The Evolution and Legacy of Jasdaq
The Japan Association of Securities Dealers Automated Quotation (Jasdaq) was an innovative and transformative stock exchange in Japan that focused primarily on emerging venture companies. Initially an independent entity, Jasdaq eventually merged with the Tokyo Stock Exchange (TSE) in 2013 and was phased out entirely in 2022, marking the end of an era. Much like the Nasdaq in the United States, Jasdaq operated as a fully electronic trading platform.
Key Takeaways
- Jasdaq was a significant stock exchange in Japan aimed at serving emerging companies and was affiliated with the Japan Exchange Group.
- Its origins trace back to an Over-The-Counter (OTC) trading platform established in 1963.
- Jasdaq had less stringent listing requirements compared to the TSE, making it accessible to earlier-stage businesses.
- Jasdaq ceased its operations when Tokyo Stock Exchange consolidated its sectors on April 4, 2022.
How Jasdaq Operated
The roots of the Jasdaq can be traced to an OTC stock trading platform launched in 1963 by the Japan Securities Dealers Association. This system underwent a major transformation in 1991, when it transitioned to an electronic market, and eventually gained formal recognition as the Jasdaq Securities Exchange in 2004. Prior to this, it facilitated OTC trades but did not operate under a formal stock exchange license granted by the government.
To list on Jasdaq, companies were required to meet specific criteria, such as a minimum number of shareholders, market capitalization, net assets, and years of operation. Compared to the TSE, which housed more mature businesses, Jasdaq offered more lenient listing requirements to support early and venture-stage companies.
Closure of Jasdaq
Over the years, Japan’s stock exchanges have seen several consolidations. Jasdaq was acquired by the Osaka Securities Exchange (OSE) in 2008. Subsequently, OSE and TSE merged in 2013, forming the Japan Exchange Group (JPX), which is the world’s fifth largest exchange as of 2023. Within JPX, there were initially four sections: TSE First Section, TSE Second Section, Jasdaq, and the Mothers Exchange. In a major restructuring effort, these sections were consolidated in 2022 into three new sections: the prime market, the standard market, and the growth market. Consequently, Jasdaq ceased trading on April 4, 2022.
What Was the Jasdaq-Top20?
The Jasdaq-Top20 index consisted of the top 20 stocks listed on the Jasdaq exchange, evaluated based on criteria such as market capitalization, net profit, and dividends. With the closure of Jasdaq, the Jasdaq-Top20 index was also discontinued on April 4, 2022.
Current Landscape: Tokyo Stock Exchange
As of February 2024, the Tokyo Stock Exchange boasts 3,930 listed companies with a combined market capitalization of 977 trillion yen ($6.6 trillion). This diverse marketplace plays a crucial role in global finance.
Trading Japanese Stocks
To trade stocks listed on Japanese exchanges, one generally needs to be a Japanese citizen or permanent resident. However, international investors can still participate through online brokers if the stocks are available via an American Depositary Receipt (ADR).
The Bottom Line
Jasdaq played an essential role as an electronic stock exchange with a prime focus on venture-backed companies, paralleling the function of Nasdaq in the U.S. After an impactful run, it merged into the Tokyo Stock Exchange and was consolidated with other market sections in 2022. Jasdaq’s legacy continues to influence the Japanese stock market.
Related Terms: OTC trading, market capitalization, Japanese Securities Dealers Association, Nasdaq, Tokyo Stock Exchange, JPX.
References
- Japan Exchange Group. “History: Osaka Exchange: History of Jasdaq Securities Exchange, Inc.”
- Japan Exchange Group. “History: Tokyo Stock Exchange”.
- Visual Capitalist. “Mapped: The Largest Stock Exchanges in the World”.
- Japan Exchange Group. “Market Restructuring”.
- Tokyo Stock Exchange. “Jasdaq Top 20”. Page 1 of PDF.
- Japan Exchange Group. “Number of Listed Companies/Shares”.
- Statista.“Market Capitalization of Companies Listed on the Tokyo Stock Exchange”.
