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Regulations by Products
Equities
Bonds
Convertible bonds
ETFs
REITs
Futures & Options

Trading Sessions
All stock transaction methods are prescribed in the TSE "Business Regulations".
These "Business Regulations" set out the rules for ensuring fair trading in the
Exchange market, such as kinds of transactions, bids and offers of trading, unit of
trading, and methods of transaction.
(1) Trading Hours

The morning trading session:

9:00 - 11:00 a.m.
The afternoon trading session:
12:30 - 3:00 p.m.
* There will be no afternoon trading sessions on half-day holidays.

(2) Category of Stocks in Terms of Trading Facilities

Stocks traded by the Computer-assisted Order Routing and Execution
System("CORES")
(3) Kinds of Stock transactions
"Regular" transactions
Settlement shall be made on the third business day after the day of transaction
(T+3); provided that transactions made on ex-dividend or ex-rights dates shall be
settled on the forth business day after the day of transaction (T+4).
"Cash" transactions
Settlement shall be made on the day of transaction. "Cash" transactions are
available to cross trading only.
"When issued" transactions
"When issued" transactions are used for new shares issued by companies in capital
increases and stock splits.

These transactions shall be made during the period from the ex-rights date (or the
day following the last day of subscription period) until a TSE-designated date,
occurring on and after the day before the issuance of stock certificates. A margin
deposit (30% of transaction value) is required.

Off-Market Transactions in Listed SecuritiesSecurities firms (including non-

trading participants) are prohibited from executing any customer orders for listed
securities off the exchange market unless specifically instructed by customers to do
so.
When executing customers' orders off the exchange market, securities firms are
required to observe the price parameters set forth by the Japan Securities Dealers
Association during the trading hours of the exchange specified by customers.
Margin Trading
Listing
How does the trading of stocks work on TSE?

As part of ongoing efforts to expand our roster of products, Tokyo Stock

Exchange (TSE) introduced an exciting new ETF market on 1 July 2001. 'TSeTF
Square' is designed to give background information to help first time users
understand this new market, as well as details about specific ETFs listed on the
TSE market.
What are "ETFs"?ETFs (Exchange Traded Funds) are funds or investment trusts
that hold portfolios of stocks, which closely trace the movements of a specific
underlying stock index. ETFs can be bought and sold on the exchange just like
stocks. The prices of ETFs are designed to correspond to the underlying stock
indices, so are readily accessible to investors who can easily follow the
performance of the indices in the media. Since ETFs are based on broad stock
indices, they may offer investors relatively lower risk than investing in individual
stocks.
Additional ETFs may be created by depositing portfolios of stocks ("in-kind
subscription") with trustees, and they may also be redeemed for portfolios of stocks
("in-kind redemption"). ETFs are therefore useful arbitrage tools for broker/dealers
and institutions. This characteristic is expected to contribute to greater liquidity
and to help ensure efficient price formation in both the underlying cash equities
and index futures markets.
Expansion of Investor Base and Trading OpportunitiesDue to the unique product
characteristics of ETFs, they are also expected to attract more individuals to the
stock market, especially those who have little experience in stock investment. And
as stated above, ETFs will provide broker/dealers and institutions with more
trading opportunities.
TSE will continue to engage in promotion and marketing activities relating to TSE
ETF market in order to expand the investor base and increase liquidity in the
market.
Through its strategic alliance with the American Stock Exchange (AMEX), TSE
expects that the TSE ETF market will become one of the core markets for a global
ETF network. The alliance with the AMEX, a global leader and pioneer in ETFs
will include, among other business strategies, joint promotional and marketing
activities.

What are derivatives*Derivatives are financial instruments, whose values are

derived from other financial products, such as stock price indices or fixed income.
By trading derivatives, one can hedge the price volatility risks of underlying assets.
There are a variety of derivatives available all over the world, and they have
become an essential part of the smooth circulation of capital in today's economy.
Differences between Derivative trading and Cash tradingCash SettlementSince
there is no substantial entity in the underlying of a derivative, the settlement
method used for Index Futures such as TOPIX Futures is conducted via cash
transfer only. Cash settlement is the transfer of a cash position rather than the
delivery of the actual principal.
LeverageLeverage transactions allow for a large rate of return for a relatively small
investment. However, this also means that investors carry greater risks in these
transactions.
Exempt from short selling regulationsIn equities trading, investors who are not in a
position to lend equities cannot start by making short selling trades, however in
Futures and Options trading, investors can begin with short selling trades. (Short
selling of Futures or Options are exempt from short-selling regulations.)
What is Tdex*"Tdex" is the nickname of the TSE's Derivatives Market. "T"
stands for "Tokyo", "de" for "derivatives" and "x" for "exchange". The derivative
products listed on Tdex offer investors a variety of effective hedging instruments
and new opportunities for investment. The Tdex derivative market currently
includes not only domestic investors but also many foreign investors. The
following products available on Tdex:
History

In the 1870's, a securities system was introduced in Japan and public bond
negotiation began. This resulted in the request for a public trading institution; and,
the "Stock Exchange Ordinance" was enacted in May 1878. Based on this
ordinance, the "Tokyo Stock Exchange Co., Ltd." was established on May 15,
1878; and trading began on June 1st.
In March 1943, the "Japan Securities Exchange Law" was enacted to reorganize
the Stock Exchange as a war-time controlled institution. On June 30, 1943, 11
stock exchanges throughout Japan were unified and a quasi-public corporation, the
"Japan Securities Exchange", was established (dissolved in April, 1947).
With worsening war conditions and air-raids on the main island of Japan, the
securities market was forced to suspend trading sessions on all securities markets
from August 10, 1945. It was difficult to re-open the Stock Exchange by a
Memorandum of Supreme Commander of Allied Powers (SCAP) in September
1945; however, trading was restarted by unofficial group transactions in December
of 1945.
The Securities and Exchange Law was enacted in March of 1947, and entirely
revised in April of 1948. On April 1, 1949, three stock exchanges were established
in Tokyo, Osaka and Nagoya. Trading on these exchanges began on May 16. In
July of that same year, five additional stock exchanges were established in Kyoto
(merged into Osaka Securities Exchange in March 2001), Kobe (dissolved in
October 1967), Hiroshima (merged into Tokyo Stock Exchange in March 2000),
Fukuoka, and Niigata (merged with Tokyo Stock Exchange in March 2000). In
addition, the Sapporo Securities Exchange was established in April 1950.
Consequently, Japan now has five stock exchanges.