Tue, Feb 15, 2005 - Page 10 News List

What is the `Mothers' board all about?

By Joyce Huang  /  STAFF REPORTER

As a competitor to NASDAQ Japan, the Tokyo Stock Exchange created "Mothers," a new stock exchange for high-growth companies, in November 1999.

The name is an acronym for Market Of The High-growth and EmeRging Stocks, and also implies that the market will incubate Japanese ventures as a mother would nurture a child.

The requirements for listing on the "Mothers" board are very loose compared to its predecessors or even NASDAQ Japan, which applies practically the same listing and delisting requirements as NASDAQ, according to the Harvard Asia Pacific Review.

The review added that the emergence of Mothers and NASDAQ Japan opened an exit route for venture capital, as they allow stock investors to invest in a Japanese venture business at its seed stage.

Before the creation of Mothers or NASDAQ Japan, it usually took more than 20 years for a Japanese corporation to go public although they may no longer need fresh capital by that time.

On the Tokyo Stock Exchange Mothers, the standard life of a venture fund is shortened to 10 years, which thus allows more foreign venture funds to invest in Japan.

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