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Googlawi / Jiaqi Zhou
What Was the Japan Association of Securities Dealers Automated Quotation (Jasdaq)?
The Japan Association of Securities Dealers Automated Quotation (Jasdaq) was an automated stock exchange based in Japan that focused on emerging venture companies. Originally an independent stock exchange, it was merged into the Tokyo Stock Exchange in 2013 and phased out in 2022. Like the Nasdaq exchange, it was a fully electronic trading platform.
KEY TAKEAWAYS
- The Jasdaq was a stock exchange in Japan that focused on emerging companies. It was one of several subsidiaries of Japan Exchange Group.
- The Jasdaq traced its origins to an OTC platform founded in 1963.
- The Jasdaq's listing requirements were less stringent than the first or second sections of the Tokyo Stock Exchange.
- The Jasdaq was phased out when the Tokyo Stock Exchange consolidated its sectors on April 4, 2022.
How the Jasdaq Worked
The precursor to the Jasdaq was an over-the-counter stock trading platform created by the Japan Securities Dealers Association in 1963. In 1991, this system was converted to an electronic market and rebranded as the Jasdaq Securities Exchange in 2004. This transition was pivotal for the Jasdaq, as it marked its formal recognition as a stock exchange. Before 2004, the Jasdaq facilitated OTC trades but did not hold a formal stock exchange license from the government.
Companies had to meet several criteria to list on a stock exchange in Japan, including a minimum number of shareholders, market capitalization, net assets, and years of operation. Because of its focus on early and venture-stage businesses, Jasdaq's listing requirements were more lenient than the TSE, which hosted more established businesses.
The Jasdaq formed part of a robust ecosystem of stock exchanges operating in Japan, which include the Osaka Exchange (OSE), the Nagoya Stock Exchange, the Sapporo Securities Exchange, and the Fukuoka Stock Exchange.
Closure of the Jasdaq
As has been true in many countries, Japan's stock exchanges have undergone a series of consolidations. The OSE acquired the Jasdaq in 2008. In 2013, the OSE and Tokyo Stock Exchange (TSE) merged to form the Japan Exchange Group. The JPX is the world's fifth largest exchange as of 2023, behind the New York Stock Exchange, Nasdaq, Euronext, and the Shanghai Stock Exchange.
Within the JPX, there were four sections: the TSE First Section, the TSE Second Section, the Jasdaq, and the Mothers Exchange. However, these four sections were consolidated when the TSE was restructured into three sections: the prime market, the standard market, and the growth market. As the components of the Jasdaq were folded into the new sections, the Jasdaq stopped trading on April 4, 2022.
What Was the Jasdaq-Top20?
The Jasdaq-Top20 was an index comprised of the top 20 stocks listed on the Jasdaq exchange, based on factors like market capitalization, net profit, and dividends. It was discontinued with the closure of the Jasdaq on April 4, 2022.
How Many Companies Are Listed on the Tokyo Stock Exchange?
As of February, 2024, there were 3,930 listed companies on the Tokyo Stock Exchange. They have a combined market capitalization of 977 trillion yen ($6.6 trillion).
How Do You Trade Japanese Stocks?
In order to trade stocks on Japanese stock exchanges, a trader must be able to demonstrate that they are a Japanese citizen or permanent resident. However, foreigners may be able to trade shares in Japanese companies through an online broker if they are listed on an American Depositary Receipt.
The Bottom Line
The Jasdaq was an electronic stock exchange with a focus on venture-backed companies, similar to the NASDAQ. Originally an independent exchange, it was merged into the Tokyo Stock Exchange and consolidated with other marketplaces in 2022.