On May 19 2009, the Tokyo Stock Exchange (TSE) announced that it will revise its listing system, including its rules. These revisions are scheduled to be implemented in August 2009 with some exceptions.
Before the announcement, the Advisory Group on Improvements to the TSE Listing System published a proposal entitled For Creating A Better Market Environment Where Investors Feel Secure on April 23 2009. The proposed revisions to the listing system are based mainly on this proposal.
In the proposal, the Advisory Group mainly discussed private placements to third parties and reverse stock splits, in response to requests from investors.
Under the Companies Act a listed company may, in principle, issue new shares within the limit of its authorised shares and allocate them to a specific third party (a private placement) solely by a resolution of the board of directors. This allows listed companies to realise flexible financing. However, the...