Exploring Corporate Governance Around the World

By Allison Garrett, Senior Vice President for Academic Affairs at Oklahoma Christian University

Friday, January 20, 2006

Tokyo Stock Exchange: Shorter Trading Days and System Upgrades

The Tokyo Stock Exchange plans to close early when the number of transactions exceeds 4 million. The high number of transactions has caued the TSE to shutdown twice in recent months.

The system's limit is 4.5 million transactions. Until the system is scaled to accomodate higher trading volumes, the exchange will close 30 minutes early when the 4 million mark is exceeded. The TSE is working to augment the system and has published a schedule for testing upgrades.

After the November 1 shutdown, the TSE decided to issue an advance warning of an early closing. The advance warning this week probably triggered panic selling by investors.

Earlier today, the President of the Tokyo Stock Exchange issued an apology and explanation of the steps being taken to correct the problems. The English version is here: http://www.tse.or.jp/english/news/2006/200601/060120_e.html

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