(Reference Translation)

TSE Index Guidebook(TOPIX)

January 31, 2024
JPX Market Innovation & Research, Inc.

Published: January 31, 2024
DISCLAIMER: This translation may be used for reference purposes only. This English version is not an
official translation of the original Japanese document. In cases where any differences occur between theEnglish version and the original Japanese version, the Japanese version shall prevail. This translation issubject to change without notice. JPX Market Innovation & Research, Inc., Japan Exchange Group, Inc.,Tokyo Stock Exchange, Inc., Osaka Exchange, Inc., Tokyo Commodity Exchange, Inc., Japan ExchangeRegulation and/or their affiliates shall individually or jointly accept no responsibility or liability for damage orloss caused by any error, inaccuracy, misunderstanding, or changes with regard to this translation.

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Contents
Record of Changes................................................................................................................. 3Introduction ............................................................................................................................. 4
I. Outline of Indices ................................................................................................................. 4
II. Index Calculation ................................................................................................................ 4
1. Outline ............................................................................................................................. 4
2. Index Type .................................................................................................................... 5
3. Inclusion or Removal of Constituents .......................................................................... 5
III. Other .................................................................................................................................. 9
1. Publication/Dissemination of Index Data ..................................................................... 9
2. Licensing ...................................................................................................................... 9
3. Contact ....................................................................................................................... 102Copyright © 2022- by JPX Market Innovation & Research, Inc. All rights reserved

Record of Changes
DATEChanges

2022/4/4

・Launch2024/1/31

・”Securities on Alert” was renamed to “Securities on Special Alert”.

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Introduction
・ JPX Market Innovation & Research, Inc. (hereinafter the “JPXI”) calculates and publishes
the Tokyo Stock Price Index (TOPIX) and Market Capitalization Weighted TOPIX (ExTOPIX) in accordance with the methods described in this document. If an event not
specified in this document occurs, or if JPXI determines that it is difficult to use themethods described in this document, JPXI may use an alternative method of index
calculation as it deems appropriate.
・ Copyright of this document is owned by JPXI and any copies, reprints and reproductionsof this document in whole or in part are prohibited without the prior approval of JPXI. This
document is prepared solely for the understanding of indices calculated and publishedby JPXI, and is not to be construed as a solicitation for trading any securities or related
financial instruments. Information expressed in this document is subject to change
without notice and in those cases JPXI undertakes no obligation to update any recipientsof this document. JPXI shall accept no liability or responsibility for any loss or damage
arising from errors, delays, or termination of the calculation or publication of TOPIX/ExTOPIX, changes to their calculation or publication method, the use of TOPIX/Ex-TOPIXor all or any part of this document or other similar events.
I. Outline of Indices・ TOPIX is a market benchmark with functionality as an investable index, covering anextensive proportion of the Japanese stock market. The scope of the index is domestic
common stocks, and securities such as subscription warrants, preferred stock, and equity
contribution securities are not included.
・ The base date for weighting calculations used in cap adjustments for TOPIX (hereinafterthe "weighting base date") is the last business day of every August.
・ The base date for TOPIX/Ex-TOPIX is January 4, 1968. The base value is 100.
II. Index Calculation
1. Outline
・ TOPIX/Ex-TOPIX are calculated using market capitalization weighting.
・ The calculation formula and method for adjustments of base market value, etc. are inaccordance with the Index Calculation Guidebook.
・ The free-float weight (FFW) used in TOPIX calculation applies a liquidity factor as set
in the Free Float Weight Calculation Methodology and a transition factor as described
below.
・ The FFW used in Ex-TOPIX is “1”.
4Copyright © 2022- by JPX Market Innovation & Research, Inc. All rights reserved・ The upper weighting limit for any one constituent of TOPIX is 10%.
・ If an issue's weight calculated by free-float adjusted market capitalization as of theweighting base date is over the upper limit, a cap-adjustment ratio for adjustment ofweight will be applied to said issue on the last business day of October. Even if theweight again exceeds the upper limit due to stock price movements or other reasons,the cap-adjustment ratio will not be changed until the last business day of the nextOctober.
2.

Index Type・ For TOPIX, a price return index, a total return index and a net total return index arecalculated.
・ For Ex-TOPIX, a price return index and a total return index are calculated.
・ The method of reflecting dividends in index values is in accordance with the Index

Calculation Guidebook.
3.

Inclusion or Removal of Constituents(1) Weighting adjustments by tradable share market capitalization criteria**These criteria are only applicable from April 4, 2022 to January 31, 2025.
i) Designation of "phased weighting reduction constituents"
・ Of the TOPIX/Ex-TOPIX constituents as of April 1, 2022, those that fall under boththe following (a) and (b) will be designated as "phased weighting reduction
constituents":(a) First decision: The constituent's tradable share market capitalization is lessthan JPY 10 billion as of the "Notice on Whether the Listed Company is Meeting
the Continued Listing Criteria for New Market Segments", which has a basedate of June 30, 2021, and(b) Second decision: The constituent's tradable share market capitalization is lessthan JPY 10 billion at the end of the reporting period following the reporting
period used in decision (a).
・ Any constituent applying for listing on the 1st Section through an initial listing(excluding technical listings) or section transfer after the "first set of revisions
pertaining to cash equity market restructuring" were implemented on November
1, 2020 will not be subject to designation as a phased weighting reduction
constituent based on tradable share market capitalization.
ii) Adjustment to the weighting of phased weighting reduction constituents5
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・ The weighting of phased weighting reduction constituents will be reduced in ten(10) stages on the last business day of every quarter starting on the last business
day of October 2022 (October 31, 2022), and these constituents will be removed
from the index on the last business day of January 2025.
・ Said adjustments to the weighting of phased weighting reduction constituents will
be calculated by multiplying the FFW by the transition factor (which will decrease
from 1.0 toward zero (0) in increments of 0.1).
・ In order to check whether there have been changes to the tradable share market
capitalization of each phased weighting reduction constituent, a re-evaluation will
be conducted, using tradable share market capitalization as of the end of thereporting period following the reporting period used for the second decision in i)(b). If the tradable share market capitalization of a constituent has reached JPY
10 billion or more but the annual traded value ratio of said constituent has notreached 0.2 at this point, the transition factor will no longer decrease as of thefifth stage (it will stay at 0.6, the same as the fourth stage). If the tradable sharemarket capitalization and the annual traded value ratio of a constituent havereached JPY 10 billion or more and 0.2 or more respectively at this point, thetransition factor shall be increased to one (1) in increments of 0.1 from the fifth
stage and said constituent will be removed from the list of phased weighting
reduction constituents.
Transition schedule
Transition stage

Index revision date

Transition factor

1st

Last business day of Oct. 2022

×0.9

2nd

Last business day of Jan. 2023

×0.8

3rd

Last business day of Apr. 2023

×0.7

4th

Last business day of Jul. 2023

×0.6

Re-evaluation
5th

Last business day of Oct. 2023

×0.5

6th

Last business day of Jan. 2024

×0.4

7th

Last business day of Apr. 2024

×0.3

8th

Last business day of Jul. 2024

×0.2

9th

Last business day of Oct. 2024

×0.1

10th (removed from

Last business day of Jan. 2025

×0index)

6Copyright © 2022- by JPX Market Innovation & Research, Inc. All rights reservediii) Weighting adjustments for Ex-TOPIX・ For Ex-TOPIX, there will be no phased weighting reductions and phased
weighting reduction constituents will removed on the last business day of January2025.
(2) Non-periodic removal
・ Constituents which are delisted (excluding cases where the stock lists on another Tokyo
Stock Exchange (hereinafter the “TSE“) market immediately), designated as Securities
to be Delisted, or designated as Securities on Special Alert shall be removed.
・ If a constituent is designated as a Security on Alert (On January 15, 2024, the name wasrenamed to "Securities on Special Alert”.) as of the day of transition to the new market
structure (April 4, 2022), said constituent will be removed from TOPIX/Ex-TOPIX on thelast business day of April 2022.
(3) Non-periodic inclusion
・ Stocks which carry out initial listings (excluding technical listings) on or transfer to thePrime Market will be included in TOPIX/Ex-TOPIX on the last business day of the monthfollowing the month containing the listing date or transfer date.
・ In the event a constituent of TOPIX/Ex-TOPIX is delisted due to a stock transfer, stockswap, merger for creating a new company or demerger, and the newly created, surviving,or succeeding company is listed without delay, JPXI will add the new company to theindex.
・ In the event a constituent of TOPIX/Ex-TOPIX is delisted due to a stock swap or
absorption-type merger, in which the surviving company or the parent company holding
all shares of the constituent company is not a constituent of TOPIX/Ex-TOPIX, then JPXI
will add the surviving company or the parent company to the index.
・ For issues that are removed from the index due to designation as Securities on Alert,
but have had said designation canceled as of the last business day of August 2023, if
the company meets the same criteria as for the re-evaluation in 3. (1) ii), i.e. tradableshare market capitalization of JPY 10 billion or more and annual traded value ratio of 0.2
or more, said company shall be added to TOPIX/Ex-TOPIX on the last business day ofOctober 2023.
(4) Data used for calculation
・ The free-float market capitalization used in the calculation of cap-adjustment ratio is themarket capitalization for each index as of the weighting base date.
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・ For (1) i) (b), the tradable share market capitalization figure used is calculated using themethod specified in the "second set of revisions pertaining to cash equity marketrestructuring" based on information submitted by listed companies by the last business
day of August 2022.
・ For the re-evaluation in (1) ii), the tradable share market capitalization figure used iscalculated using the method specified in the "second set of revisions pertaining to cash
equity market restructuring" based on information submitted by listed companies by thelast business day of August 2023.
・ The traded value ratio used for the re-evaluation in (1) ii) is calculated using the sum ofmonthly traded value ratios from September 2022 to August 2023. The monthly tradedvalue ratio shall be calculated as follows: (Median of daily traded value in trading
sessions at TSE × number of business days in the month) ÷ free-float adjusted market
capitalization as of the last business day of the month before the transition factor wasapplied.
(5) Dates of constituent inclusion and removal
Event Requiring Adjustment
New listing on Prime Market

Adjustment Date
Last business day of themonth following listing

Inclusion

New listing of a newly formed company resulting

New listing date (*2)

from a corporate consolidation, etc. (*1) thatresults in a TOPIX/Ex-TOPIX constituent beingdelisted and the new company being included inTOPIX/Ex-TOPIX.
Delisting of a TOPIX/Ex-TOPIX constituent due toDelisting datea stock swap or an absorption-type merger with asurviving stock that is not a TOPIX/Ex-TOPIX
constituent, and the surviving stock is included inTOPIX/Ex-TOPIX
Transfer to Prime Market

Last business day of themonth following change.

DelistingRemovalNew listing of a newly formed company

Listing date of the newly

resulting from a corporate consolidation,formed company (normallyetc. (*1) that results in a TOPIX/Ex-TOPIX

two

constituent being delisted and the newfollowing delisting date)businessdays

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Event Requiring Adjustment

Adjustment Datecompany being included in TOPIX/ExTOPIX
Delisting other than those stated above (e.g.
mergers/stockswaps

between

TOPIX/Ex-TOPIX

constituentssurvivingremaining

company

Delisting date

twowithasaTOPIX/Ex-TOPIX constituent, etc.)
Designation as Securities to be Delisted orFour business days after

designation as a Security on Special Alertdesignation (*3)

*1:

Stock transfer, stock swap, merger for creating a new company, or demerger.

*2:

Next business day when the new listing date falls on a holiday.

*3:

Next business day when the designation date falls on a holiday.

III. Other
1. Publication/Dissemination of Index Data
1) Index Values
・ Tokyo Stock Price Index（TOPIX）/Ex-TOPIX values are disseminated in real-timethrough the Market Information System to securities companies, news media, andother institutions all over the country. The TOPIX price index is disseminated every
second, and Ex-TOPIX is disseminated every 15 seconds.
・ The Total Return Index of TOPIX/Ex-TOPIX, and the Net Total Return Index of TOPIX
are calculated daily at market close.
2) Index Data
・ Index data relating to TOPIX/Ex-TOPIX (base market value, number of shares for eachconstituent, etc.) is provided for a fee through the Tokyo Market Information service.
2. Licensing
・ JPXI and/or its affiliates reserve all calculation, publication and other rights pertaining
to TOPIX/Ex-TOPIX. As such, commercial use of such indices in the composition and/orsale of financial products such as funds or linked bonds (including using the index as
the basis for options, swaps, warrants, or other OTC derivatives) or provision of index
data requires a license from JPXI.

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3. Contact
JPX Market Innovation & Research, Inc. Index Business Department
Email: index@jpx.co.jp

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