Please note that the original article is in Japanese. The following is a summary of its content.
Nasdaq’s Mission and Strategy in Japan
This article summarizes an interview with Mr. Mikio Sugihara, Nasdaq’s Japan Representative, on the exchange’s activities in Japan and the appeal of a Nasdaq listing for Japanese companies.
Nasdaq’s Tokyo office, established in 2008, initially supported the exchange’s IT and FinTech services business (which constitutes half of Nasdaq’s total revenue) for its Japanese clients. The office began promoting IPOs (listings) around 2010.
Mr. Sugihara explains that their strategy is not a broad-based approach but a highly targeted “point-based” diplomacy. They proactively contact specific Japanese companies with unique technology, innovative business models, or unicorn potential. The goal is to engage companies that would see a demonstrably greater increase in corporate value by listing on Nasdaq versus a domestic market.
Which Japanese Companies Suit a Nasdaq Listing?
Mr. Sugihara notes that while Japan has a strong, deep domestic capital market (TSE), certain types of companies are far better suited for the US market.
Nasdaq is not just for “ventures”; it is the home of the world’s largest companies (top 5 by market cap) and is built for growth and innovation.
The best candidates for a Nasdaq listing are:
- High-Tech (Biotech, some IT): Companies with technology that is difficult for generalist, retail investors to accurately evaluate.
- Pre-Investment Heavy: Companies that are prioritizing heavy R&D and market development spending over short-term profits to achieve long-term growth.
A Fundamental Philosophy: Investor Responsibility vs. Protection
Mr. Sugihara emphasizes a core philosophical difference between the US and Japanese markets:
- Japan (TSE): Operates on a foundational philosophy of “Investor Protection.” This leads to strict listing rules, which often use “profit or loss” as a clear, objective hurdle, effectively screening out many pre-profit, high-growth companies.
- US (Nasdaq): Operates on a philosophy of “Investor Self-Responsibility.” The entire system is built on “proper disclosure.”
In the US, a large, sophisticated ecosystem of professional investors (e.g., fund managers with PhDs in biotech) exists to analyze deep technology and future cash-flow models. As long as all risks are properly disclosed, this “risk money”—the largest pool in the world—will fund innovation. This, he argues, is the environment that allowed companies like GAFA (Amazon) to flourish by prioritizing pre-investment for years.
Demystifying the Listing Standards
Mr. Sugihara addresses a “big misunderstanding” that US listing rules are prohibitively complex. He states that Nasdaq’s formal standards are “simple and clear” with no unwritten rules.
The main review is conducted by the SEC, which focuses almost exclusively on the adequacy of disclosure, not the business model itself. The real challenge is not passing the rules, but earning the valuation of US investors. This requires a clear vision and strategy communicated effectively by the CEO and CFO.
Nasdaq’s Role as a Service Partner
Mr. Sugihara concludes by noting that Nasdaq itself is a public company and views its listed companies as “customers.” Services are tailored to a company’s specific goals—for example, providing massive publicity via the Nasdaq Tower in Times Square for Pepper Food Service, whose goal was brand recognition.
Post-listing, Nasdaq provides dedicated support and critical IR tools, such as an institutional investor database, to help companies analyze their shareholder base and target potential new investors.
