The watchdog Financial Services Agency (FSA) said on Monday it had ordered the Tokyo Stock Exchange (TSE), Japan's biggest bourse, to improve its procedures on new listings.
It said the action followed the TSE's handling of the listing of a real estate firm which later lost its licence.
"While these shortcomings do not directly contravene the Securities Exchange Act or TSE rules, they risk losing the trust of investors and there is a need to improve the TSE's listing procedures and management system," the FSA said in a statement.
The real estate firm, Ardepro Co Ltd, listed its shares on the TSE's Mothers market for start-ups on March 18. It disclosed on April 26 that its licence had been revoked on April 8.
The FSA said the Toyko bourse failed to examine the risk of Ardepro losing its licence and to widely notify investors of the incident after the company disclosed that its licence had been revoked.
Ardepro lost its licence after its president was given a suspended sentence for a traffic violation, the FSA said. It regained the licence on May 21.
"You could argue that it is impossible to know about a traffic violation by the president," an FSA official told reporters.
"However, if you examined it with a sense of urgency, you would be able to find out unless the company in question lied. Unless you discover these things, investors could be harmed when they surface after the listing."
Last August, Japan's financial regulator ordered the Osaka Securities Exchange (OSE), the nation's second-largest bourse after the TSE, to halt part of its operations, including its preparation for its own initial public offering, for three months.
That was the first administrative penalty against a Japanese bourse in the post-war period.
The move by the FSA against the Osaka bourse - the main venue for trading equities derivatives in Japan - followed an accusation against one of its former executives of market manipulation.
Comments
Comments are closed.