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Tokyo Stock Exchange

I Overview of Market System

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1 Overview of TOKYO PRO Market

Established by Tokyo Stock Exchange, Inc. (hereinafter "TSE"), TOKYO PRO Market is a specified

financial instruments exchange market (namely market for professionals) specializing in stocks, etc.

TOKYO PRO Market adopts the J-Adviser system based on the Nominated Advisers (Nomads) system

of AIM market established by London Stock Exchange.

(Table) Comparison of Listing System, etc. of TOKYO PRO Market and Mothers

Item TOKYO PRO Market Mothers

Disclosure English or Japanese Japanese

Listing criteria No numerical criteria

Numerical criteria for the number of

shareholders and market

capitalization, etc.

Period from listing

application to listing

approval

10 business days

(J-Adviser to express intent

before listing application)

2 months

(standard examination period)

Audit period before

listing Last 1 year Last 2 years

Internal control report Optional Mandatory

Quarterly disclosure Optional Mandatory

Investors Specified investors, etc.

(i.e., professional investors) No restriction


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(1) Overview of Specified Financial Instruments Exchange Market

A specified financial instruments exchange market is generally called a "market for professionals" due

to its rules to prohibit general investors from buying stocks, and the 2008 amendments to the Financial

Instruments and Exchange Act allowed for the establishment of such markets. TSE established TOKYO

PRO Market (stocks) and TOKYO PRO-BOND Market (bonds).

(2) Professional Investors

TOKYO PRO Market, a specified financial instruments exchange market, prohibits stock buying by

general investors excluding specified investors, etc. in accordance with the Financial Instruments and

Exchange Act and the regulations of TSE. Investors that can buy stocks at TOKYO PRO Market are

called "specified investors, etc. (namely "professional investors")" and mainly classified into specified

investors and certain non-residents. In addition, specified investors are classified into those defined as

specified investors by relevant laws and those that meet certain requirements and can become specified

investors by filing with their securities companies (namely "deemed" specified investors).

(Table) Overview of Specified Investors, etc.

Item Example

Specified investor Qualified institutional investor (financial institutions, etc.),

national government, Bank of Japan

Specified investor (transferrable to

general investor)

Listed company, stock company with capital of 500

million yen and more

"Deemed" specified investor

Stock company other than a specified investor, individual

with financial assets or net assets worth 300 million yen

and more

Non-resident

Individual who does not have an address or residence in

Japan, corporation that does not have a principal place of

business in Japan

General investors are not prohibited from selling stocks on a specified financial instruments exchange

market. Therefore, general investors that own stocks before listing can sell such stocks on TOKYO PRO

Market. Also, the relevant laws allow for exceptions where general investors can buy stocks.


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(3) J-Adviser

TOKYO PRO Market adopts the "J-Adviser system" based on the Nominated Advisers (Nomads)

system of AIM market established by London Stock Exchange. The 2008 amendments to the Financial

Instruments and Exchange Act enabled the development of the J-Adviser system, and TSE entrusts

certain business (investigation of compliance with the criteria for listing/delisting and with listing

eligibility requirements) to an approved J-Adviser that meets certain qualifications. A J-Adviser

investigates/confirms the listing eligibility of a company it supervises before listing, provides advice and

guidance concerning timely disclosure after listing, and examines the status of compliance with

requirements to maintain a listing. Please note that the J-Adviser system does not exempt a company

listed on TOKYO PRO Market and its directors from obligations as a listed company.

(4) Principle-Based Approach

TSE applies a principle-based approach to the listing system of TOKYO PRO Market. The

"principle-based approach" means that TSE is responsible for operating the market while making

appropriate judgments on a case-by-case basis from a perspective of maintaining transparency and

fairness of the market in accordance with the idea of each provision that stipulates principle-based

handling in "Special Regulations of Securities Listing Regulations Concerning Specified Listed

Securities."

Applicant company

Judgment of listing

eligibility

Listing

Investigate and confirm listing eligibility on behalf of TSE

J-Adviser

Business aspect

Business DD

Legal aspect

Legal DD

Financial aspect

Financial DD

Tokyo Stock Exchange

Entrustment of

certain business


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2 System of Initial Listing

(1) Flow of Initial Listing

Initial stock listing on TOKYO PRO Market is conducted through a J-Adviser (hereinafter

"supervising J-Adviser") engaged by the stock's issuer (hereinafter, a stock company that files an

application for listing is called "applicant company"). Specifically, a supervising J-Adviser investigates

and confirms in advance whether an applicant company has qualifications to list on TOKYO PRO

Market, and then the applicant company submits application forms for initial listing to TSE via the

supervising J-Adviser, including the "Application Concerning Listing Eligibility" prepared by the

supervising J-Adviser and the "Application Form for Initial Listing of Securities" prepared by the

applicant company. Upon receipt of the listing application, TSE announces its details and approves

listing in 10 business days from the date of filing. Subsequently, when the applicant company solicits for

acquisition or purchases, etc. by specified investors, listing is done after taking the necessary procedures.

Various regulations concerning initial listing consist of "Special Regulations of Securities Listing

Regulations Concerning Specified Listed Securities" and "Enforcement Rules for Special Regulations of

Securities Listing Regulations Concerning Specified Listed Securities."

(2) Target Securities

Securities that can be listed on TOKYO PRO Market include common stocks, classified stocks, and

trust beneficiary certificates. Specifically, the following 13 securities are covered in the definition of

"Stocks, etc." in Rule 1, Item 3 of the Special Regulations of Securities Listing Regulations Concerning

Specified Listed Securities.

(Table) List of Securities Defined as "Stocks, etc."

A stock issued by a domestic corporation

A stock issued by a foreign corporation

A preferred equity contribution security

A subscription warrant security issued by a domestic or foreign corporation

ETN

An investment trust beneficiary certificate

A foreign investment trust beneficiary certificate

An investment security

A foreign investment security

A foreign stock depositary receipt

A domestic commodities trust beneficiary certificate

A foreign securities trust beneficiary certificate

A beneficiary certificate of a foreign beneficiary certificate issuing trust


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When listing securities other than stocks, please check with the New Listings Department of TSE in

advance since time may be required to confirm whether system modifications are necessary.

(3) Languages Used

TOKYO PRO Market is positioned as a listing venue for domestic and foreign companies that require

risk capital, and disclosure materials and documents to be submitted to TSE can be prepared not only in

Japanese but also in English. It is also possible to use different languages for documents, for example,

Japanese for disclosure materials and English for documents submitted to TSE.

(4) Accounting Standards

It is possible to adopt Japanese GAAP, US GAAP, International Financial Reporting Standards (IFRS),

or standards that a supervising J-Adviser as well as an audit firm deems equivalent to any of the

abovementioned standards and TOKYO PRO Market deems appropriate. When using "standards

TOKYO PRO Market deems appropriate," the issuer is required to disclose the differences in accounting

principles and procedures from either one of the three standards.


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3 Parties Involved in Listing and Their Roles

(1) J-Adviser

The J-Adviser is the most important partner for a company filing a listing application for TOKYO

PRO Market. The J-Adviser establishes a cooperative framework with external professionals (lawyer,

accountant, etc.) as necessary and investigates/confirms the listing eligibility of the applicant company

while leading the series of administrative procedures from listing application to listing. In the listing

preparation phase, the J-Adviser gives advice to the application company on capital policy as well as

development of an internal structure toward listing as necessary, and also assists the company in

financing and IR (investor relations) activities after listing.

In addition, if the J-Adviser is a securities company, it may undertake solicitation for acquisition or

purchases, etc. for specified investors at the time of or after listing as a lead managing securities

company.

For a listing, the applicant company has to conclude a "J-Adviser agreement" with one supervising

J-Adviser before proceeding with actual listing preparations. The prerequisite for maintaining its listing

is to keep such J-Adviser agreement effective.

The list of J-Advisers approved by TSE can be found on the TSE website

(http://www.tse.or.jp/rules/promarket/company/adviser_list2.html).

(2) Audit Firm

The audit firm expresses an audit opinion on financial statements, etc. attached to the Specified

Securities Information (or Issuer Filing Information) submitted based on the Special Regulations.

(3) Shareholder Services Agent

The shareholder services agent is an organization required to be engaged for smooth shareholder

services and engages in preparation of a register of shareholders and handling of various rights granted

to shareholders such as voting rights and dividends. A domestic applicant company is required to entrust

a prescribed shareholder services agent with shareholder services when listing.

(4) Liquidity Provider

The liquidity provider, a trading participant of TSE, ensures smooth trading after the stocks of the

applicant company are listed. When listing, the applicant company is required to appoint one or more


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TSE trading participants as liquidity provider based on their consent. A trading participant appointed as a

liquidity provider by an applicant company is required to submit a document to TSE that describes its

policy to maintain liquidity.


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4 Steps to Listing

The flow up to listing on TOKYO PRO Market is as follows. For a detailed schedule, please contact a

J-Adviser.

(Table) Process and Duration of Steps from Expression of Intent to Listing

(Note) When an unlisted company is to be listed without financing, about a month may still be required

from the announcement of listing application to listing due to procedures such as those

concerning the computerization of stock certificates.

(1) Before Submitting a Listing Application

In order to list on TOKYO PRO Market, an issuer is required to conclude a "J-Adviser agreement"

with one J-Adviser. After concluding the agreement, the supervising J-Adviser, mainly the J-QS in

charge of the applicant company (supervising J-QS), investigates and confirms whether the applicant

company has eligibility for listing on TOKYO PRO Market. Also, the applicant company prepares

documents necessary for listing application based on advice and guidance provided by the supervising

J-Adviser. These documents contain details on matters including business activities, financial condition,

and directors.

After the supervising J-Adviser completes investigating and confirming the listing eligibility of the

applicant company, the supervising J-Adviser expresses its intent for a listing application.

(2) Expression of Intent for Listing Application・Interviews with Supervising

J-QS

The supervising J-Adviser expresses intent for a listing application within about 30 business days

Investigation and

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About 30 business days

At least a month (Note)

10 business days


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prior to the actual listing application date by emailing the "Letter of Intent of Listing Application" to

TSE. The letter contains the name of the applicant company, the contact information of the supervising

J-Adviser, the desired listing schedule (listing application date, listing approval date and listing date) and

other matters.

After expression of intent, staff in charge of examination at TSE (self-regulation organization)

interviews with the supervising J-QS to check whether the process of investigation and confirmation of

listing eligibility by the supervising J-Adviser was appropriate. All communications with TSE from

expression of intent to listing approval are conducted via the supervising J-Adviser. As such, in general,

TSE does not directly contact the applicant company.

In addition, the Tokyo Pro Market will require the directors, executives, etc. of the applicant to attend

e-learning sessions. The E-learning sessions aim to provide them with opportunities to acquire a deeper

and better understanding of the various issues on which they must focus when listing their securities.

These issues include, specifically:

- The duties and attitudes of the directors, executives, etc. of listed companies with regard to

the listing;

- The need to develop and operate a management system suitable for listed companies; and

- Measures to prevent insider trading, information dissemination, and trading

recommendations and solicitations.

(3) Listing Application

The applicant company is required to file a listing application by submitting the "Application Form

for Initial Listing of Securities" via its supervising J-Adviser by at least 10 business days prior to the

desired listing approval date. Upon the completion of filing the listing application, the following

information from attachments to the application documents of the applicant company will be disclosed.

Specified Securities Information (or Issuer Filing Information)

"Written Oath Regarding Application for Initial Listing"

"Report Regarding Corporate Governance"

Articles of incorporation of the applicant company

(4) After Listing Approval by TSE

a. Announcement of Listing Approval

Listing is approved in 10 business days from the listing application date.


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b. Listing

In accordance with the listing agreement concluded with TSE, the applicant company, as a listed

company on TOKYO PRO Market, is required to comply with various regulations regarding timely

disclosure, etc. from the listing date.

On the listing date, a listing ceremony is held at TSE and the listed company will receive a listing

certificate and commemorative gifts from TSE.

5 Obligations after Listing

(1) Maintenance of J-Adviser Agreement

A company listed on TOKYO PRO Market is required to keep its "J-Adviser agreement" effective

after listing. The agreement is concluded with its supervising J-Adviser prior to listing. A J-Adviser

agreement serves as a prerequisite for initial listing and maintenance of listing. While the minimum

scope of items that should be included are stipulated in the rules, TSE does not provide a standard

template. As such, a J-Adviser will be required to prepare its agreement form.

(Table) Items to be Included in a J-Adviser Agreement

Rule 306 of the Enforcement Rules for Special Regulations

(1) Non-disclosure of information received from the counterparty to the agreement and prohibition of

inappropriate use of such information

(2) Obligations of a J-Adviser in the course of fulfilling J-Adviser obligations based on the Special

Regulations

(3) Obligations of a supervised company in the course of observing the provisions of Part 2 of the

Special Regulations

(4) Necessarily occurring obligations of a supervised company in the course of allowing a J-Adviser to

fulfill its obligations based on the Special Regulations, as well as the necessary occurring

obligations of a supervised company in the course of notifying its J-Adviser of changes in its

business or organization

(5) Matters related to costs, notices, termination, etc.

(6) Correspondence between a J-Adviser and its supervised company

(7) Obligation to give prior notice pertaining to termination of an agreement between a J-Adviser and

its supervised company (prior notice is required, as a general rule, at least one month in advance of

termination)

(8) Other matters deemed necessary by the Exchange


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A company listed on TOKYO PRO Market is required to maintain its J-Adviser agreement by

receiving guidance and advice from its supervising J-Adviser and properly fulfilling obligations as a

listed company.

As such, the J-Adviser agreement is deemed to be an important agreement integral to an

initial listing and for the maintenance of a listing on the Tokyo Pro Market. Because the

termination of a J-Adviser agreement may result in the delisting of a listed company, the issuer

is encouraged to enhance the foreseeability of possible delisting by describing the following in

the specified securities information or issuer’s information, securities report, or securities

registration statement (hereinafter referred to as the “Specified Securities Information”):

Items related to the termination of the J-Adviser Agreement;

Items related to the prior demand obligations for the termination of the agreement;

Statement to the effect that no factors have occurred that might lead to delisting (if such

factors have occurred, a detailed description of the factors and the views of the supervising

J-Adviser on the possibility of termination of the agreement); and

Statement to the effect that delisting might result if such factors were to occur

(2) Timely Disclosure

As with companies listed on other exchanges, a company listed on TOKYO PRO Market has

obligations to conduct timely and appropriate disclosure of corporate information. Items that are subject

to timely disclosure for companies listed on TOKYO PRO Market are almost the same as those for

companies listed on other exchanges. Timely disclosure is made via TDnet (Timely Disclosure network),

a system for registration and dissemination of timely disclosure jointly used by financial instruments

exchanges in Japan. Information disclosed is communicated to the press via TDnet and posted on the

"Timely Disclosure Information Browsing Service," making it available to the public on the Internet.

URL of Timely Disclosure Information Browsing Service

http://www.tse.or.jp/listing/disclosure/index.html

At TOKYO PRO Market, the supervising J-Adviser provides guidance and advice where necessary

and carries out administrative work for the listed company's timely disclosure. Specifically, the

supervising J-Adviser stands between TSE and the listed company to provide guidance and advice for

timely disclosure to the listed company and make arrangements with TSE regarding registration to

TDnet.

(Table) Major Corporate Information Subject to Timely Disclosure

Information of a listed company

Decisions made at a listed company

Facts which occurred at a listed company

Account settlement information of a listed company

Revision, etc. of earnings forecast and dividend forecast of a listed company

Other information


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(Disclosure of the status of conversion or exercise of MSCB, etc., disclosure of items for

controlling shareholders, etc., related party transactions, change in supervising J-Adviser, etc.)

Information of subsidiaries, etc.

Decisions made at subsidiaries, etc.

Facts which occurred at subsidiaries, etc.

Revision, etc. of earnings forecasts of subsidiaries, etc.

Securities listed on TOKYO PRO Market are also subject to insider trading regulations of the

Financial Instruments and Exchange Act. Since there is no restriction on sales of stocks at TOKYO PRO

Market, depending on its situation, prior to listing, the issuer may consider developing a system to

manage trading of treasury stock by officers and employees.

(3) Disclosure of Issuer Filing Information

A company listed on TOKYO PRO Market is required to prepare and disclose "Issuer Filing

Information" within three months from the last day of the most recent business year/interim accounting

period or a consolidated accounting period/consolidated interim accounting period.

Issuer Filing Information is disclosure material equivalent to statutory disclosure for companies listed

on other exchanges, such as a securities report, and is prepared based on the form stipulated by TSE

(Form 4 of the appendix to the Enforcement Rules for Special Regulations). Means to disclose Issuer

Filing Information can be either (1) posting on the TSE website or (2) posting on the listed company’s

website. When selecting (2), the issuer is required to promptly submit Issuer Filing Information (in PDF)

to TSE via the supervising J-Adviser. TSE will immediately post data submitted by the supervising

J-Adviser on its website.

Once posted, it is necessary to maintain the posting of such Issuer Filing Information until the next

one is posted. When there is any change or revision to be made to the content of such Issuer Filing

Information, the listed company is required to swiftly disclose details upon consultation with its

supervising J-Adviser.

(4) Means to Ensure Effectiveness and Delisting

At TOKYO PRO Market, the supervising J-Adviser confirms, as part of its J-Adviser operations,

whether the listed company continues to be eligible for listing. When the supervising J-Adviser

determines that the listed company is no longer eligible, the J-Adviser will accordingly terminate the

J-Adviser agreement. If the listed company receives a notice of termination of the agreement from its

supervising J-Adviser and fails to conclude a J-Adviser agreement with a different J-Adviser within a

specified period, it will get delisted.


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Also, TSE may take any of the following measures to ensure effectiveness.

Public announcement measure

Designation of Disclosure in Question Securities

Submission of improvement report

Designation of Securities on Alert

Delisting a listed stock, etc.

Listing agreement violation penalty

A listed company will also be delisted if it submits the "Delisting Application Form" upon passing a

special resolution at a general shareholders meeting.

II Listing Requirements

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1 Investigation and Confirmation of Listing Eligibility

Requirements by J-Adviser

(Listing Eligibility Requirements)

An initial listing applicant must satisfy the matters enumerated in each of the following items.

(1) An initial listing applicant does not damage the reputation of the market of the Exchange

and is a company that is suitable for listing on such market.

(2) An initial listing applicant conducts business fairly and in good faith.

(3) The corporate governance and internal management structure of an initial listing applicant

is appropriately developed in accordance with corporate scale and maturity, etc. and

functions properly.

(4) An initial listing applicant carries out disclosure of corporate content and risk information,

etc. appropriately and has developed a system and framework which enables it to fulfill its

disclosure obligations based on the Special Regulations.

(5) No relations with anti-social forces and other matters deemed necessary by the Exchange

from the perspective of the public interest and investor protection.

(Rule 113 of the Special Regulations)

(Investigation and Confirmation of Listing Eligibility by J-Adviser)

A J-Adviser must investigate and confirm whether an entity it supervises, which intends to make

an initial listing application, satisfies the listing eligibility requirements prescribed in Rule 113,

and whether such entity is able to fulfill the obligations prescribed in Part 2, Chapter 2.

Thereafter, the J-Adviser must prepare the "Written Oath Regarding Listing Eligibility" and the

"Matters to Note When Preparing Written Oath Regarding Listing Eligibility" pursuant to the

provisions of the Enforcement Rules and submit them together to the Exchange.


At TOKYO PRO Market, the supervising J-Adviser investigates and confirms the listing eligibility of

the applicant company based on the eligibility requirements specified by TSE in its regulations.

The supervising J-Adviser prepares the "Written Oath Regarding Listing Eligibility" and "Matters to

Note When Preparing Written Oath Regarding Listing Eligibility" and submits them to TSE after

investigating and confirming the listing eligibility requirements. Based on the "Matters to Note When

Preparing Written Oath Regarding Listing Eligibility," TSE confirms whether a supervising J-Adviser

has investigated and confirmed the necessary items based on proper procedures by means of an

interview of the supervising J-QS.


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The following are the items that TSE requires a J-Adviser to investigate and confirm based on the

"Matters to Note When Preparing Written Oath Regarding Listing Eligibility." The items listed here are

those for which TSE checks with a supervising J-Adviser and do not limit the scope of investigation and

confirmation that the J-Adviser conducts on the applicant company. There may be additions to or

omissions from these items, depending on the industry sector and business category of the applicant

company.

(1) An initial listing applicant does not damage the reputation of the market of the Exchange and is a company that is suitable for listing on such market.

Necessary and appropriate due diligence (hereinafter "DD") of the corporate group of the initial

listing applicant should be conducted. In DD, necessary and appropriate investigation and

confirmation should be conducted for matters concerning business activities (including business

model, business environment, and risk factors), finance and legal affairs (including matters that

have a serious effect on business management such as the legal system of the country where

the applicant was incorporated or where its sales activities are conducted), etc. of the corporate

group of the initial listing applicant.

Points to be checked in investigation and confirmation regarding an applicant

In concluding a J-Adviser agreement with an applicant, details of such agreement are explained in

detail to allow the applicant company to develop a full understanding.

Investigation of the country where the applicant was incorporated or where its sales activities are

conducted

Necessary investigation and confirmation (legal system including business regulations, accounting

system, and tax system) is conducted, and risks are fully understood concerning the country where

the applicant/affiliate was incorporated or the country where its sales activities are conducted.

Business activities and business environment

Business activities and business environment of the applicant are understood, and necessary

investigation and confirmation is conducted on business health and growth potential.

Strengths and weaknesses of the applicant are checked (SWOT analysis, etc.)

Trends in financial performance of the applicant are checked.

Business processing flow of the applicant is checked

(Sales/purchase/manufacturing/accounting/labor/finance and investment activities, etc.)

Profit planning and a system (procedures) to develop such plan are checked.

Status of budget control (annual/semiannual/monthly, etc.) is checked.

It is checked that the applicant properly confirmed the sufficiency of working capital for 12 months

from the scheduled listing date.

Investigation and confirmation of important business bases

Appropriate investigation and confirmation is conducted in terms of location, history, size,

management system, etc. of important business bases (plant, sales office, branch, head office, etc.)

On-site investigation (physical survey, etc.) is conducted on important business bases (plant, sales


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office, branch, head office, etc.)

When outsourcing DD to a third party, such DD should be conducted by a suitable outside

professional.

Outsourcing of DD

In the course of executing J-Adviser operations for initial listing, when a part or all of DD is

outsourced to an outside professional, DD operation outsourcing to a suitable outside professional

should fall within reasonable scope.

Handling of results of DD

Issues discovered and pointed out in DD internally or by the outside professional are understood

comprehensively, and proper handling is checked.

Means for assessment and confirmation of technology of drug development bio-venture, etc.

As for a drug development bio-venture company or a prior investment company, the core

technology is properly analyzed and assessed through DD conducted by an internal or outside

professional, etc.

(2) An initial listing applicant conducts business fairly and in good faith.

It should be confirmed that the corporate group of the initial listing applicant does not provide or

receive unfair gains to/from a related party or other specified party through transactions and

other business activities.

Related party transaction, etc.

Necessary investigation and confirmation is conducted to understand the status of transaction with a

related party of the applicant or a party with a strong personnel and capital relationship.

It is confirmed that the applicant is properly aware of related party transactions and has a

check-and-balance system.

It should be confirmed that officers of the initial listing applicant are not in conditions that would

impair the fair, faithful, and adequate execution of duties as an officer of such initial listing

applicant.

President and Representative Director, etc.

It is confirmed that there is no problem in capability as a president of a listed company (corporate

manager) by conducting an "interview with the president (corporate manager)."

Officers (director, accounting adviser, corporate auditor or executive officer, senior general manager

or auditor-secretary, or a person equivalent thereto)

Necessary investigation and confirmation is conducted to understand the status of changes in

officers since its foundation.

The status of officers’ large debts and personal guarantees to a third party is checked.

It is confirmed that there is no transaction between the applicant and its officers that is lacking in


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reasonableness and leads to a conflict of interest.

(3) The corporate governance and internal management structure of an

initial listing applicant is appropriately developed in accordance with corporate scale and maturity, etc. and functions properly.

It should be confirmed that a system is in place to ensure proper execution of duties of officers

of the corporate group of the initial listing applicant and that such system functions properly.

Qualification of directors

The number of directors, their roles, and eligibility are checked.

Shape of organization

It is confirmed that the corporate governance system of the applicant is properly described in the

corporate governance report.

It is confirmed that company organs, organization, and check-and-balance system are adequately

developed to oversee the execution of officer duties, and they function effectively.

Necessary investigation and confirmation is conducted on the state of holding shareholders

meetings, board of directors meetings, and board of auditors meetings, as well as the state of

preparation of such minutes.

It should be confirmed that an internal control system is properly developed and managed to

ensure effective management activities of the corporate group of the initial listing applicant.

Internal control system

Necessary investigation and confirmation is conducted on the approval process for rules regarding

request for approval and rules for authority on decisions, etc.

It should be confirmed that human resources necessary for stable and continuous execution of

management activities and for maintenance of an internal control system of the corporate group

of the initial listing applicant is secured.

Securing human resources

It is confirmed that human resources necessary for business management of the applicant is secured.

Officers and employees

Proper investigation and confirmation is conducted on officers and employees (including but not

limited to collection of resumes, work histories, and questionnaires or interviews as necessary).

It should be confirmed that the corporate group of the initial listing applicant adopts accounting

standards that are suitable for its situation and that the necessary accounting organization is

properly developed and managed.

Accounting standards


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It is confirmed that accounting standards are suitable to the applicant's situation and are properly

applied.

Development of accounting organization

It is confirmed that there is an accounting organization capable of properly conducting accounting

work in place.

An effective system for compliance with laws and regulations concerning management activities

and other matters of the corporate group of the initial listing applicant is properly developed and

managed.

Raising awareness of laws and regulations , rules, etc.

It is confirmed that the management has sufficient knowledge and understanding of the Financial

Instruments and Exchange Act, relevant laws and regulations, various rules of the Exchange, etc.

It is confirmed that an internal system for legal compliance is established and properly managed.

If there was a case of legal violation in the past, the status of rectification of the deficiency and the

status of development of a preventive system is checked.

(4) An initial listing applicant carries out disclosure of corporate content

and risk information, etc. appropriately and has developed a system and framework which enables it to fulfill its disclosure obligations based on the Special Regulations.

It should be confirmed that the corporate group of the initial listing applicant properly manages

corporate information such as facts that have a material influence on management and make it

available for timely and adequate disclosure to investors. It should also be confirmed that a

system to prevent insider trading is properly developed and managed.

Disclosure system

Necessary investigation and confirmation is conducted on the organizational system and procedures

for disclosure after listing.

It is confirmed through interview, etc. that the management and the person in charge of disclosure

sufficiently understand regulations and obligations for disclosure.

Disclosure on the website

It is confirmed that the applicant is prepared to post necessary items on its website after the listing

application date.

It is confirmed that the flow of posting information on its website is developed (development of

internal rules and manuals, etc.) and communicated thoroughly within the company.

Management of insider trading

Necessary investigation and confirmation is conducted on the information management system

(personal information, corporate information, information on business partners, etc.)

Necessary investigation and confirmation is conducted on specific measures to prevent insider

trading (development of rules to prevent insider trading, etc.)


- 21 -

As for Specified Securities Information, etc. submitted by the initial listing applicant, it should be

confirmed that such information is properly prepared based on the Special Regulations of

Securities Listing Regulations Concerning Specified Listed Securities and includes matters that

should be considered as risk factors of the initial listing applicant based on the industry sector

and business category of the corporate group of the initial listing applicant.

Compliance with rules and laws and regulations for Specified Securities Information

It is confirmed that the applicant understands the laws and regulations concerning major business

activities, complies with them, and includes necessary items in Specified Securities Information.

Specified Securities Information

It is confirmed that information to be included in "risk information" is understood and sufficiently

disclosed.

It is confirmed that related party transactions are comprehensively understood and are fair and

reasonable, and that they are sufficiently disclosed.

It is confirmed that the reasons for appointment of the audit firm, legal counsel, J-Adviser, etc. are

appropriate.

When the audit firm, legal counsel, or J-Adviser, etc. was replaced or had its contract terminated in

the past, the appropriateness of the reason is checked.

It is confirmed that there is no problem with the background to concluding the audit contract, the

period of engagement and personnel as well as capital relationship with officers and employees,

through an interview, etc. with the audit firm.

Also, when there is any unresolved audit finding including accounting function and the

effectiveness of internal control, etc., the applicant’s approach toward appropriately responding to

such finding is checked.

Whether there is any pending legal matter, lawsuit, or other issues, and the development of a system

to handle them are checked.

When the applicant has a parent company, etc., it is confirmed that management activities of the

applicant are independent from its parent company, in addition to risks on management activities.

Appropriateness of Specified Securities Information

It is confirmed that Specified Securities Information is based on the form stipulated by the

Securities Listing Regulations and that the information provided is accurate.

To confirm entries in Specified Securities Information, measures are taken as necessary such as

questioning the applicant and obtaining supporting documents.

(5) No relations with anti-social forces and other matters deemed

necessary by the Exchange from the perspective of the public interest and investor protection.

It should be confirmed that the corporate group of the initial listing applicant has developed an

internal system to prevent the involvement of anti-social forces in its management activities and

makes efforts, and that the actual condition is appropriate from a perspective of public interest


- 22 -

and investor protection.

Investigation of anti-social forces by J-Adviser

The involvement of anti-social forces is checked based on an appropriate scope/method in light of

J-Adviser internal standards.

When any questionable item is found concerning relations with anti-social forces, its details are

examined in detail, and appropriate measures are taken.

Applicant’s system for confirmation

It is confirmed that the applicant’s fundamental policy as well as internal system to eliminate the

involvement of anti-social forces are properly established and managed.

In concluding an agreement between a J-Adviser and an initial listing applicant stipulated by the

Special Regulations of Securities Listing Regulations Concerning Specified Listed Securities, it

should be confirmed that the initial listing applicant accurately understands the Special

Regulations, relevant laws and regulations and details of such agreement. It should also be

confirmed that the initial listing applicant has developed a system to properly exchange

information with its J-Adviser.

Cooperation between J-Adviser and applicant

It is confirmed that a system for report/communication/confirmation has been established between

the initial listing applicant and its J-Adviser (including J-QS).

A system to ensure proper recording and storing of report/communication/confirmation between the

initial listing applicant and its J-Adviser (including J-QS) is checked.

The applicant is confirmed to be appropriate from the perspective of the public interest and

investor protection.

Shareholders *Including potential shareholders

The changes in shareholders since its foundation are understood, and necessary investigation and

confirmation is conducted.

When both class shareholders and ordinary shareholders exist, necessary investigation and

confirmation is conducted on their rights.

Lock-up clause

It is confirmed that the necessary documents such as written assurance are exchanged with those

subject to the necessary lock-up clause.

Also, measures are taken to check compliance of those subject to lock-up after listing.

Takeover defense measures

When takeover defense measures are in place, necessary investigation and confirmation is

conducted on the reason for introduction and details of such measures.


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2 Audit by Audit Firm

(1) An audit report should be attached to financial statements required for Specified Securities

Information (including information equivalent to Issuer Filing Information submitted when

solicitation for acquisition or purchases, etc. for specified investors is not undertaken). Such

audit report should contain an "unqualified opinion" or "unqualified conclusion" or an

opinion or conclusion equivalent to these and satisfy the criteria enumerated in each of the

following items.

- The report contains the result of an audit or review conducted in compliance with

generally-accepted auditing standards, interim auditing standards, or quarterly review

standards in Japan or a standard equivalent to these.

- The report contains certification corresponding to audit certification prescribed in Article

193-2 of the Financial Instruments and Exchange Act or certification equivalent thereto.

- The report is prepared by an audit firm.

- The report pertains to the most recent business year or consolidated accounting period.

(Rule 210, Item 5 of the Securities Listing Regulations,

Rule 103, Item 6 of the Enforcement Rules)

At TOKYO PRO Market, the issuer is required to attach audit reports to the financial statements for

the most recent business year or consolidated accounting period included in "Specified Securities

Information (or Issuer Filing Information)" that is submitted at the time of filing the listing application.

At TOKYO PRO Market, it is stipulated that the audit firm should prepare the audit report from the

perspective of ensuring a certain level of quality.

3 Establishment of Shareholder Services Agent

A listed domestic company shall entrust shareholder services to an entity approved by the

Exchange as a shareholder services agent specified by the Enforcement Rules.


It is necessary to either entrust shareholder services to an entity approved by TSE as a shareholder

services agent or obtain such agent’s internal consent to accept such entrustment by a listing application

date.

(Note) The shareholder services agents currently approved by TSE are trust banks, Tokyo Securities

Transfer Agent Co., Ltd., Japan Securities Agents, Ltd., and IR Japan, Inc. (Rule 120 of the

Enforcement Rules).


- 24 -

4 Restrictions on Stock Transfer

A listed company must not restrict transfer of listed stock, etc. unless otherwise specified by the

provisions of Article 2, Paragraph 3, Item 2, (ii), (2) of the Act (Note 1) and the provisions of

other special laws (Note 2).


The issuer is required not to restrict the transfer of stocks subject to the listing application in its

articles of incorporation, unless there are restrictions stipulated by laws.

(Note 1) Stock that is unlikely to be transferred from the acquirer to anyone other than specified

investors, etc.

(Note 2) Cases where the transfer of stock subject to the listing application is restricted due to specific

laws, such as the Broadcast Act and the Civil Aeronautics Act, and such restriction is

considered to not disrupt trading at TSE and treated as exceptions.

5 Securing of Liquidity Provider

A listed company, with the agreement of a trading participant of the Exchange, shall designate

such trading participant as a liquidity provider, notify the Exchange and announce it.


The applicant company is required to designate one or more TSE trading participants as a liquidity

provider. The supervising J-Adviser is required to support the applicant company to secure a liquidity

provider, and trading participants designated as liquidity providers have obligations to make efforts to

provide liquidity such as working to ensure the smooth trading of securities issued by the listed

company.

6 Issuance of Analyst Report

A listed company shall make efforts toward the regular issuance of analyst reports pertaining to

the company (meaning documents distributed to investors whose main content is financial

analysis of a corporation, etc.)


The applicant company is required to make efforts to ensure the regular issuance of analyst reports on

the company. Also, the supervising J-Adviser is to support the applicant company in such efforts.


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7 Handling by Designated Book-entry Transfer Institution

A listed stock, etc. must be subject to handling in the book-entry transfer operation of a

designated book-entry transfer institution.


Domestic stocks listed on a financial instruments exchange are subject to the Book-Entry Transfer

System for Stocks, etc. by a designated book-entry transfer institution based on the Transfer Act. Japan

Securities Depository Center, Inc. (hereinafter "JASDEC") is designated as a book-entry transfer

institution based on the Transfer Act.

Therefore, stock of the applicant company needs to be either subject to or be expected to be subject to

handling by JASDEC by the time of listing.

In order for stock of the applicant company to be subject to handling in the book-entry transfer

operation of a designated book-entry transfer institution, since such applicant company should be a one

that does not issue stock certificates, if the applicant company issues stock certificates and has not

completed procedures for non-issuance of stock certificates, such company needs to complete

procedures for non-issuance by the time of filing its listing application in principle. Also, it is necessary

to submit a series of documents required by JASDEC such as an agreement form that describes the

applicant’s consent to JASDEC’s handling of stock to be listed.

For handling of foreign stocks, etc., please also see the "Initial Listing Guidebook for Foreign

Companies."

8 Shares per Share Unit

At TSE, in order to improve convenience for market users including investors, the goal is to

consolidate the trading units of all listed companies to 100 shares. A company applying for initial listing

is required to make its trading unit (number of shares per share unit) 100 shares.

At TOKYO PRO Market, there is no uniform number of shares per share unit specified in the market

regulations, but when securities to be listed are stocks, the issuer is recommended to set the trading unit

(number of shares per share unit) to 100 shares.

9 Changes of Stock, etc. before Listing

(1) Entries Concerning Changes of Stock, etc. before Listing


- 26 -

When a special stakeholder, etc. (Note 1) has carried out an acquisition or transfer of a stock to be

issued by the applicant company, subscription warrants or bonds with warrants (excluding offering,

secondary offering, solicitation of primary offering for subscription to specified investors and

solicitation of secondary distribution to specified investors (hereinafter "offering, etc. prior to listing"),

including exercise of subscription warrants and bonds with warrants; hereinafter "changes of stock,

etc.") during the period from two years counting from the end of the most recent business year

immediately before the initial listing application date (meaning the business year that immediately

precedes the business year to which the listing date belongs. In the case where such listing date falls

within the period from the start of the business year to the day of the annual general shareholders

meeting, this shall be the business year immediately preceding the most recent business year; the same

shall apply hereinafter in this rule) (Note 2) to the day of announcing "Specified Securities Information"

and "Issuer Filing Information," entries concerning changes of such stock, etc. should be included in

"Specified Securities Information" and "Issuer Filing Information." However, if the stock to be issued by

the applicant company is a Green Sheet Issue designated by the Japan Security Dealers Association, this

may not apply.

(Rule 115 of the Special Regulations, Rule 106 of the Enforcement Rules)

(Note 1) "Special stakeholder, etc." are those stipulated by Article 1, Item 31 of the Cabinet Office

Ordinance on Disclosure and consist of the following.

1 Special stakeholder of the applicant company (special stakeholder stipulated by Article 1, Item

31, Sub-item (a) of the Ordinance)

2 Top 10 shareholders of the applicant company

3 Affiliated company related to the applicant company through personnel affairs (affiliated

company through personnel affairs stipulated by Article 1, Item 31, Sub-item (c) of the

Ordinance) or affiliated company related to an applicant company through capital ties

(affiliated company through capital ties stipulated by Article 1, Item 31, Sub-item (c) of the

Ordinance) or their officers

4 Securities company (including foreign securities company) and its officers, affiliated company

through personnel affairs (affiliated company through personnel affairs stipulated by Article 1,

Item 31, Sub-item (c) of the Ordinance) or affiliated company through capital ties (affiliated

company through capital ties stipulated by Article 1, Item 31, Sub-item (c) of the Ordinance)

(Note 2) For example, when the last day of the most recent business year immediately before initial

listing application is March 31, it would be April 1 two years before.

(2) Retention, etc. of the Record of Changes in Ownership of Stocks, etc.

Before Listing

An initial listing applicant shall retain the record pertaining to the status of changes in stock, etc. for a

period of five years from the listing date.

(Rule 106 of the Enforcement Rules)


- 27 -

10 Allotment, etc. of Stock for Subscription by Third-party

Allotment, etc. before Listing

(1) Regulations on Allotment, etc. and Holding of Offered Stock, etc. by

Third-party Allotment

When the initial listing applicant carries out allotment of offered stock, etc. (Note 2) by

third-party allotment, etc. (Note 1) (offered stock stipulated by Article 199, Paragraph 1 of the

Companies Act or offered preferred equity contribution stipulated by the Act on Preferred Equity

Investment) during the period one year counting from the most recent business year immediately

preceding the initial listing application date to the day preceding the listing date, such applicant

shall have the entity that received an allotment or delivery enumerated in each of the following

items give written assurance to its supervising J-Adviser on the matters specified in the following

paragraph (Note 3). Approval of whether allotment of offered stock is carried out is determined

based on the due date of payment or the last day of a payment period for offered stock.

(Rule 115 of the Special Regulations,

Rule 107, Paragraph 1 of the Enforcement Rules)

(Note 1) Out of methods of allotment of offered stock, this includes methods other than a public

offering, allotment to shareholders, and allotment to preferred equity contributors

pertaining to such stock, etc. designated by the Japan Security Dealers Association as a

Green Sheet Issue where a securities company allocates to an unspecified large number of

recipients according to rules specified by the Association.

(Note 2) This includes allotment of offered stock by third-party allotment (excluding cases of

offering, etc. before listing), allotment of subscription warrants by third-party allotment

(including allotment of own subscription warrants considered to have the same effect),

and issuance of stock due to exercise of subscription warrants.

(Note 3) The matters on which the applicant company has the entity that received an allotment or

delivery give written assurance to its supervising J-Adviser are as follows.

a. Continuous holding

An entity that received such allotment or delivery shall continue to hold the stock or

subscription warrants (hereinafter "allotted stock, etc.") until six months have passed

since the day it received the allotment or delivery (where one year has not passed since

receiving allotment or delivery of allotted stock, etc., the day when one year has passed

since receiving such allotment or delivery). However, this shall exclude cases where

allotted stock, etc. was transferred due to significant difficulty in the business

operations of such entity or other cases where it is deemed unavoidable in light of

socially accepted norms by the supervising J-Adviser.


- 28 -

(Rule 107, Paragraph 2, Item 1 of the Enforcement Rules)

b. Report to the applicant company when stock transfer, etc. is conducted

Where carrying out a transfer of allotted stock, etc. or acquired stock, etc. pertaining

to allotted stock, etc., the entity that received an allotment or delivery shall give written

notice to the initial listing applicant in advance and report on the details of such

transfer to the initial listing applicant after the fact.


c. Other matters deemed necessary by TSE


III J-Adviser

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III J-Adviser

1 Obtaining J-Adviser Qualification

(1) Requirements for Obtaining J-Adviser Qualification

The J-Adviser system is at the core of the concept of TOKYO PRO Market, and a J-Adviser is

expected to contribute to maintaining and enhancing the market functions of TOKYO PRO Market as a

partner of TSE.

Also, since a supervising J-Adviser has obligations based on the J-Adviser agreement to provide

appropriate advice and guidance to the applicant company or a company listed on TOKYO PRO Market

(hereinafter "supervised company") continuously from initial listing application to after listing, TSE has

strict requirements concerning knowledge and experience in the capital market and business operation

system for a corporation that intends to acquire J-Adviser qualification.

The main requirements for obtaining J-Adviser qualification are as follows.

(1) The applicant has sufficient experience concerning corporate finance advisory business

in the two years prior to the application day for obtaining J-Adviser qualification, or falls

under a case specified by the Enforcement Rules.

(2) The applicant has at least three J-QS.

(3) The applicant’s management systems and frameworks are appropriate.

(4) The applicant’s financial condition is sound and released on its website.

(5) The applicant is committed to and capable of being a partner in operating the market of

the Exchange based on a principle-basis.

(6) The applicant has experience and knowledge concerning the Japanese capital market.

(7) The applicant is a corporate entity structured to conduct business in a fair and efficient

manner.

(8) The applicant has appropriate systems and frameworks that enable fulfillment of the

agreement prescribed in the provisions of Rule 313.

(9) In the legal jurisdiction where the applicant conducts its business, where a supervisory

authority is present, such applicant appropriately complies with the supervision of such

supervisory authority.

(10) The applicant is not likely to damage the reputation, etc. of the market of the Exchange.

(11) The applicant does not have ties to anti-social forces.

(12) The applicant satisfies other requirements deemed necessary by the Exchange.

(Rule 304, Paragraph 1 of the Special Regulations)

III J-Adviser

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(2) Certification of J-QS

One of the J-Adviser qualification requirements, which is also one of the features of the J-Adviser

system, is that the entity needs to secure more than three J-QS (Qualified Supervisor) who have

sufficient experience and abundant knowledge required to conduct operations as a J-Adviser. This is

based on the idea that to provide high quality services to a supervised company and exercise leadership,

sufficient human resources become necessary.

J-QS is not a qualification provided to an individual. A J-Adviser individually appoints, from among

its full-time officers and employees, those in charge of executing duties as a J-Adviser for a supervised

company, and TSE certifies those who have eligibility. Therefore, a position or department of a J-QS at a

J-Adviser may vary depending on its business operation structure and approach. In the listing

application of a supervised company, the J-Adviser needs to include at least one J-QS as a supervising

J-QS of the supervised company in the "Written Oath Regarding Listing Eligibility," and the supervising

J-QS is expected to continue providing advice and guidance on behalf of the J-Adviser to the supervised

company after listing.

For an officer or employee of a J-Adviser to receive certification as J-QS, he/she is required to satisfy

the following requirements.

(1) The person is a full-time officer or employee of a J-Adviser or an applicant for obtaining

J-Adviser qualification.

(2) The person has a total of three years of experience concerning corporate finance advisory

business in the five years prior to the application day for J-QS certification.

(3) The person sufficiently understands the work pertaining to initial listing and the overall

work pertaining to fulfilling the obligations of a listed company.

(4) The person has experience and knowledge of the Japanese capital market.

(5) The person is a person who is deemed to be able to contribute to the development of the

market of the Exchange through involvement as a J-QS.

(6) The person is in a position to supervise the operations in which the J-Adviser is involved.

(7) In the legal jurisdiction where the J-Adviser conducts its business, where a supervisory

authority is present, the person appropriately complies with the supervision of such

supervisory authority.

(8) The person is not likely to damage the reputation, etc. of the market of the Exchange.

(9) The person does not have ties to anti-social forces.


(3) Application for Obtaining J-Adviser Qualification

If you consider obtaining J-Adviser qualification, please contact the New Listings Department of

TSE.

III J-Adviser

- 29 -

2 J-Adviser Obligations

A J-Adviser is required to contribute to maintaining and improving the market functions of TOKYO

PRO Market by providing advice and guidance to increase the corporate value of a supervised company,

for example. Also, to a supervised company, a J-Adviser continues to be an important partner even after

listing on TOKYO PRO Market. Therefore, a J-Adviser is required to continue to play a given role from

the time of obtaining its qualification.

(1) Obligations to Maintain Eligibility as J-Adviser

(Obligations to Maintain Eligibility as J-Adviser)

1 After obtaining J-Adviser qualification, a J-Adviser must continue to satisfy the criteria

enumerated in each of the items of Rule 304, Paragraph 1.

2 Where the Exchange deems that a J-Adviser does not satisfy the criteria enumerated in

each of the items of Rule 304, Paragraph 1, it may revoke the J-Adviser qualification and

take other measures in accordance with the provisions of Rule 327.

3 A J-Adviser must always secure sufficient J-QS and other staff to fulfill its obligations

pursuant to these Special Regulations.


A J-Adviser is required continue to satisfy the criteria after obtaining J-Adviser qualification, but

since the volume of work as a J-Adviser is expected to increase as the number of supervised companies

increases, it is required to secure an adequate number of J-QS and assistants depending on the number of

supervised companies.

(2) Maintenance of Independence from Supervised Company

1. A J-Adviser must maintain its independence from the supervised company by complying with

matters enumerated in each of the following items and taking other necessary measures. In

this case, details shall be specified by the Enforcement Rules.

(1) The officers or employees of the J-Adviser are not concurrently officers or employees of

the supervised company.

(2) The J-Adviser has no conflict of interest with the supervised company and maintains

sufficient systems and frameworks within the company and the group to avoid a conflict of

interest with the supervised company.

2. A J-Adviser may provide services other than those as a J-Adviser to its supervised company

or a company which such supervised company controls or has ties with, as long as there is

no conflict of interest concerning fulfillment of the J-Adviser obligations specified in this

chapter.

III J-Adviser

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While a J-Adviser investigates and confirms whether a supervised company fulfills listing eligibility

requirements, a J-Adviser is required to provide advice and guidance in various situations. Thus, a

J-Adviser needs to maintain independence from a supervised company and establish a system that

allows a J-Adviser to act without conflict of interest with a supervised company by building an

appropriate firewall inside the company, for example.

(3) Obligations at the Time of Initial Listing Application

A J-Adviser must investigate and confirm whether an entity it supervises, which intends to make

an initial listing application, satisfies the listing eligibility requirements prescribed in Rule 113,

and whether such entity is able to fulfill the obligations prescribed in Part 2, Chapter 2.

Thereafter, the J-Adviser must prepare the "Written Oath Regarding Listing Eligibility" and the

"Matters to Note When Preparing Written Oath Regarding Listing Eligibility" pursuant to the

provisions of the Enforcement Rules and submit them together to the Exchange.


A J-Adviser shall give advice to an initial listing applicant that it supervises on the fulfillment of

obligations of an initial listing applicant prescribed in Part 2, Chapter 2 and carry out work

related to initial listing in accordance with the provisions of the same chapter.


In the listing application of a supervised company, the J-Adviser is required to show that the scope of

investigation and confirmation stipulated by TSE has been fulfilled by preparing, as the supervising

J-Adviser, the "Written Oath Regarding Listing Eligibility" and the "Matters to Note When Preparing

Written Oath Regarding Listing Eligibility" based on the results of investigation and confirmation of

listing eligibility of the supervised company. A J-Adviser is also required to carry out the necessary work

in the listing process from expression of intent of listing application to listing, such as interviews with

the supervising J-QS and submission of required documents, while providing advice to the supervised

company on the implementation of procedures necessary for listing application and documents to be

prepared.

(4) Obligations after Listing

1. A J-Adviser must investigate and confirm whether its supervised listed company is able to

appropriately fulfill the obligations pursuant to the provisions of Part 2, Chapter 3.

2. A J-Adviser must appropriately give advice and guidance to make its supervised listed

company to fulfill its obligations pursuant to the provisions of Part 2, Chapter 3.

3. In the case where a supervised listed company does not heed the advice or guidance of the

preceding paragraph, the J-Adviser must immediately report such matter to the Exchange

III J-Adviser

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and consider terminating the agreement prescribed in Rule 313.


A J-Adviser provides advice and guidance even after listing so that the supervised company can fulfill

its obligations as a listed company, such as timely disclosure, and is also required to investigate and

confirm whether a supervised company continues to fulfill its obligations as a listed company from the

perspective of listed company compliance. A J-Adviser needs to include the necessary items on

obligations to be fulfilled by the supervised company in the J-Adviser agreement in advance and

terminate the J-Adviser agreement when it determines that the supervised listed company cannot fulfill

its obligations as a listed company.

A J-Adviser shall carry out the necessary work to enable its supervised listed company to fulfill

its obligations prescribed in Part 2, Chapter 3.


A J-Adviser is required to carry out the work necessary to help the supervised company fulfill its

timely disclosure obligation, such as confirmation and registration to TDnet of timely disclosure

materials prepared by a supervised company, and coordinate with TSE’s staff in charge. A J-Adviser

needs to develop a business operation system concerning timely disclosure including a cooperative

framework between the supervising J-Adviser and the supervised company so that the supervised

company can prepare and disclose appropriate materials when timely disclosure is required.

1. A J-Adviser shall become a liquidity provider or make efforts for its supervised listed

company to secure a liquidity provider to ensure smooth trading of the listed stock, etc.

issued by the supervised listed company.

2. In the case where the supervised listed company secures a liquidity provider in the

preceding paragraph, the J-Adviser shall support such liquidity provider in the execution of

such work.


A company listed on TOKYO PRO Market is required to appoint a liquidity provider from among

TSE trading participants to ensure smooth trading of its stock after listing. Primarily, it is the applicant

company’s obligation to secure a liquidity provider, but the supervising J-Adviser is required to become

a liquidity provider if it satisfies requirements to become a liquidity provider or make efforts to help the

supervised company find a liquidity provider.

Once the supervised company secures a liquidity provider, the supervising J-Adviser is required to

support the appropriate execution of operations of the liquidity provider. The system does not stipulate

specific details of the kind of support the J-Adviser should provide, but it is desirable that the J-Adviser

and the liquidity provider both support the listed company in the secondary market while having

appropriate communications.

III J-Adviser

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A J-Adviser shall make efforts toward the widespread publication of analyst reports pertaining to

its supervised listed company.


While a company listed on TOKYO PRO Market is required to make efforts toward the regular

issuance of analyst reports pertaining to the company, its J-Adviser is required to support the widespread

issuance distribution of such analyst reports on the company. The system does not stipulate specific

details of the kind of support the J-Adviser should provide, but the J-Adviser is required to provide

support so that a securities analyst can issue analyst reports while maintaining its independence.

(5) Other Obligations

1. A J-Adviser shall notify the Exchange of an appropriate office for correspondence with the

Exchange as a liaison office.

2. A J-Adviser shall appoint a person as a liaison responsible for matters concerning reports in

response to inquiries from the Exchange and other correspondence by the Exchange and

notify the Exchange of such person.

3. In the case where the Exchange deems it necessary to make inquiries on the status and

systems of J-Adviser business, the J-Adviser must accurately report the inquiry matters

immediately.

4. In the case where a J-Adviser is not sure of the application or interpretation of any provisions

of the Special Regulations, it must quickly consult the Exchange.


TSE provides support to allow J-Advisers to properly offer advice and guidance to supervised

companies. In particular, for cases where a J-Adviser is not sure of the application or interpretation of

the regulations concerning TOKYO PRO Market, TSE is available for prior consultation by a J-Adviser.

For smooth communication with J-Advisers, TSE asks J-Advisers to set up and notify TSE of a contact

point. TSE may make an inquiry regarding operations of the J-Adviser. TSE also conducts regular

on-site investigations of J-Advisers that supervise any company.

A J-Adviser shall prepare appropriate records regarding content pertaining to operations it

carried out as a J-Adviser including the main content of discussions with a supervised company,

and the content, etc. of advice and guidance provided to a supervised company, and shall keep

such records for five years from the day of carrying out such discussion, or giving such advice

or guidance.


A J-Adviser has obligations to continue to provide advice and guidance to its supervised company

from the listing preparation phase to after listing. In terms of keeping a record of the fact that such

obligations are properly fulfilled for a supervised company, TSE asks J-Advisers to store materials

III J-Adviser

- 33 -

concerning details of discussion with its supervised company as well as advice/guidance given in the

listing preparation phase and after listing.

In the case where a listed company intends to change its supervising J-Adviser and enter with

another J-Adviser agreement prescribed in Rule 313, such other J-Adviser shall notify the

Exchange in advance and investigate and confirm whether such listed company satisfies the

listing eligibility requirements prescribed in Rule 113, and whether such entity is able to fulfill the

obligations prescribed in Part 2, Chapter 3. Thereafter, the J-Adviser must prepare the "Written

Oath Regarding Listing Eligibility" prescribed in Rule 314 and submit it to the Exchange

together with other documents deemed necessary by the Exchange promptly after the

conclusion of such agreement.


When a listed company intends to change its supervising J-Adviser for some reason, the supervising

J-Adviser is required to notify TSE in advance. A new J-Adviser is required to prepare the "Written Oath

Regarding Listing Eligibility" and submit it to TSE upon completion of the internal procedures required

to conclude a J-Adviser agreement with the listed company. In this case, in terms of ensuring that

companies listed on TOKYO PRO Market satisfy a certain level of quality, a J-Adviser is required to

submit documents concerning investigation and confirmation procedures implemented for listing

eligibility and results thereof.

In addition, a J-Adviser has obligations of prior reporting to TSE concerning major organizational

restructuring and termination of J-Adviser agreement with a supervised company and obligations to

report details of J-Adviser operations every year.

3 Cost for Registration as J-Adviser

The following fees are necessary for registration as a J-Adviser.

Fee Amount

Initial registration fee 1 million yen (excluding tax)

Annual registration fee

(Note 1)

(1) When there is no supervised company (Note 2)

200,000 yen (excluding tax)

(2) When there is any supervised company (Note 2)

Number of supervised companies × 200,000 yen (excluding tax)

(Note 1) The annual registration fee is for a period from April to March next year and should be paid by

the end of April.

(Note 2) The number of supervised companies is calculated based on the number of supervised

companies as of the end of December of the previous year.

IV Q&A Concerning TOKYO PRO Market

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This Q&A explains in detail items introduced in this Guidebook. The fundamental principle of

TOKYO PRO Market is its principle-based approach to market management. While this Q&A would

serve as a guide, please handle actual matters based on mutual consultation with your J-Adviser and the

parties involved.

1 Market System

Q1: Does TOKYO PRO Market allow cross listing on another financial instruments exchange

market in Japan?

A1: If cross listing on another exchange market in Japan is approved, an issue that can be traded by

anyone in that market cannot be traded similarly in TOKYO PRO Market because TOKYO PRO

Market is only open to professional investors. Since this will confuse investors and other market

users, an issue is not allowed to list on both TOKYO PRO Market and another financial

instruments exchange market in Japan.

If a company listed on TOKYO PRO Market newly files a listing application to a financial

instruments exchange market operated by TSE (e.g. Mothers or JASDAQ), the company will

need to appoint a TSE trading participant as the lead manager. It can appoint either its

supervising J-Adviser or a different entity.

Q2: For listed companies on TOKYO PRO Market, is it possible to list part of the stocks that

issued by the company additionally?

A2: When listed companies on TOKYO PRO Market issue the same stocks additionally, they have to

list all stocks.

Q3: Please explain the exceptions that allow general investors to buy stocks in TOKYO PRO

Market.

A3: Since TOKYO PRO Market targets professional investors, in principle , general investors cannot

buy stocks. However, purchase by an officer of such listed company who has a majority of

voting rights or continuous purchase by an officer, etc. of such listed company jointly with other

officers according to a certain plan not based on individual investment judgment (shareholding

association) are approved in TOKYO PRO Market as an exception by laws and regulations

(reference: Article 125-2 of the Cabinet Office Ordinance on Financial Instruments Business,

etc.).


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Q4: Please tell us the procedures for describing specified securities information and issuer’s

information when listing specified securities on the TOKYO PRO Market.

A4: The Tokyo Pro Market allows 13 classes of securities, defined as stock certificates under Article 2,

Paragraph 3 of the Special Regulations, to be listed on the market. When listing specified

securities under Article 5, Paragraph 1 of the Financial Instruments and Exchange Act, an

applicant is required to describe relevant items in each form specified for each class of specified

securities under the Cabinet Office Ordinance on Disclosure of Information, etc. on Specified

Securities, in accordance with (1)-m of “Notes on Provision of Specified Securities Information

and Issuer’s Information.” In the case of domestic investment securities, for example, the issuer

is required to state the following information specified in (1)-m of the “Notes on Provision of

Specified Securities Information” and “Notes on Provision of Issuer Filing Information”:

“Outline of Fund,” “Management and Administration,” “Financial Condition of Fund,” “Outline

of Securities Administration,” “Outline of Management Company,” and “Outline of Other

Affiliated Companies,” in accordance with the descriptions required in Form No. 4.3 of the

Cabinet Office Ordinance on Disclosure of Information, etc. of Regulated Securities.

Specifically, this means the descriptions should be made in line with “Outline of Fund” (Part II,

No. 1), “Management and Administration” “Financial Condition of Fund” (Part III, No. 3),

“Financial Condition of Management Company” (Part III, No. 5), “Outline of Domestic

Investment Securities Administration” (Part II, No. 3), “Outline of Asset Management

Company” (Part III, No. 4.1), and “Outline of Other Affiliated Companies” (Part III, No. 4.2).

2 Applicant Company and Listed Company

Q5: How are the listing criteria in Rule 113 of the Special Regulations determined?

A5: Investigation and confirmation of the listing criteria in Rule 113 of the Special Regulations and

whether the criteria are met are primarily left to the supervising J-Adviser. The J-Adviser

determines whether a listing application should be approved based on the standards of the

J-Adviser. In investigation and confirmation of listing eligibility by a supervising J-Adviser, the

J-Adviser is expected to give guidance and advice according to the size and maturity of the

applicant company through effectively monitoring it after listing, for example.

Q6: Is it possible to use both English and Japanese in disclosure material?

A6: TOKYO PRO Market was established for listings by companies, regardless of domicile, that are

looking for risk capital and disclosure materials and documents submitted to TSE can be

prepared in both Japanese and English. Disclosure material can be released in either language or

contain full information in both languages. As such, the use of English in some parts and

Japanese in other parts of the same material is not allowed. Also, either language, once adopted,

should be used continuously to facilitate comparison.


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Q7: Why are entries concerning working capital required in Specified Securities Information

(or Issuer Filing Information)?

A7: As for working capital, it is required in Specified Securities Information (or Issuer Filing

Information) to show investors that the company has sufficient working capital required to

continue business for 12 months after listing. This allows them to understand the amount of

funds necessary to continue its business and judge whether the company has the capability to

raise such funds. The supervising J-Adviser is required to verify the working capital of the

applicant company from the abovementioned perspective as part of the investigation and

confirmation process for listing eligibility.

Q8: One of the listing requirements of TOKYO PRO Market is audit by an audit firm. Does

this audit firm need to be registered with the System for Listed Company Audit Firms?

A8: At TOKYO PRO Market, it is not a prerequisite for the audit firm to be registered with the

Registration System for Listed Company Audit Firms, but audit by a registered audit firm is

desirable. Environments surrounding certified public accountants have significantly evolved due

to the globalization of capital markets and corporate activities, the sophistication of the IT

technologies used by businesses, the adoption of international financial reporting standards,

significant amendments to accounting and auditing standards, and the occurrence of false

accounts by listed companies. Confidence in audit practices carried out by certified public

accountants in an independent capacity also has to be further improved. The environment in

which certified public accountants currently operate requires an audit system more organized

than ever before. From the perspective of CPA independence, it would be unfavorable for the

partners or key employees of an audit firm to engage in the auditing of the same company for a

long time.

Q9: What is a "reverse merger with an unlisted company" prescribed in the Regulations?

What procedures are necessary when a listed company conducts a reverse merger with

an unlisted company?

A9: A "reverse merger with an unlisted company" is also called a "reverse takeover" and

"inappropriate merger, etc." in the current TSE rules.

TOKYO PRO Market allows listing of small companies, and it is considered that such cases of

listing may be observed more in TOKYO PRO Market compared to existing markets.

When a reverse merger is carried out with an unlisted company (when a large unlisted company

merges with a small listed company, and the large unlisted company becomes the actual listed

company), such listed company shall be required to pass a resolution at a general shareholders

meeting concerning the submission of "Security Continued Listing Application Form" to TSE,

attachment of audit report, etc. to the relisting application, and implementation of the reverse

merger with the unlisted company by the time TSE approves relisting.

Q10:In what case may the J-Adviser terminate the J-Adviser agreement?


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A10: In principle, a J-Adviser needs to conclude a J-Adviser agreement with the company planning to

be listed by the time it expresses intent for a listing. A listed company is required to conclude a

J-Adviser agreement with one J-Adviser as long as it is listed on the Exchange. In cases where

this agreement is terminated due to some reason, unless the company concludes a new J-Adviser

agreement with a different J-Adviser within one month, it will be delisted. As such, the

J-Adviser agreement plays an extremely important role in the listing system of TOKYO PRO

Market, and requirements for unilateral termination of the J-Adviser agreement by a J-Adviser is

a factor for maintaining the listing status of a company. Although a J-Adviser agreement itself is

formulated by the J-Adviser, the regulations stipulate that in the case of excess liabilities, etc.,

namely a criterion for delisting, the J-Adviser can terminate its agreement unilaterally.

Q11: When a listed company loses its supervising J-Adviser, does the company need to find

another J-Adviser?

A11: A listed company is required to conclude a J-Adviser agreement with one J-Adviser as long as it

maintains its listing. When terminating such agreement with its current J-Adviser for some

reason, it is necessary to conclude a new agreement with a different J-Adviser.

Q12: Please tell us the rules regarding the deadline for disclosure of earnings results at

TOKYO PRO Market.

A12: The regulations stipulate that details of annual earnings results and interim earnings results

should be disclosed immediately upon their finalization. While there is no predetermined

deadline for disclosure, since earnings results are fundamental corporate information that affect

investment judgment, disclosure is required within two months at the latest. For domestic

companies, disclosure within 45 days is desirable as with other TSE markets.

Q13:Is disclosure of earnings forecast required at TOKYO PRO Market?

A13: Whether to disclose earnings forecast is left to the discretion of the company, and the regulations

do not require such disclosure.

Please note that if a company discloses its earnings forecast, and it is later changed by a certain

level or more, it will be subject to timely disclosure.

Q14:Quarterly disclosure is not required by TOKYO PRO Market rules. Are there any points

to note when providing quarter disclosure?

A14: When providing quarterly disclosure, it is necessary to coordinate with the J-Adviser and the

audit firm on what and when to disclose since market regulations do not prescribe quarterly

disclosure. The table below shows an example of the way to disclose for the listed companies.

【Disclosure of the listed company】

Disclosure First quarter

Interim

accounting

period Third quarter

End of fiscal

year


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Q15:Are there any points to note when disclosing Issuer Filing Information, etc. on the

company website?

A15: TOKYO PRO Market allows a company to choose to disclose Issuer Filing Information, etc.,

not only on the TSE website but also on its own website, considering cases where a foreign

company discloses information based on a time zone of its home country. For domestic

companies, unless the circumstances are exceptional, it is desirable to select disclosure on the

TSE website. Choosing to disclose on the TSE website does not prevent a listed company from

disclosing on its own website after the information is posted on the TSE website.

Q16:Please tell us the relevant disclosure items when the issuer is required to provide an

overview of the J-Adviser agreement in the specified securities information.

A16: The J-Adviser agreement is integral to an initial listing and a continued securities listing for a

company listed on the Tokyo Pro Market. Because the termination of the agreement would result

in the delisting of the listed company, the agreement is determined to be an important agreement

for the purposes of investment decisions. A listed company is therefore encouraged to enhance

the foreseeability of delisting by providing an overview of the J-Adviser Agreement in the

specified securities information. Specifically, the listed company is required to describe the


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following items in the section of “Risks of Business, etc.” of the Specified Securities

Information:

● Items related to the termination of the J-Adviser Agreement;

● Items related to the prior demand obligations for the termination of the agreement;

● Statement to the effect that no factors have occurred that might lead to delisting (if such factors

have occurred, a detailed description of the factors and the views of the supervising J-Adviser on

the possibility of the termination of the agreement); and

● Statement to the effect that delisting might result if such factors were to occur

Q17: What are the necessary documents on the day of applying for listing, approval for listing

and listing date?

A17: Necessary documents on each day are on the table below. It is impossible for the

company to use TDnet before listing date. As a result, the way to disclose those

documents on the day of approval for listing, for instance, uploading on the website of

the company will be one of the option that company could take.

Date Disclosure documents Way to disclose

Applying for

listing

Specific securities information or Issuer filing information Uploading on

website of Tokyo

Stock Exchange

(Uploading on

website of the

company)

Written Oath Regarding Application for Initial Listing

Report Regarding Corporate Governance

Articles of incorporation of the applicant company

※Announcement of applying for listing and Disclosure of

earnings forecast are voluntary

Approval for

listing

Not applicable －

(Uploading on

website of the

company) ※Announcement of approval for listing is voluntary

Listing date

Announcement of statement of accounts regarding listing

on TOKYO PRO Market(Disclosure of earnings forecast

and Short financial result)

Uploading on

TDnet

(Uploading on

website of listed

company) Announcement of selecting the liquidity provider


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3 J-Adviser

Q18:Can a foreign entity become a J-Adviser?

A18: A foreign entity can become a J-Adviser if it fulfills the requirements prescribed by the

regulations to be certified as a J-Adviser. It is desirable for a foreign entity serving as a

J-Adviser to have a contact point (office) in Japan for smooth cooperation with TSE.

Q19:Please explain what corporate finance advisory business means.

A19: As requirements to obtain J-Adviser qualification as well as certification as J-QS within a

J-Adviser, experience in corporate finance advisory business is required. Corporate finance

advisory business includes investigation and confirmation of a company and other business

requiring industrial expertise for providing advice and guidance such as advisory and

examination of financing in the capital market (including initial listing, additional listing, and

M&A), listing support, listed company support, and work concerning timely disclosure.

Q20:Is it possible to include experience at companies other than a J-Adviser in the working

experience of J-QS?

A20: Yes. It is required to have more than three years of experience in corporate finance advisory

business within five years before the application date, including experience at other companies.

Q21:Does the Exchange investigate a J-Adviser and impose punishment for an event that

occurs because its supervised listed company fails to follow advice and guidance

provided by the J-Adviser?

A21: A listed company has obligations as a listed company and is required to fulfilling them, and its

J-Adviser is required to provide advice and guidance for fulfillment of these obligations. Thus,

for any event that occurs because the supervised listed company fails to follow the advice and

guidance provided by the J-Adviser, punishment to such listed company shall be considered, but

investigation may also be conducted on the J-Adviser to check whether it offered appropriate

advice and guidance to its supervised listed company based on TSE regulations.

Q22:What are the steps to be taken for J-Adviser when switching the company to another

J-Advisor?

A22: Advance notice must be submitted to Tokyo Stock Exchange based on exception rule 324 (4) of

the regulations when cancelling J-Advisor contract between listed company. Please contact us a

month before cancelling J-Advisor contract when company planning to switch J-Advisor. Steps

to be taken in that case are as flows.


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1. Advance notice from J-Advisor to listed company that shows cancellation of the contract.

2. Disclosure by listed company that shows change for the J-Advisor

3. Taking over the work from retiring J-Advisor to new J-Advisor

4. Advance notice to Tokyo Stock Exchange base on exception rule 322 of the regulations from

new J-Advisor after investigation of compliance with the criteria for listing and with listing

eligibility requirements

5. J-Advisor contract between new J-Advisor and the company

6. The supervising J-Adviser prepares the "Written Oath Regarding Listing Eligibility" and

"Matters to Note When Preparing Written Oath Regarding Listing Eligibility" and submits them

to TSE after investigating and confirming the listing eligibility requirements.(Another

specified separately document have to be submitted when liquidity provider will be changed)

Q23:What are subject to on-site investigations of a J-Adviser?

A23: The purpose of on-site investigation of a J-Adviser is to assess whether it conducts business in

accordance with TSE regulations. This means that the entire operations of the J-Adviser are

subject to on-site investigation, including the process of investigation and confirmation

concerning listing eligibility of supervised listed companies before listing application and the

status of fulfillment of other obligations as J-Adviser. In an on-site investigation, the operational

system, the status of execution of operations and operational records of the J-Adviser are

checked.

Q24:Is the scope of investigation required by TOKYO PRO Market the same as existing

markets regarding whether the initial listing applicant has no relations with anti-social

forces?

A24: It is the same with the approach of other existing markets. However, investigation is conducted

in the scope that the J-Adviser considers appropriate in the process of investigation and

confirmation of listing eligibility within the framework of TOKYO PRO Market.

Q25:What points should the supervising J-Adviser investigate and confirm when monitoring

the supervised listed company after its listing?

A25: The J-Adviser, especially the supervising J-QS, is required to monitor whether the supervised

listed company manages its operations in compliance with special regulations and the provisions

of the J-Adviser agreement entered with the supervising J-Adviser.

Q26:If analyst reports concerning a supervised listed company are not issued, what kind of

support is required of its J-Adviser?

A26: A company listed on TOKYO PRO Market is required to make efforts toward the regular

issuance of analyst reports regarding the company, and the J-Adviser needs to provide support


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for the widespread issuance of such analyst reports concerning a supervised listed company.

When analyst reports concerning a supervised listed company are not issued, the J-Adviser is

still required to support the supervised listed company to continue the distribution of

information to the market by actively assisting the listed company in its IR (investor relations)

activities, etc.

Q27:When financing is conducted at the time of listing, are there any rules concerning how to

determine a financing price? When listing is carried out without financing, is it necessary

to calculate a stock price?

A27: The listing regulations do not stipulate a method to determine the financing price. As with other

existing markets, when underwriting is conducted at the time of financing for initial listing, book

building would be used. If there is no underwriting, a calculation method the company considers

reasonable would be chosen. In the case of listing without financing, TSE receives calculation

documents of a reference distribution price from the J-Adviser. This price will be the reference

price for mid-price in the order book on the listing date. Calculations of the stock price should

be independent from the listed company.

Q28:Please tell us the issues to consider when the supervising J-Adviser releases

information on the financial position and conditions via a relevant website?

A28: The Tokyo Pro Market institutionally requires a company listed on the Tokyo Pro Market to

maintain a J-Adviser Agreement with a J-Adviser, as specified in Rule 313 of the Special

Regulations, for as long as its listing is maintained. Thus, the J-Adviser is charged with

significant roles with respect to the maintenance of the listing of the listed companies on the

Tokyo Pro Market. Given that the financial position and conditions are determined to be useful

information to investors and supervised listed companies in this context, the Tokyo Pro Market

institutionally requires J-Advisers to release this information via a website, depending on the

attributes of the J-Adviser. Meanwhile, when a J-Adviser has a parent company, this obligation

to release information on financial conditions would be substituted by the issuance of the

parent’s consolidated financial statements (limited to cases where the J-Adviser is a subsidiary

of the parent that prepares the consolidated financial statements).

【When a J-Adviser is a company listed on any of the TSE markets】

The J-Adviser is required to publish the securities report specified in the Financial Instruments and

Exchange Act through the EDINET or its own website.

【When a J-Adviser is a securities broker and trader (financial instruments broker and trader)】

The J-Adviser is required to publish explanatory documents concerning operations and assets

specified in the Financial Instruments and Exchange Act through the EDINET or its own

website.

【When a J-Adviser does not fall under any of the above】


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The balance sheet published as part of the announcement of accounts (digital announcement) will be

published on the J-Adviser’s own website. The publication of the income statement in addition

to the balance sheet is also desired.

(*) If a J-Adviser is a foreign entity, please consult us separately.

V Cost for Listing

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V Cost for Listing

1 Cost Required for Initial Listing

At the time of initial listing, fee for initial listing and fee for issuance of new stock, etc. are required.

Fee Amount Payment date

Initial listing fee

(Note 1) (Note 2) 3 million yen (net of tax)

By the end of month

after the month to

which the listing date

belongs

Fee for Issuance of

New Stock, etc.

(Note 3)

New stock price×Number of stocks issued×9/10000

+

Price at which existing stocks were sold×

Number of stocks sold×1/10000

By the end of month

after the month to

which the listing date

belongs

(Note 1) Unlike other exchange markets, there is no listing examination fee.

(Note 2) This includes cases where a newly-established company, etc. gets relisted on a certain market

of the Exchange due to merger, etc. (as for foreign stocks, etc., only relisting on the

Exchange as its principal market is approved.)

(Note 3) It means issuance of new stock, etc. during the period between the initial listing application

date and the listing date.

(Note 4) Fee for subscription warrant securities is initial listing fee only.

(Note 5) Calculated amount shall be rounded down to the nearest hundred and paid in an amount

including consumption tax and local consumption tax (excluding foreign companies) in

Japanese yen. When any fee is not paid by its payment date, the Exchange can demand 4 sen

per day for every 100 yen in delinquency charge for a period from the day following the

payment date to the day the outstanding amount is paid (The same shall apply hereafter).

(Note 6) When a company is not a stock company, stock(s) mentioned above shall be read as

securities, and other terms shall be replaced accordingly (The same shall apply hereafter).

V Cost for Listing

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2 Cost Paid by Listed Company

A company listed on TOKYO PRO Market is required to pay (1) annual listing fee, (2) fee for

issuance of new stocks, etc. after listing and (3) fee for issuance of new stocks, etc. to acquire company

or business as described below (amounts indicated hereafter excluding tax).

(1) Annual Listing Fee

After listing, it is required to pay the amount listed in the following table plus 120,000 yen (TDnet

usage fee) as annual listing fee.

Market capitalization by listing (billion yen)

Amount Payment date

5 or less 480,000 yen

By the end of February or August

(half of the amount on the left plus

usage fee of TDnet)

More than 5 - 25 or less 1,200,000 yen




More than 500 4,080,000 yen

(Note 1) Annual listing fee is calculated using the final price as of the day of the final trading session in

December that comes immediately before the payment date (including a special bid or ask

price. When no final price is available on such day, the final price as of the most recent day

before such day shall be used instead; the same shall apply hereafter) and the number of listed

stocks as of the end of December every year. As for annual listing fee of an initially listed

company, the amount that is due after listing for the first time shall be calculated on a monthly

basis from the month after that to which the listing date belongs, while annual listing fee that

is due before the day of the final trading session in the first December after listing shall be

calculated using the market capitalization as of the listing date.

(Note 2) In the case of delisting, a listed company is required to pay only the amount calculated on a

monthly basis. In this case, the Exchange shall assume that such company is delisted on the

first day of the month to which the date to of the delisting decision and reimburse the annual

listing fee for the period after the month to which the date of the delisting decision

(reimbursement amounts do not include interest).

(Note 3) As for the annual listing fee of a company whose final price has never been reached since

listing, it shall be determined considering conditions for issuance of new stocks, etc. in

accordance with the regulations stipulated by the Exchange.

(Note 4) Any fee that is not due at the time of delisting shall be paid before the delisting date or a date

separately prescribed by the Exchange (the same shall apply hereafter).

V Cost for Listing

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(2) Fee for Issuance of New Stocks, etc. after Listing

It is required to pay the following fees for issuance of new stocks, etc. by a listed company.


Issuance of new stocks, etc.

New stock price×Number of stocks

issued×9/10000

+

Price at which treasury stock was

disposed×Number of stocks disposed

of×1/10000

+

Price at which stocks were

sold×Number of stocks sold×1/10000

By the end of the month after

the month in which new

stocks were issued

Cases where listed stocks were

issued as a result of conversion

of stocks into a different class

of stocks (Note 1)

Conversion price×Number of new

stocks issued by conversion×9/10000

For new issuance

implemented between January

1 and June 30, by the end of

August of that year;

For new issuance

implemented between July 1

and December 31, by the end

of February next year

Cases where listed stocks were

issued as a result of exercise of

subscription warrants

Exercise price of subscription

warrants×Number of new stocks issued

by exercise×9/10000

(Note 1) As for fee for new stocks issued as a result of conversion of stocks into a different class of

stocks due to delisting or exercise of subscription warrants, it is required to pay the fee for new

stocks issued by a date prescribed by the Exchange.

(3) Fee for Issuance of New Stocks, etc. to Acquire Company or Business

When a listed company issues new stocks, etc. to acquire a company or a business (assuming issuance

of new stocks due to stock exchange or merger, etc.), it is required to pay the following fee.


Fee for issuance of new

stocks or distribution of

treasury stock to acquire

company or business

Total number of stocks issued or

treasury stock distributed to acquire a

company or business×Closing price as

of payment date×1/10000

By the end of the month after the

month in which new stocks were

issued or treasury stock was

distributed

VI Support for Transfers to Other Markets of TSE

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VI Support for Transfers to Other Markets of TSE

1 Support Activities Concerning Market Transfers

The New Listings Department of TSE provides consultation for companies listed on TOKYO PRO

Market which are considering transferring to other markets of TSE, such as Mothers and JASDAQ,

concerning points to remember and issues for making such transfers. The department not only provides

support for transfers but also holds various events for listed companies to help them expand their

business such as business matching and networking events.

2 Mail Magazine

"IPO Center Mail Magazine" is a weekly publication that provides information concerning seminars

and lectures hosted by TSE, Q&A for listing examinations, and a commentary on the listing system.

For questions concerning initial listing such as the listing criteria and details of what to prepare for

listing, feel free to contact us.

IPO Center, New Listings Department, Tokyo Stock Exchange, Inc.

[email protected]

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