Japan Association of Securities Dealers Automated Quotation (JASDAQ)
What is JASDAQ?
JASDAQ is a Japanese securities market focused on high-growth and emerging companies. Its name reflects origins with the Japan Association of Securities Dealers. Within Japan’s broader market structure, JASDAQ has been one of the sections specifically designed to list startups and smaller, fast-growing firms.
Role within Japan’s market structure
Historically, the Tokyo Stock Exchange (TSE) organized listings across multiple sections: two “main market” sections for large- and mid-cap companies, two startup-focused sections (Mothers and JASDAQ), and a professional-investor-only market. JASDAQ was the section tailored to smaller and growth-stage companies and has been divided internally into standard and growth subsections to reflect differing maturity and listing standards.
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How JASDAQ works
- Listing tiers: JASDAQ has separate subcategories (commonly referred to as standard and growth) with different eligibility and disclosure requirements to match company size and development stage.
- Requirements: Compared with main-market sections, JASDAQ’s thresholds for profitability, capital and shareholder base tend to be less stringent to facilitate access for early-stage companies. However, firms must still meet ongoing reporting and governance obligations.
- Purpose: It provides emerging companies with access to public capital, increased visibility, and a regulated environment for trading shares.
Comparison with Mothers
- Mothers (Market of the High-Growth and Emerging Stocks) similarly targets high-growth, early-stage companies.
- JASDAQ’s internal standard/growth split offers a way to differentiate companies by maturity, whereas Mothers has typically been identified more explicitly with very early-stage, high-growth listings.
Criticisms and reform
Market participants have criticized Japan’s multi-section structure as complicated and fragmented. Each section has distinct listing rules, which can confuse investors and issuers. To simplify the market and clarify investor segments, reforms have been proposed and implemented to consolidate sections into three clearer markets: Prime (top-tier), Standard (mainstream), and Growth (startups and high-growth companies). These changes aim to streamline listing criteria and improve market transparency.
Who benefits from JASDAQ?
- Early-stage and growth-oriented companies seeking capital and a public market presence.
- Investors looking for exposure to smaller, potentially higher-growth Japanese companies (though with higher risk and volatility than larger-cap listings).
Key takeaways
- JASDAQ is a Japan-focused market segment for high-growth and emerging companies.
- It has historically operated alongside Mothers as a startup-focused venue, with internal standard and growth subdivisions.
- Listing rules are generally more accessible than main-market tiers, balancing disclosure and governance with the need to foster new companies.
- Market reforms have moved Japanese exchanges toward a simpler three-segment structure (Prime, Standard, Growth) to reduce fragmentation and improve clarity.