The Tokyo Stock Exchange Inc. and the Korea Exchange Inc., signed a memorandum of understanding on a so-called “ Market Alliance Project” , which will see them collaborate to facilitate more cross-border capital flows.

The purpose of the MOU is to set forth a framework in which the two exchanges will cooperate with each other, “ in developing and fostering a favourable environment for the facilitation of cross-border capital flow between Japan and Korea” . Those activities may include supporting promotional activities for both TSE and KRX markets, investor relations activities of companies from both countries, and feasibility studies on co-trading arrangements between TSE and KRX.

The two exchanges signed a ‘Memorandum of Intent’ regarding a possible market linkage in August 2005, the MOU, “ is initiated for both exchanges to collaborate more specifically on the market alliance” .

“ By implementing cooperative activities in a more specific manner, the two exchanges look forward to building a closer partnership with each other and advancing the cross-border capital movement in the Asian region,” they say.

TSE president & CEO, Taizo Nishimuro, commented, “ This collaboration with KRX, one of the major exchanges in Asia, provides an excellent opportunity to enhance further cross-border capital flow in our region. I strongly hope that this initiative will lead to a strategic alliance among the stock exchanges in North-Eastern Asia, which would provide investors and other market participants with greater value and more diverse services.”

“ I expect that it will lead our two exchanges to provide customer-oriented value with tangible benefits. Moreover, I hope that this initiative between the two exchanges will further develop to jointly cope with the drastic changes of business environments such as strategic partnership and M&A’s among exchanges around the world,” added Young-Tak Lee, KRX chairman & CEO.