(This article appears courtesy of International Financial Law Review, sign up for a free trial here) The implementation of the Prospectus Directive (PD) in July 2005 and the finalization of the Transparency Directive (TD) in December 2004 were events of some consequence for Japanese companies wishing to list on the London Stock Exchange. They faced new disclosure requirements, some of which were very different from those in their domestic market.
In July 2006, All Nippon Airways (ANA) became the first Japanese company to list new shares on an EU-regulated market under the regime. In August 2006, Nihon Dempa Kogyo (NDK) listed ¥10,000,000,000 ($86 million) of convertible bonds on the main market of the London Stock Exchange, the first to do so since July 2005. It is a good time to reflect on the impact of the Directive and the challenges it presents for Japanese issuers.
Trends since July 2005 The initial impact of the PD and TD has been far from positive.
On the debt and equity-linked side, it used to be that London was the listing venue of choice. But there had been an increase in the number of Japanese issuers seeking listings outside of the EU since 2003, even before the TD had been finalized, and the pattern has continued since then.