The Tokyo Stock Exchange and the American Stock Exchange signed a memorandum Tuesday on a strategic alliance to promote cross listings of exchange-traded funds. The organizations will jointly build a platform to enable investors to buy and sell ETFs, index-based mutual funds that can be traded throughout the day, on both exchanges.
To list AMEX-listed ETFs on the domestic marketplace, the TSE must get regulatory approval from the state and reform its computer systems, TSE President and CEO Masaaki Tsuchida said.
For the time being, the stock exchanges will cooperate to educate investors about ETFs and promote marketing in Japan, officials of the two organizations said.
AMEX introduced ETFs in 1993 and about 100 ETFs are listed on the marketplace. The TSE, Japan's largest exchange, is planning to list four ETFs, Tsuchida said.
The deal with the TSE is the third overseas alliance in ETF trading for AMEX. The Singapore Exchange started trading AMEX-listed ETFs last month while the Euronext, a Brussels-based stock exchange, will start trading similar ETFs by the end of this year, AMEX Chairman and CEO Salvatore Sodano said.
The cross-accessing of markets in Brussels, Singapore, Tokyo and the U.S. promises the possibility of a 24-hour cross-listing platform for ETF trading in the future, Tsuchida and Sodano said.
Tsuchida said the partnership with AMEX will satisfy the needs of international investors and will help attract more Japanese investors to the stock exchange and revitalize the TSE.
According to AMEX, ETFs had $77.1 billion in assets as of May 31, up from $70.3 billion at the end of 2000.