Tokyo Stock Exchange, Inc.

(TSE) calculates and publishes TOPIX(Tokyo Stock Price Index) and its sub-indices including TOPIX New index Series etc. Each index is free-float adjusted market capitalization-weighted and reflects market movements of the market capitalization to its base market value. The characteristics of indices are as follows.

1.TOPIX (1)TOPIX
TOPIX is a free-float adjusted market capitalization-weighted index that is calculated based on all the domestic common stocks listed on the TSE First Section. TOPIX shows the measure of current market capitalization assuming that market capitalization as of the base date(January 4 ,1968) is 100 point.

(2)TOPIX New Index Series

TOPIX New Index Series (TOPIX Core30, TOPIX Large70, TOPIX 100, TOPIX Mid400, TOPIX 500, TOPIX 1000, TOPIX Small) are selected based on free-float adjusted market capitalization and liquidity from the companies completed its listed as of the base date for selection. TOPIX New Index Series shows the measure of each current market capitalization assuming that market capitalization as of the base date(April 1 ,1998) is 1,000 point. (The base date of only TOPIX 1000 is September 12, 2003) TOPIX New Index Series are classified as follows:

TOPIX Core30
The 30 most liquid and highly market capitalized stocks

TOPIX Large70
After the Core30, the 70 most liquid and highly market capitalized stocks

TOPIX 100
Component stocks in the TOPIX Core30 and the TOPIX Large70

TOPIX Mid400
Excluding TOPIX 100 stocks, these are the remaining stocks in the TOPIX 500

TOPIX 500
Component stocks in the TOPIX Core30, the TOPIX Large70 and the TOPIX Mid400

TOPIX 1000
Component stocks in the TOPIX 500 and highly market capitalized stocks of the TOPIX small

TOPIX Small
Outside the component stocks in the TOPIX 500

Component stocks of TOPIX new index series

(3)TOPIX Sector Indices

TOPIX Sector Indices consists of indices created by dividing the constituents of TOPIX into the following 33 categories according to the industrial sectors defined by the Securities Identification Code Committee (SICC). Fishery, Agriculture & Forestry Mining Construction Foods Textiles and Apparels Pulp and Paper Chemicals Pharmaceutical Oil and Coal Products Rubber Products Glass and Ceramics Products Iron and Steel Nonferrous Metals Metal Products Machinery Electric Appliances Transportation Equipment Precision Instruments Other Products Electric Power and Gas Land Transportation Marine Transportation Air Transportation Warehousing and Harbor Transportation Service Information & Communication Wholesale Trade Retail Trade Banks Securities and Commodities Futures Insurance Other Financing Business Real Estate Services The TOPIX Sector Indices shows the measure of current market capitalization assuming that market capitalization as of the base date(January 4 ,1968) is 100 point.

(4)TOPIX-17 Series
TOPIX-17 Series Indices consists of indices created by dividing the constituents of TOPIX into the following 17 categories based on the 33 sectors according to the industrial sectors defined by the Securities Identification Code Committee (SICC). Index Name TOPIX-17 FOODS Constituent (Current 33 Sectors) Fishery, Agriculture & Forestry Foods Mining Oil and Coal Products Construction TOPIX-17 CONSTRUCTION & MATERIALS Metal Products Glass and Ceramics Products Textiles and Apparels TOPIX-17 RAW MATERIALS & CHEMICALS Pulp and Paper Chemicals TOPIX-17 PHARMACEUTICAL TOPIX-17 AUTOMOBILES & TRANSPORTATION EQUIPMENT Pharmaceutical Rubber Products Transportation Equipment Iron and Steel Nonferrous Metals Machinery Electric Appliances

TOPIX-17 ENERGY RESOURCES

TOPIX-17 STEEL & NONFERROUS METALS TOPIX-17 MACHINERY TOPIX-17 ELECTRIC APPLIANCES & PRECISION

INSTRUMENTS

Precision Instruments Other Products

TOPIX-17 IT & SERVICES, OTHERS

Information & Communication Services

TOPIX-17 ELECTRIC POWER & GAS

Electric Power and Gas Land Transportation

TOPIX-17 TRANSPORTATION & LOGISTICS

Marine Transportation Air Transportation Warehousing and Harbor Transportation Service

TOPIX-17 COMMERCIAL & WHOLESALE TRADE TOPIX-17 RETAIL TRADE TOPIX-17 BANKS

Wholesale Trade Retail Trade Banks Securities and Commodities Futures

TOPIX-17 FINANCIALS (EX BANKS)

Insurance Other Financing Business

TOPIX-17 REAL ESTATE

Real Estate

TOPIX-17 Series Indices shows the measure of current market capitalization assuming that market capitalization as of the base date (December 30, 2002) is 100 point.

(5)Size-based TOPIX Sub-Indices

Size-based TOPIX Sub-Indices consist of three indices crated by dividing the component Stocks of TOPIX into three categories based on the TOPIX New Index Series. The series is classified according to market capitalization and liquidity. TOPIX Large-Sized Stocks Index: Component stocks of TOPIX 100 TOPIX Medium-Sized Stocks Index: Component stocks of TOPIX Mid 400 TOPIX Small-Sized Stocks Index: Component stocks of TOPIX Small

(6) TOPIX Style Index Series

The TOPIX Style Index Series will use those indices linked to actual PBR (consolidated basis) such as the TOPIX, etc. and will categorize constituents according to their value and growth. ).(TOPIX Value, TOPIX Growth, TOPIX 500 Value, TOPIX 500 Growth, TOPIX Small Value, TOPIX Small Growth) This series will display each style index's degree of current market capitalization by assuming market capitalization is 1,000 points as of the base date of November 25, 2008 (Calculation to begin on February 9, 2009). .

(7) Dividend Index

Tokyo Stock Exchange, Inc. (TSE) begin calculation and publication of the "TOPIX Dividend Index" and "TOPIX Core30 Dividend Index" which index the amount of dividends to be obtained if the component stocks of TOPIX or TOPIX Core30 were held during the index calculation period. (Calculation to begin on July 22, 2010)

2.Tokyo Stock Exchange Second Section Stock Price Index

Tokyo Stock Exchange Second Section Stock Price Index is a free-float adjusted market capitalization-weighted index that is calculated based on all the domestic common stocks listed on the TSE Second Section. TOPIX shows the measure of current market capitalization assuming that market capitalization as of the base date(January 4 ,1968) is 100 point.

3.Tokyo Stock Exchange Mothers Index

TSE has calculated and published the Tokyo Stock Exchange Mothers Index starting September 16, 2003, reflecting growing demands to introduce a comprehensive measure of the change on the TSE Mothers market in accordance with the increase in companies listed on the market. The Tokyo Stock Exchange Mothers Index is a free-float adjusted market capitalization-weighted index based on domestic stocks listed on Mothers and is calculated with the same methodology used for calculation of TOPIX (Tokyo Stock Price Index). Index value is published on a real-time basis through TSE's website. The Tokyo Stock Exchange Mothers Index shows the measure of current market capitalization assuming that market capitalization as of the base date(September 12, 2003) is 1000 point.

4.Tokyo Stock Exchange REIT Index (1)Tokyo Stock Exchange REIT Index
TSE has calculated and published the Tokyo Stock Exchange REIT Index from April 1, 2003, reflecting both further reinforcement of investment infrastructure for the J-REIT market, established in September 2001 on the TSE, and strong demands by users to introduce a benchmark for the market. The Tokyo Stock Exchange REIT Index is a capitalization-weighted index based on all REITs* listed on the TSE and is calculated with the same methodology used for the calculation of TOPIX (Tokyo Stock Price Index). The Tokyo Stock Exchange Mothers Index shows the measure of current market capitalization assuming that market capitalization as of the base date(March 31, 2003) is 1000 point.

(2) Tokyo Stock Exchange REIT Property Sector Index Series

The Tokyo Stock Exchange REIT Property Sector Index Series was launched on June 21, 2010. Its constituents are selected from the constituent universe of the Tokyo Stock Exchange REIT Index based on the use of the properties subject to investment by each REIT. The series is composed of three indices: Tokyo Stock Exchange REIT Office Index, Tokyo Stock Exchange Residential Index, and Tokyo Stock Exchange Retail & Logistics, Others Index. The Tokyo Stock Exchange REIT Property Sector Index Series shows the measure of current market capitalization assuming that market capitalization as of the base date (February 26, 2010) is 1,000 point.

5.Ex-TOPIX
TSE introduced TOPIX free-float weight in three phases from last business day of October 2005. In addition to the free-float adjusted TOPIX, in consideration of the role of Ex-TOPIX as an economic indicator in the past, TSE has calculated and published "Ex-TOPIX" since October 31, 2005.

6.TSE Composite Index Series

The indices within the "TSE Composite Index Series" (TOPIX Composite, TOPIX Composite 1500, Tokyo Stock Exchange Second Section Composite Index, Tokyo Stock Exchange Mothers Composite Index) are designed to cover a broader universe of constituents. They will incorporate domestic class stocks, foreign stocks with exclusive listings on the TSE, and domestic preferred subscription certificates in addition to the existing TOPIX Index Series which are comprised only of domestic common stocks. This series will reflect each index's degree of current market capitalization by assuming market capitalization is 1,000 points as of the base date of February 6, 2009 (Calculation began on February 9, 2009).

TOPIX Composite
Includes all domestic common stocks, domestic classified stocks, foreign stocks listed exclusively on the TSE, and domestic preferred subscription certificates

TOPIX Composite 1500

Constituents are selected based on free-float adjusted market capitalization and liquidity from the TOPIX Composite companies.

Tokyo Stock Exchange Second Section Composite Index

Includes all domestic common stocks, domestic classified stocks, foreign stocks listed exclusively on the TSE, and domestic preferred subscription certificates

Tokyo Stock Exchange Mothers Composite Index

Includes all domestic common stocks, domestic classified stocks, foreign stocks listed exclusively on the TSE, and domestic preferred subscription certificates. (Note) Although domestic preferred subscription certificates have no "Section" in the listing rules, they are included in any indices based on free-float market capitalization and trading value.

Component stocks of TOPIX Composite 1500

7. Tokyo Stock Exchange Dividend Focus 100 Index

The Tokyo Stock Exchange Dividend Focus 100 Index is an index which places focus on the estimated dividend yields of its constituent issues. The index will be made up of the top 100 issues (90 stocks, 10 REITs) which have large market capitalization and high estimated dividend yield, out of constituent issues of the TOPIX 1000 and Tokyo Stock Exchange REIT Index.

8. TOPIX Active in Asia Index

TOPIX Active in Asia Index is comprised of 25 issues from the TOPIX 500 universe based on criteria such as market value and sales in the Asia/Oceania region

9. Tokyo Stock Exchange Mothers Core Index

Tokyo Stock Exchange Mothers Core Index is comprised of 15 issues from common domestic issues listed on the TSE Mothers market selected by the TSE based on criteria such as market value, trading value, net profit and dividends.

10. Currency Hedge Indices

TSE calculates the TOPIX Total Return Euro Hedged Index to satisfy the market demands of capturing the return of currency-hedged indices. TOPIX Total Return Euro Hedged Index is an index which is calculated by hedging beginning-of-period balances using rolling one-month EUR-JPY currency forward contracts. This calculation method is based on methodology of S&P (Standard&POOR's) and this index uses a hedge ratio of 100%.

11.TOPIX Risk Control Index

The TOPIX Risk Control Index is design to satisfy the market demands of tracking the return of a strategy that applies dynamic exposure to an underlying index in an attempt to control the level of volatility.

12.Tokyo Stock Exchange Leveraged and Inverse Index

TSE Leveraged Indexes apply a positive multiple to the daily rate of return of the base index, and are designed to act as indicators for leveraged investment in each base index. TSE Inverse Indexes apply a negative multiple to the daily rate of return of the base index, and are designed to act as indicators for investments that move inversely (or a multiple of inverse movement) to the base index.

13.Customized indices
TSE calculates customized indices in order to respond the various investor needs which accompany diversified asset management. Customized indices are order-made indices that are calculated according to the specific requests of their users.

14.S&P/TOPIX150 (1) S&P/TOPIX150

S&P/TOPIX 150, a market capitalization weighted index, includes 150 highly liquid securities selected from each major sector of the Tokyo market, and represents approximately 70% of the market value of the Japanese equity market. The constituents of S&P/TOPIX 150 are reviewed by the index committee composed of the representatives of TSE and Standard & Poor's.

(2) S&P/TOPIX 150 Shariah Index

S&P/TOPIX 150 Shariah index includes Japan-traded stocks selected from the total S&P/TOPIX 150 universe with respect to each company's compliance with Islamic canonical law. S&P Shariah Indices are screened by Ratings Intelligence Partners, a Kuwait-based consulting company specializing in the Islamic investment market. Ratings Intelligence Partners researchers interface directly with a dedicated Shariah Supervisory Board. The Board is comprised of a group of Islamic scholars whose role is to interpret business issues as well as financial practices and recommend actions in relation to Shariah index management.

(3) S&P/TOPIX 150 Carbon Efficient Index

The S&P/TOPIX 150 Carbon Efficient Index retains the same constituents as the underlying S&P/TOPIX 150 index. And it utilizes the Carbon Footprint metric to compare the relative emissions of different companies within particular sectors and adjust the weight of each component within the index accordingly. The Carbon Footprint metric is calculated by Trucost Plc and is defined as the company's annual greenhouse gas emissions assessment, expressed as tons of carbon dioxide equivalent, divided by annual revenues. The S&P/TOPIX 150 Carbon Efficient Index tracks the performance of the underlying index to within 1%, while offering far lower total carbon emissions exposure for the index portfolio as a whole. (Figure of TSE indices)

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 - 11:30 a.m. The afternoon trading session: 12:30 - 3:00 p.m.

(2) Kinds of Stock transactions

"Regular" transactions Settlement shall be made on the third business day after the day of transaction (T+3); "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.

(3) Minimum Price Fluctuations Price per share (yen) up to up to up to up to up to up to up to up to up to up to over 3,000 5,000 30,000 50,000 300,000 500,000 3 million 5 million 30 million 50 million 50 million 1 5 10 50 100 500 1,000 5,000 10,000 50,000 100,000 Minimum price fluctuations (yen)

(4) Trading Unit of Stocks The number of shares which constitute one unit is determined by the Constitution of each listed company in accordance with Article 221 of the Commercial Code (2001). (5) Types of Orders

Market orders Limit orders

(6) Special Bid/Ask Quotes When there are bids or offers which are outside the reasonable price range from the standpoint of price continuity, TSE indicates a "special bid quote" or a "special ask quote" in order to notify the public of the existence of such orders. The special bid/ask quotes maybe renewed at intervals of 3 minutes or more as deemed appropriate by TSE within the price parameters (*1) set out by TSE. (7) Sequential trade Quotes In the case of continuous increase / decrease in execution prices of a single order that exceeds twice the range of the special quote parameters from the previous price, a "sequential trade quote" will be displayed at the said price, and it shall be subject to the Itayose method. (8) Daily Price Limits TSE has established daily price limits (*2), based on stocks' previous day's closing prices, beyond which prices may not swing. These limits protect investors from distorted price formation as a result of a speculative market or when the supply/demand balance is broken.

Trading Participants
Securities firms trading securities in the market of the Exchange

Transaction Methods

(1) Auction market principles: "price priority" & "time priority" (2) "Itayose" method: for opening trades, etc."Zaraba" method: continuous trading o Itayose method Orders to be executed in following order:

All market orders All limit orders to sell (buy) at prices lower (higher) than the anticipated transaction price The entire amount of limit orders to sell or buy at the anticipated transaction price

*1 Renewal of Special Quotes Parameters Last Special Quote (yen) Less than Less than Less than Less than 200 500 700 1,000 5 8 10 15 Parameters (yen)

Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than 50 million or more

1,500 2,000 3,000 5,000 7,000 10,000 15,000 20,000 30,000 50,000 70,000 100,000 150,000 200,000 300,000 500,000 700,000 1 million 1.5 million 2 million 3 million 5 million 7 million 10 million 15 million 20 million 30 million 50 million

30 40 50 70 100 150 300 400 500 700 1,000 1,500 3,000 4,000 5,000 7,000 10,000 15,000 30,000 40,000 50,000 70,000 100,000 150,000 300,000 400,000 500,000 700,000 1 million

Note:This table also used as the yardstick for the maximum trade-to-trade price change. *2 Daily Price Limit Previous Day's Closing Price/Special Quote (yen) Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than Less than 100 200 500 700 1,000 1,500 2,000 3,000 5,000 7,000 10,000 15,000 20,000 30,000 50,000 70,000 100,000 150,000 200,000 300,000 500,000 700,000 1 million 1.5 million 2 million 3 million 30 50 80 100 150 300 400 500 700 1,000 1,500 3,000 4,000 5,000 7,000 10,000 15,000 30,000 40,000 50,000 70,000 100,000 150,000 300,000 400,000 500,000 Daily Price Limits (yen)

Less than Less than Less than Less than Less than Less than Less than 50 million or more

5 million 7 million 10 million 15 million 20 million 30 million 50 million

700,000 1 million 1.5 million 3 million 4 million 5 million 7 million 10 million

Off-Market Transactions in Listed Securities

Securities 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.

History
Update : Nov. 05, 2001

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.

TSE Historical Highlights

May 15, 1878 "Tokyo Stock Exchange Co., Ltd." established. Jun. 30, 1943 Apr. 16, 1947 Apr. 1, 1949 Jun. 1, 1951 Apr. 2, 1956 "Japan Securities Exchange", a quasi-governmental organization, created by a merger of all existing stock exchanges in Japan.

"Japan Securities Exchange" dissolved.

"Tokyo Stock Exchange" in the present form founded (opened on May 16). Margin transactions introduced. Bond trading started.

Oct. 2, 1961 Oct. 1, 1966

Second Section for stocks opened. Government bonds listed for the first time after World War II. New auction process put into practice with abolition of "Baikai" trades (off-exchange trades by members reported as TSE contracts) Licensing system for securities companies introduced in place of registration system. TOPIX (Tokyo Stock Price Index) inaugurated (January 4,1968=100).

Oct. 2, 1967

Apr. 1, 1968 Jul. 1, 1969

May 11, 1970 Trading in convertible bonds started. Oct. 15, 1970 TSE joined the International Federation of Stock Exchanges(FIBV). Jul. 19, 1971 Book Entry Clearing System for stocks introduced. Apr. 2, 1973 Dec. 18, 1973 Sep. 24, 1974 Apr. 1, 1977 Jan. 23, 1982 Yen-based foreign bonds listed for the first time.

Foreign Stock Section opened.

Market Information System (MIS) put into operation.

Ad valorem brokerage commission system introduced.

Computer-assisted Order Routing & Execution System (CORES) introduced.

May 13, 1985 Trading started in new market building. Oct. 19, 1985 Trading in 10-year Japanese government bond futures started. Feb. 1, 1986 10 securities companies including first 6 foreign companies joined the TSE membership.

May 23, 1988 22 securities companies including 16 foreign companies joined the TSE membership. Sep. 3, 1988 Trading in TOPIX futures started.

Oct. 20, 1989 Trading in TOPIX options started. Dec. 1, 1989 Trading in U.S. T-Bond futures started. May 11, 1990 Trading in options on Japanese government bond futures started. Nov. 19, 1990 Nov. 26, 1990 Oct. 9, 1991 Apr. 1, 1994

10 securities companies including 3 foreign companies joined the TSE membership.

Floor Order Routing and Execution System (FORES) introduced.

Central Depository & Clearing System began its operation. Partial (over 1 billion yen) deregulation of brokerage commission was effected.

May 29, 1995 Investment Trust Beneficiary Certificate linked to "Nikkei 300 Stock Index Listed Fund" listed. Feb. 16, 1996 Jul 18, 1997 Jan. 23, 1998 Apr. 1, 1998 Apr. 2, 1998 Jun. 29, 1998 Jul. 1, 1998

Trading in 5-year Japanese government bond futures started.

Trading in equity options started.

Trading in sector-stock price index futures started.

Partial (over 50 million yen) deregulation of brokerage commission was effected. Calculation of new stock price index series started.

ToSTNeT introduced.

TDnet (Timely Disclosure Network) system introduced.

Dec. 1, 1998 Abolition of restriction on off-exchange trading for listed securities. Apr. 2, 1999 Apr. 30, 50th Anniversary Ceremony was held. Stock trading floor was closed.

1999 Jun. 1, 1999 Oct. 1, 1999 Oct. 1, 1999 Nov. 11. 1999 Mar. 1. 2000 May 9. 2000 Target (TSE wide area network) introduced. Liberalization of brokerage commission. Abolition of the fixed number of members was effected.

The MOTHERS market for high-growth and emerging companies established

Hiroshima and Niigata stock exchanges merge into TSE Opening of TSE ARROWS

Nov. 1. 2001 Tokyo Stock Exchange, Inc. established after demutualization of TSE Jan. 14, 2003 Aug.1.2007 Oct.17.2007 Nov.1.2007

Commencement of operations at Japan Securities Clearing Corporation

Tokyo Stock Exchange Group, Inc. established Establishment of Tokyo Stock Exchange Regulation Commencement of operations at Tokyo Stock Exchange Regulation

Opening of the former Tokyo Stock Exchange to the early Showa era Appearance of the former Tokyo Stock Exchange at the time of its foundation

The former Tokyo Stock Exchange, which was the predecessor of the current Tokyo Stock Exchange, was founded. (May, 1878)

Floor trading at the former Tokyo Stock Exchange in the early Meiji era

In the early Meiji era, floor clerks worked in kimono. (In the 1880s)

Floor trading at the former Tokyo Stock Exchange in the middle of the Meiji era

In the middle of the Meiji era, the stock trading floor was renewed as the scale of the market expanded. The most actively traded stock was the former Tokyo Stock Exchange's stock. (In the 1890s)

Floor trading at the former Tokyo Stock Exchange in the early Showa era

In the early Showa era, a great deal of government bonds were issued during wartime. (In the 1930s)

Opening of the Japan Securities Exchange to opening of the current Tokyo Stock Exchange Opening ceremony of Japan Securities Exchange

11 exchanges across the country were merged into the Japan Securities Exchange with the former Tokyo Stock Exchange's stock incorporated into the controlled economy during wartime. (March, 1943)

Dome under the control of General Headquarters of the Allied Forces (GHQ)

Floor trading was suspended in August 1945 with aggravation of the war situation. After the war ended, the stock trading floor was occupied by the GHQ until January 1948. (Around 1946)

Floor trading at the time of reopening of Tokyo Stock Exchange

The Japan Securities Exchange was dissolved in 1947 while a large number of shares were reallocated to public investors due to a breakup of Japanese "Zaibatsu" conglomerates. Possessing stocks immediately became popular with securities privatization and promotions. Trading at the Tokyo Stock Exchange resumed in May, 1949. (May, 1949)

Placing trading posts at the time of opening of Tokyo Stock Exchange

12 U-shaped trading posts were placed at the time of opening of Tokyo Stock Exchange. (May 1949)

1959 to the end of the former stock trading floor Black Boards at the stock trading floor

Prices of transactions were written on the black board with chalk. (1959)

Floor trading in the 1960s

In the 1960s, the securities industry suffered from the heaviest blow in the postwar era due to the slumping economy and sluggish stock and investment trust trading. In January 1968, the regulatory frameworks of securities companies were shifted to a licensing system. (In 1969)

Floor trading when the market price information system began operations

The prices of stocks were displayed on the electronic signboard when the market information system began operating at the stock trading floor. (September, 1974)

GEKITAKU (clappers which were beaten when transactions were executed)

GEKITAKU trading, group competitive call auction trading started in the middle of the era where stocks issued by Tokyo Stock Exchange were traded in December 1900, and continued until December 1982. (In the 1980s)

Floor trading in the 1980s

The former stock trading floor in the 1980s is shown to the right.

Opening of the new stock trading floor to its closing Opening ceremony of the new stock trading floor

Upon the completion of the new stock trading floor building, the floor was opened on the site of the former main building. (May 1985)

Floor trading at the new stock trading floor (1)

A boom in stocks started around 1985 when the new stock trading floor was opened. (In the latter half of the 1980s)

Floor trading at the new stock trading floor (2): Introduction of a system to streamline operations at stock trading floor(November, 1990)

TSE computerized relevant operations at the stock trading floor, such as placing and matching orders, which had been done manually. With the computerization of the operations, placing orders on-line became possible also for stocks traded in the stock trading floor if the order was a small lot (less than specific volume), which resulted in accelerating computerization of relevant operations at the stock trading floor.

Floor trading at the new stock trading floor (3)

Accelerating the computerization gradually reduced the number of clerks on the stock trading floor. (Mid-1990s)

Last closing session of the year on the stock trading floor

The last closing session of the year on the stock trading floor is shown to the left. A large number of people involved in the securities industry packed the stock trading floor, reminiscing about the old days and hoping to make a life-long

memory. (On December 30, 1998)

Last opening session of the year on the stock trading floor

The last opening session of the year on the stock trading floor is shown to the right. This is the last look at employees in kimono, which was the established custom of Tokyo Stock Exchange. (January 4, 1999)

Summary
The operational flow from trade execution to settlement is divided into three phases; 'trading in markets,' 'clearing at the clearing organization' and 'settlement at settlement organizations.' In Japan, there are six stock exchanges including TSE. The clearing operations are conducted by Japan Securities Clearing Corporation (JSCC) for equity and fixed income products traded on these markets. In the past, each exchange market had its own clearing institution. However, since January 14, 2003, the exchanges have entrusted clearing of transactions to JSCC, which has provided cross-market clearing operations. The clearing operations on TSE Derivatives have also been conducted by JSCC since February 2, 2004.

Japan Securities Clearing Corporation (JSCC) website Trades cleared by JSCC are settled at the following organizations. Stocks and convertible bonds ---Japan Securities Depository Center, Inc. (JASDEC)

Japanese government bonds---The Bank of Japan Funds---The Bank of Japan or commercial banks which JSCC designates as fund settlement banks

Functions / Roles of Organizations related to Trading, Clearing, Settlement

Clearing Organization
The main functions of the clearing organization are assumption of obligations from participants, cross-market netting, settlement instruction, and settlement guarantee.

Assumption of obligations
When transactions are effected, sellers have the obligation of delivering securities and the right of receiving cash, and buyers have the obligation of paying cash and the right of receiving securities. The clearing organization assumes these obligations and acquires these rights as a central counterparty (CCP) between sellers and buyers. As a result of this assumption of obligations, the counterparty for settlement is changed from the original trading counterparty to the clearing organization. Therefore all participants can trade without worrying about the credit risk of the trading counterparty. Thus, clearing operations become more efficient.

Netting
The clearing organization offsets the selling and buying amounts of securities and cash to be settled on the same day for mitigation of settlement volume. Securities are netted by issue while cash is netted on the basis of total amount of payment and receipt.

Settlement instructions
The clearing organization determines the settlement amount, notifies each clearing participant of that amount, and then notifies the settlement organizations so they may conduct settlement. Depending on the settlement method, there may be cases where the clearing participant gives instruction to the settlement organization in accordance with notification from the clearing organization. Stocks, etc. cleared by JSCC, and eligible for JASDEC, are settled on a DVP basis.

Settlement guarantee
Since the clearing organization, as a CCP, assumes the obligations and acquires the rights of settlement for the executed transaction, it has to finalize settlement between participants even if a participant fails to conduct settlement. This system enables every market participant to trade securely. If a loss occurs in the clearing organization because a clearing participant fails to conduct settlement, JSCC provides a settlement guarantee scheme as follows. ---The loss is compensated using the defaulting participant's assets, such as its clearing fund deposited with JSCC. ---If such amount is insufficient, other participants must compensate for it. This scheme is based on the principle of self-responsibility on the part of the defaulting participant, but if that is not enough a mutual guarantee is provided by other clearing participants.

Settlement Organization Japan Securities Depository Center, Inc.

Japan Securities Depository Center, Inc. (JASDEC) is the book-entry transfer institution in accordance with the Act on Transfer of Bonds, Shares, etc. which facilitated the dematerialization of a wide range of securities. All domestic listed stocks became paperless in January 2009. JASDEC offers following services. 1. Book-entry transfer for stocks, etc. 2. Book-entry transfer for commercial papers 3. Book-entry transfer for corporate bonds 4. Book-entry transfer for investment trusts 5. DVP settlement services for off-exchange transaction deliveries 6. Pre-settlement matching system 7. Custody services for foreign stocks 8. Other businesses Settlement of securities related to regular stock transactions in the exchange market is conducted on the third business day after the transaction date (T+3) through book-entry transfer between JSCC's account and the clearing participant's account at JASDEC. Settlement of securities between customers and securities companies is conducted through book-entry transfer to or from the customer's account at securities companies, etc. Please refer to the JASDEC website for more information.