JPX and Nikkei outline new index

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01 Aug 2013

The Japan Exchange Group (JPX), along with the Nikkei, has issued an outline for a new jointly developed stock price index in Japan. The outline provides preliminary information on the index’s positioning, selection method, number of constituents, and calculation. Additional information will be provided in the future with the goal of commencing calculation by the end of the year.

As expected in Japan’s Business Accounting Council report, The Present Policy on the Application of International Financial Reporting Standards (IFRS), the index may consider the use of International Financial Reporting Standards (IFRSs) in selecting the composition of the index. The primary selection method of the index will consist of two quantitative indicators, which are: (1) corporate performance (capital efficiency) and (2) market liquidity (trading volume, market value, etc.). In addition, “qualitative indicators (matters pertaining to disclosure, etc.)" will also be considered in selection process.

The press release of the outline is available on the Tokyo Stock Exchange website.

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