Japan's Fair Trade Commission has approved the merger of Tokyo Stock Exchange (TSE) and Osaka Securities Exchange (OSE). However, the merger is still subject to approvals from the respective shareholders of the two bourses. The shareholders of the two bourses may meet this autumn or near the end of the year to vote on the merger.
The objective of this merging is to make TSE and OSE as Tokyo’s trading center for large corporations like Sony and Toyota, with Osaka’s strength in derivatives-trading. Following the approval, TSE will takeover of the smaller Osaka Securities Exchange (OSE) under the terms announced in November 2011.
The new tentative name for their merger is 'Japan Exchange Group'. If approved from shareholders of TSE and OSE, the two exchanges are scheduled to merge on early January 2013 and it will close much of the gap between Japan’s stock market and Nasdaq, ranked currently second in the world.
Once completed, it will create the world's third-largest and Asia's largest stock exchange.
The move comes as demand for new share sales in Japan has been falling amid an overall slowdown in its economy. Japan's growth has been slowing in recent years and it lost its position as the world's second largest economy to China last year. The slowdown in its economy has also resulted in a decline in the number of companies looking to list on stock exchanges in Japan.
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