market that sold stocks at the headquarters of securities companies and positioned them to support securities exchanges; it was not an exchange itself. In 2004, the company received a stock exchange license, and the operating company's name changed from JASDAQ Corporation to JASDAQ Stock Exchange, Inc.

However, since then, the market for emerging companies, such as those listed on Jasdaq and Mothers, has increased. The Jasdaq has proposed integration with the Osaka Securities Exchange. The Osaka Securities Exchange was integrated into the TSE in 2013.

Despite the increase in emerging markets, Reuters reported that the TSE was not considering merging the Jasdaq and Mothers markets, after a newspaper had claimed that the Japan Exchange Group, operator of the Tokyo Stock Exchange, had been considering a merger to stimulate the market and its investors.

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