TSE to Take Applications for Initial Listings of Actively Managed ETFs from June 30

Tokyo Stock Exchange (TSE) today (June 29) has published the details of its new listing rules for actively managed exchange traded funds (ETFs).

Under the new rules, products whose creation was difficult under the conventional indicator-tracking ETF framework can now also be flexibly created and listed in line with investor demand. So that investors can invest with confidence, the new rules are designed to ensure that listed funds have three characteristics: marketability, through being easy for investors to understand; transparency, through disclosure of each fund's holdings and other information; and soundness – such as for the management company's operations.

The exchange will take applications for initial listings of actively managed ETFs from June 30, 2023, which is the effective date of the listing rules. 

TSE stated in the latest announcement: "TSE is committed to working with the management companies that see opportunities in these products to cultivate them into a product line which will be used long-term by many investors, and therefore we sincerely hope that many management companies, both in Japan and overseas, will enter the market. We anticipate the listing of products that can contribute to fund management and asset building for all levels and types of investor, including those that can be used under the new NISAs from next year."

It added: "In addition to the listing rules, TSE has also today published the details of a market making scheme for actively managed ETFs, but we will also continue to listen to feedback from market players to find additional ways to improve the ecosystem. We would like to ask securities companies and market makers to positively consider handling actively managed ETFs to help us provide a high level of liquidity, and for management companies, we ask that you renew your awareness of the importance of liquidity in the ETF market and actively communicate with securities companies and market makers."