Article by Masahiko KUMADA (MAC)
Private Trading System (PTS) for Unlisted Companies’ Shares will soon Launch in Japan
A private Trading System (PTS) refers to an electronic trading market system platform for trading securities such as stocks and bonds. Securities companies operate this platform. Under the current system, even professional investors are prohibited from trading unlisted stocks in Japan. However, the Japanese Financial Services Agency announced PTS for Unlisted Companies’ Shares will be available.
US individual investors can trade at OTC
Meanwhile, US individual investors can trade at OTC (Over the Counter) markets. There are also financial platforms where institutional and individual investors can trade. Just to be sure, these individual investors refer to those with more than a certain amount of assets.
Needless to say, this environment makes the capital policy more flexible. Firstly, it will make it possible for founders and stakeholders from the first stage to earn profits before listing. Secondary, venture capital that had invested in the company since its inception can also exit before the listing without any rush.
What led the US to create more Unicorn Companies
As a result, founders of these start-up companies have enough time to prepare for company management before it goes public. These factors lead the US to create more privately held companies with market capitalizations of US$1 billion or more. Needless to say, ‘’Unicorn Company’’ is the right name for it. Facebook’s trading helped them expand its scale. Twitter and LinkedIn trading also supported them build momentum.
New launched PTS in Japan will be targeted at institutional and professional investors. This system brings benefits not only to the company.
In general, the fund side places high importance on investment return. On the contrary, companies attach immense importance to creating suitable capital strategies Venture capital and PE funds will be able to advise on how to promote corporate growth by filling the gap between the two sides; the fund and the company.
In addition, with the stock market currently in a major downtrend, it is difficult to exit through an IPO. Considering the difficulty of IPOs and stock valuations, it may be helpful to remain unlisted to provide liquidity.
Will PTS be a superhero for the Japanese economy?
Can Japan revive its stagnant economy? Why do we find a small number of unicorn companies in Japan? In fact, discussing how to incorporate a world-class unicorn company had been a top priority topic over the past years.
PTS launch for unlisted companies’ shares in Japan could be a superhero to solve the problem.
—————————————–
Masahiko KUMADA
Follow us !!
＜LinkedIN＞ Masahiko KUMADA
＜Twitter> @tunecapital
＜Website＞Tune Capital AG Group
—————————————–