J-Ships：JSDA Shares and Investment trusts for Professionals
This page provides a simple and concise explanation of the recently noted J-Ships (Professional Investor Oriented Securities System), including its overview, merits, and demerits.
Overview
J-Ships (an acronym for JSDA Shares and Investment trusts for Professionals) is a system operated by the Japan Securities Dealers Association (JSDA) that allows only "Professional Investors" (so-called "pro investors") to buy and sell shares, etc., of non-listed companies (unlisted companies).
It differs from an "listing (IPO)" on a regular stock exchange (like the Tokyo Stock Exchange). It is a mechanism that provides a "venue" and "rules" for professional investors to trade unlisted shares among themselves, mediated by securities firms, through simpler procedures than an IPO.
Its purpose is to support the financing of growth companies such as venture businesses and mid-sized enterprises, and to provide new investment opportunities to professional investors.
Merits
J-Ships offers merits to both the "corporate side" (issuers) seeking funds and the "investor side" seeking to invest.
Merits for the Corporate Side (Issuers)
Swift Fundraising: Compared to an IPO (listing), the hurdles for procedures and examinations are lower, making it possible to raise funds faster and at a lower cost.
Reduced Disclosure Burden: Since it does not require disclosure as strict as an IPO, administrative costs can be kept down.
Merits for the Investor Side (Professional Investors)
New Investment Opportunities: It creates chances to invest from an early stage in promising unlisted companies that are usually difficult to invest in.
Demerits / Cautions
While there are merits, there are also significant risks, especially for the investor side.
Demerits for the Corporate Side (Issuers)
Limited Buyers: Because buyers are limited to professional investors, it may be difficult to raise large-scale funds from a wide range of general retail investors as one would with an IPO.
Demerits for the Investor Side (Professional Investors)
High Investment Risk: The investments are in unlisted companies, which often lack the strict audits or information disclosure of listed companies, carrying an extremely high risk of bankruptcy and stock price volatility.
Low Liquidity: Unlike an exchange, there is not always a counterparty available for transactions, making it highly possible that one "cannot sell when wanting to sell" or "cannot buy when wanting to buy" (low liquidity).
Information Asymmetry: Because the disclosed information is limited, making investment decisions becomes difficult.
Related Links
For more detailed information about the system, please check the official website of the Japan Securities Dealers Association.
https://market.jsda.or.jp/shijyo/j-ships/
＠K.Kamitani
Overview
J-Ships (an acronym for JSDA Shares and Investment trusts for Professionals) is a system operated by the Japan Securities Dealers Association (JSDA) that allows only "Professional Investors" (so-called "pro investors") to buy and sell shares, etc., of non-listed companies (unlisted companies).
It differs from an "listing (IPO)" on a regular stock exchange (like the Tokyo Stock Exchange). It is a mechanism that provides a "venue" and "rules" for professional investors to trade unlisted shares among themselves, mediated by securities firms, through simpler procedures than an IPO.
Its purpose is to support the financing of growth companies such as venture businesses and mid-sized enterprises, and to provide new investment opportunities to professional investors.
Merits
J-Ships offers merits to both the "corporate side" (issuers) seeking funds and the "investor side" seeking to invest.
Merits for the Corporate Side (Issuers)
Swift Fundraising: Compared to an IPO (listing), the hurdles for procedures and examinations are lower, making it possible to raise funds faster and at a lower cost.
Reduced Disclosure Burden: Since it does not require disclosure as strict as an IPO, administrative costs can be kept down.
Merits for the Investor Side (Professional Investors)
New Investment Opportunities: It creates chances to invest from an early stage in promising unlisted companies that are usually difficult to invest in.
Demerits / Cautions
While there are merits, there are also significant risks, especially for the investor side.
Demerits for the Corporate Side (Issuers)
Limited Buyers: Because buyers are limited to professional investors, it may be difficult to raise large-scale funds from a wide range of general retail investors as one would with an IPO.
Demerits for the Investor Side (Professional Investors)
High Investment Risk: The investments are in unlisted companies, which often lack the strict audits or information disclosure of listed companies, carrying an extremely high risk of bankruptcy and stock price volatility.
Low Liquidity: Unlike an exchange, there is not always a counterparty available for transactions, making it highly possible that one "cannot sell when wanting to sell" or "cannot buy when wanting to buy" (low liquidity).
Information Asymmetry: Because the disclosed information is limited, making investment decisions becomes difficult.
Related Links
For more detailed information about the system, please check the official website of the Japan Securities Dealers Association.
https://market.jsda.or.jp/shijyo/j-ships/
＠K.Kamitani