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Japan Association of Securities Dealers Automated Quotation

Definition

The Japan Association of Securities Dealers Automated Quotation, commonly known as JASDAQ, is a securities market in Japan that focuses on emerging and start-up companies. It operates as an electronic trading platform, connecting investors to these companies for stock trading. JASDAQ serves as an alternative to the larger Tokyo Stock Exchange, providing opportunities for smaller businesses and investors to participate in the market.

Phonetic

The phonetics of the keyword “Japan Association of Securities Dealers Automated Quotation” are:Japan: jəˈpænAssociation: əˌsoʊʃiˈeɪʃənof: əv, ɒfSecurities: sɪˈkjʊrɪtizDealers: ˈdilərzAutomated: ˈɔːtəˌmeɪtɪdQuotation: kwoʊˈteɪʃən

Key Takeaways

  1. The Japan Association of Securities Dealers Automated Quotation, or JASDAQ, is a securities exchange platform primarily focused on small to medium-sized businesses and start-up companies in Japan. The platform enables these companies to list their shares for trading in the public market, helping them further their growth and raise capital.
  2. JASDAQ began its operations in 1963 and was initially a non-profit organization. However, in 2004, it merged with the Osaka Securities Exchange, forming a for-profit corporation called JASDAQ Securities Exchange, Inc. In 2013, JASDAQ was integrated into the Tokyo Stock Exchange, functioning as a part of their market structure.
  3. As an exchange platform that specializes in smaller businesses, JASDAQ provides a unique opportunity for investors to invest in high-growth businesses before they are noticed by the larger financial market. This offers potentially higher rewards to investors, though it also comes with increased risks, as these companies are less established and potentially more vulnerable to market fluctuations.

Importance

The Japan Association of Securities Dealers Automated Quotation (JASDAQ) is an important financial term as it represents a vital securities exchange platform in Japan, catering specifically to small- and medium-sized enterprises that may not meet the listing requirements of larger exchanges like the Tokyo Stock Exchange. Established primarily to enhance the growth and development of these companies, JASDAQ plays a crucial role in providing market liquidity, price discovery, and trading opportunities to both local and international investors. Furthermore, it fosters innovation and promotes competitiveness within the Japanese economy by offering emerging businesses the opportunity to raise capital and gain exposure, thus making it a significant aspect of Japan’s financial landscape.

Explanation

The Japan Association of Securities Dealers Automated Quotation (JASDAQ) serves a significant role in the Japanese financial market by catering to small and medium-sized enterprises (SMEs) as a key platform for raising capital. In this way, it enables these companies to access the financial resources they need in order to thrive, expand their businesses, and ultimately contribute to the nation’s economic growth. JASDAQ encourages market liquidity and attracts investors looking for opportunities in innovative, high-growth sectors, which are often represented by SMEs. As a result of this, JASDAQ has become a critical venue for fostering the development and growth of emerging companies across various industries, including technology, healthcare, and consumer goods.

In order to facilitate its purpose, JASDAQ operates as an electronic trading platform, where it efficiently executes trades and disseminates information about listed stocks to investors. By utilizing advanced technology systems, JASDAQ ensures a seamless and transparent trading experience for the market participants. This transparency not only bolsters investor confidence but also helps the listed companies to foster stronger relationships with their shareholders. Furthermore, the platform offers comprehensive services and support to its listed companies, ranging from initial public offerings (IPOs) guidance to nurturing and promoting investor relations. Ultimately, JASDAQ stands as an essential component of the Japanese financial market by stimulating investor interest in SMEs and supporting the growth of these enterprises.

Examples

The Japan Association of Securities Dealers Automated Quotation (JASDAQ) is a securities exchange platform in Japan focused primarily on emerging and smaller companies, somewhat similar to the NASDAQ stock market in the United States. Here are three real-world examples related to JASDAQ:

1. CyberAgent Inc.: Established in 1998, CyberAgent is a Tokyo-based media company that operates in various sectors, including digital advertising and social networking services. In April 2000, CyberAgent got listed on JASDAQ, which enabled it to raise capital and achieve rapid growth. Today, it is one of the leading internet advertising companies in Japan.

2. SanBio: Founded in 2001, SanBio is a regenerative medicine company that develops cell-based therapies for neurological disorders such as stroke and traumatic brain injury. It was initially listed on JASDAQ in November 2013, which gave the company greater access to capital and increased visibility for its innovative research. SanBio has since been relisted on the Tokyo Stock Exchange’s Mothers index.

3. JASDAQ acquisition by Tokyo Stock Exchange (TSE): In 2010, the JASDAQ merged with the Osaka Securities Exchange (OSE), forming the JASDAQ Securities Exchange. Later, in 2013, the Tokyo Stock Exchange acquired OSE, including JASDAQ. This acquisition led to an integration of the market systems, providing investors with streamlined access to a broader range of investment opportunities.

Frequently Asked Questions(FAQ)

What is the Japan Association of Securities Dealers Automated Quotation (JASDAQ)?

JASDAQ is a stock exchange in Japan that was established in 1963 to facilitate the trading of securities, primarily targeting smaller companies and start-ups that may not meet the listing requirements for the Tokyo Stock Exchange (TSE). It has since merged with the Osaka Securities Exchange in 2011 and now operates under the Japan Exchange Group (JPX).

How does JASDAQ differ from other stock exchanges in Japan?

JASDAQ primarily focuses on small to medium-sized companies and start-ups, providing a market for them to raise capital through the issuance of shares. It is known for its relatively lenient listing requirements compared to the Tokyo Stock Exchange, making it more accessible for smaller companies to list their shares.

What are the listing requirements for JASDAQ?

The listing requirements for JASDAQ include a minimum market capitalization of 1 billion yen, at least 500 shareholders, and a continuous operating period of 3 years for businesses (however, exceptions may apply for advanced technology companies). Additionally, companies must meet specific profitability requirements and maintain a certain level of corporate governance.

How can investors trade on JASDAQ?

Investors can trade on JASDAQ through registered brokerages or online trading platforms that have access to the JASDAQ market. These brokerages provide investors with trading tools, research, and analytical data needed to make informed investment decisions.

What types of stocks are listed on JASDAQ?

JASDAQ lists a wide range of Japanese companies from various industries, such as technology, healthcare, consumer goods, finance, and more. It is particularly known for attracting smaller, innovative, and high-growth companies that may not yet meet the listing requirements of the Tokyo Stock Exchange.

Is JASDAQ open to foreign investors?

Yes, foreign investors can invest in JASDAQ-listed companies through brokerage firms and trading platforms that offer access to the Japanese market. Some international brokerages may also offer the option to trade directly on JASDAQ.

What are the trading hours for JASDAQ?

JASDAQ follows the same trading hours as the Tokyo Stock Exchange. The market is open from 9:00 AM to 11:30 AM (Japan Standard Time) for the morning session and from 12:30 PM to 3:00 PM for the afternoon session. The market is closed on weekends and on Japanese national holidays.

Related Finance Terms

  • Electronic trading platform
  • Over-the-counter (OTC) market
  • Stock exchange
  • Market maker
  • Financial instruments

Sources for More Information

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