JASDAQ

Definition

JASDAQ is a Japanese over-the-counter stock exchange that primarily focuses on small and medium-sized enterprises (SMEs) and emerging companies. It provides a platform for these businesses to raise capital through public offerings and trading of their shares, contributing significantly to the growth and innovation within Japan's economy. By offering a more accessible entry point into the public market, JASDAQ plays a crucial role in financial regulations aimed at fostering entrepreneurship and supporting the development of SMEs in Japan.

5 Must Know Facts For Your Next Test

1. JASDAQ was established in 1999 as a separate market segment under the Japan Securities Dealers Association.
2. It is known for its less stringent listing requirements compared to major exchanges, making it easier for smaller companies to go public.
3. JASDAQ operates under the oversight of the Financial Services Agency (FSA) of Japan, which enforces regulations to protect investors.
4. The exchange has been integral in promoting innovation by providing SMEs with access to necessary funding through equity markets.
5. In 2013, JASDAQ became part of the Tokyo Stock Exchange Group, enhancing its visibility and trading capabilities.

Review Questions

• How does JASDAQ differ from more traditional stock exchanges like the Tokyo Stock Exchange in terms of listing requirements and company focus?
  • JASDAQ primarily focuses on small and medium-sized enterprises (SMEs), offering less stringent listing requirements compared to traditional exchanges like the Tokyo Stock Exchange. This allows smaller companies, which may struggle to meet the rigorous criteria of larger exchanges, to access public capital markets. The relaxed regulations help foster innovation and growth within these businesses, making JASDAQ an important platform for emerging companies in Japan's economy.
• Discuss the regulatory framework surrounding JASDAQ and how it ensures investor protection while promoting entrepreneurship.
  • JASDAQ operates under the oversight of the Financial Services Agency (FSA), which enforces regulations designed to protect investors while allowing for entrepreneurial growth. The FSA monitors trading activities and ensures compliance with securities laws to maintain market integrity. Additionally, JASDAQ's listing requirements are tailored to support SMEs, which helps create an environment conducive to raising capital without imposing overly burdensome regulations that might stifle innovation.
• Evaluate the impact of JASDAQ on Japan's economic landscape, especially regarding the growth of SMEs and innovation within various sectors.
  • JASDAQ has significantly influenced Japan's economic landscape by providing a vital funding avenue for small and medium-sized enterprises (SMEs), which are crucial for job creation and innovation. The exchange's focus on emerging companies enables them to access capital markets more easily, thereby fostering new ideas and products across various sectors. As a result, JASDAQ has not only stimulated economic growth but has also contributed to enhancing Japan's competitiveness in the global market by supporting a diverse range of innovative startups and SMEs.

Related terms

Tokyo Stock Exchange: The largest stock exchange in Japan, where stocks of major corporations are traded.

Securities and Exchange Surveillance Commission: The Japanese regulatory body responsible for overseeing securities transactions and ensuring market integrity.

IPO (Initial Public Offering): The process by which a private company offers shares to the public for the first time to raise capital.