Japan Association of Securities Dealers Automated Quotation

Introduction

When it comes to investing in the stock market, there are numerous exchanges around the world where investors can buy and sell securities. One such exchange is the Japan Association of Securities Dealers Automated Quotation, commonly known as JASDAQ. In this article, we will explore what JASDAQ is, how it operates, and why it is an important player in the Japanese financial market.

What is JASDAQ?

JASDAQ is a stock exchange in Japan that focuses on listing and trading shares of smaller and emerging companies. It was established in 1991 as a subsidiary of the Osaka Securities Exchange (OSE) and became an independent exchange in 2004. JASDAQ aims to provide a platform for companies with growth potential to raise capital and expand their businesses.

How Does JASDAQ Operate?

JASDAQ operates similarly to other stock exchanges, but with a focus on smaller companies. Here are some key aspects of how JASDAQ operates:

• Listings: Companies that wish to be listed on JASDAQ must meet certain criteria, including financial stability, corporate governance standards, and a minimum market capitalization. JASDAQ provides a platform for these companies to raise capital by issuing shares to investors.
• Trading: Once listed, shares of companies on JASDAQ can be bought and sold by investors. The exchange operates a computerized trading system that matches buy and sell orders, ensuring fair and efficient trading.
• Regulation: JASDAQ is regulated by the Financial Services Agency (FSA) of Japan, which ensures that the exchange operates in a fair and transparent manner. The FSA sets rules and regulations that govern the listing and trading of securities on JASDAQ.

Why is JASDAQ Important?

JASDAQ plays a crucial role in the Japanese financial market for several reasons:

• Supporting Small and Emerging Companies: JASDAQ provides a platform for smaller and emerging companies to raise capital and grow their businesses. These companies often have limited access to traditional sources of financing, such as bank loans, and rely on the stock market to fund their expansion plans.
• Job Creation: By supporting small and emerging companies, JASDAQ contributes to job creation in Japan. These companies are often at the forefront of innovation and technology, and their growth leads to the creation of new job opportunities.
• Diversification: JASDAQ offers investors the opportunity to diversify their portfolios by investing in smaller companies. By investing in a range of companies across different sectors, investors can spread their risk and potentially achieve higher returns.
• Economic Growth: The success of small and emerging companies listed on JASDAQ contributes to overall economic growth in Japan. These companies drive innovation, create new products and services, and contribute to the country's competitiveness in the global market.

Case Study: Success Stories on JASDAQ

To illustrate the impact of JASDAQ, let's take a look at a couple of success stories:

• Keyence Corporation: Keyence Corporation, a manufacturer of automation sensors and measuring instruments, was listed on JASDAQ in 1993. Since then, the company has experienced significant growth and is now one of the largest companies listed on the Tokyo Stock Exchange. Keyence's success story demonstrates how JASDAQ can provide a platform for small companies to become industry leaders.
• MonotaRO Co., Ltd.: MonotaRO, an e-commerce company that sells maintenance, repair, and operations (MRO) products, was listed on JASDAQ in 2006. The company has experienced rapid growth and has expanded its operations internationally. MonotaRO's success highlights how JASDAQ can support companies in the e-commerce sector, which has become increasingly important in recent years.

Conclusion

JASDAQ, the Japan Association of Securities Dealers Automated Quotation, is an important stock exchange in Japan that focuses on listing and trading shares of smaller and emerging companies. It provides a platform for these companies to raise capital, grow their businesses, and contribute to job creation and economic growth in Japan. By investing in JASDAQ-listed companies, investors can diversify their portfolios and potentially benefit from the success of these smaller companies. JASDAQ's success stories, such as Keyence Corporation and MonotaRO Co., Ltd., demonstrate the positive impact the exchange can have on companies and the overall economy. As Japan continues to foster innovation and entrepreneurship, JASDAQ will play a vital role in supporting the growth of small and emerging companies in the country.