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Tokyo Stock Exchange Mandates English Disclosures for Prime Market Firms by 2025

TSE's New Rule Aims to Attract Foreign Investors by Requiring English Reporting from Over 1600 Top-Tier Companies
Japan
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The Tokyo Stock Exchange (TSE) is set to make a significant shift towards internationalization by mandating that all companies listed on its top-tier Prime market provide key disclosures in English, starting March 2025. This move, as reported by Nikkei, is aimed at increasing the attractiveness of Japan’s premier stock exchange to foreign investors.

The new requirement will initially apply to the simultaneous disclosure of financial results in both Japanese and English. While 97% of Prime market companies currently publish some documents in English, primarily financial statements, only about 40% release their financial results in both languages at the same time.

Furthermore, the TSE will require companies to disclose information critical to investment decisions, such as earnings forecast revisions, mergers and acquisitions, and changes in executive leadership. Companies unable to meet these requirements by the deadline must set a specific future date for compliance.

This decision follows the establishment of the Prime market in April 2022, which focuses on companies interested in engaging constructively with global institutional investors. The 2021 code of conduct revision for listed companies, preceding the market reorganization, already emphasized the importance of English disclosures. By integrating this requirement into listing rules, the TSE aims to encourage companies to take proactive steps towards broader investor engagement.

The trend of English-language disclosures is gaining traction globally, with non-English-speaking countries like South Korea also increasing their English disclosure requirements. The TSE recognizes the risk of losing foreign investments to other markets if it does not adapt to these international standards, underlining the strategic significance of this policy shift. This move marks a pivotal step in aligning Japan’s leading stock exchange with global market practices, potentially transforming the TSE into a more accessible and attractive platform for international investors.

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