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Tokyo Stock Exchange to reduce first section listings by 30%

Market cap requirement to be raised and English disclosures mandated

Companies on the first section of the TSE might have to maintain a market capitalization of 25 billion yen ($223.8 million), up from 2 billion yen currently.

TOKYO -- The Tokyo Stock Exchange will reduce the number of companies listed on its first section, potentially by 30%. The section currently has over 2,100 listings.

The bourse plans to raise the level of market capitalization required of listed companies and mandate disclosures in English.

The plan is aimed at boosting the competitiveness of the Japanese market by clearly defining the section as a premier market that lists blue-chip companies.

Medium-size and emerging companies, currently dispersed in the second section and Jasdaq and Mothers markets, will be consolidated into either "emerging" or "standard" sections.

The plan will be incorporated into a blueprint for the government's growth strategy to be released in June.

TSE representatives are scheduled to explain the reform plan at a meeting of the Financial System Council, an advisory panel to the minister of state for financial services, to be held later this month.

The bourse is considering a proposal to require companies on the first section to maintain a market capitalization of 25 billion yen ($223.8 million), up from 2 billion yen currently. Over 30 percent of the companies currently on the first section would not meet the new minimum, based on their current market capitalization.

The lack of corporate information in English is seen as having been a major hurdle for investing in Japanese stocks. Therefore, quarterly disclosure in English will be required of first-section companies. Only about 35% of them currently disclose information in English.

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