Share repurchases on the Tokyo Stock Exchange Trading Network

Koji Ota and David Lau

Journal of the Japanese and International Economies, 2021, vol. 61, issue C

Abstract: Tokyo Stock Exchange Trading Network (ToSTNeT) is a unique market in Japan in which firms can repurchase their shares during off-auction hours at a fixed price within a very short timeframe. In this study, we uncover a drawback in ToSTNeT which appears to have been exploited by managers of the repurchasing firms to favour certain sellers who have close economic ties with the firms. Further investigations reveal that it is impractical for retail investors to sell their shares on ToSTNeT. Our study proposes recommendations of regulatory and policy changes for the Tokyo Stock Exchange that may help tighten the loophole in ToSTNeT and safeguard the integrity of share repurchases in Japan.

Keywords: Share repurchases; ToSTNeT; Japan (search for similar items in EconPapers)
JEL-codes: G14 G35 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:61:y:2021:i:c:s0889158321000277

DOI: 10.1016/j.jjie.2021.101148

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