Japan Association Of Securities Dealers Automated Quotation (Jasdaq) Defined

What is Japan Securities Dealers Association (Jasdaq) Automated Quotation?

The Japan Association of Securities Dealers Automated Quotation (Jasdaq) is an exchange that is part of the Japan Exchange Group (JPX). It focuses on emerging venture capital firms and, like the Nasdaq exchange, is a fully electronic trading platform.

Key points to remember

  • The Jasdaq is an exchange in Japan that focuses on emerging companies. It is one of many subsidiaries of the Japan Exchange Group.
  • The Jasdaq has its origins in an OTC platform founded in 1963.
  • Jasdaq’s listing requirements are less stringent than the first or second sections of the Tokyo Stock Exchange.

How Jasdaq Works

The precursor to the Jasdaq was a over the counter stock trading platform created by the Japan Securities Dealers Association in 1963. In 1991, this system was converted into an electronic market and renamed Jasdaq Securities Exchange in 2004. This transition was crucial for the Jasdaq, as it marked its official recognition as a stock exchange. Prior to 2004, the Jasdaq facilitated OTC trading but did not hold an official government stock exchange license.

Today, the Jasdaq is part of a strong ecosystem of scholarships operating in Japan, which include the Osaka Stock Exchange (OSE), the Nagoya Stock Exchange, the Sapporo Stock Exchange, the Fukuoka Stock Exchange and the so-called Mothers Stock Exchange, which focuses on emerging small businesses and is named after phrase “High Growth and Emerging Stocks Market.”

As has been the case in many countries, Japanese stock markets have suffered a series of consolidations during the last years. OSE acquired Jasdaq in 2010.In 2013, the OSE and Tokyo Stock Exchange (TSE) merged to form the Japan Exchange Group. Today, the JPX is the third largest stock exchange in the world behind the New York Stock Exchange and Nasdaq.

Real-world example of the Jasdaq

Companies must meet several criteria to be listed on the stock exchange in Japan, including a minimum number of shareholders, market capitalization, net assets and years of operation. Because of its focus on early-stage and venture capital companies, Jasdaq’s listing requirements are more lenient than those of TSE, which houses more established companies.

Within the JPX, there are four sections: the TSE First Section, the TSE Second Section, the Jasdaq, and the Mothers’ Exchange. Of these, the first TSE section has the strictest entry criteria, followed by the second TSE section. Jasdaq and Mothers exchanges are more accommodating in their signup requirements.