The Tokyo Stock Exchange plans to introduce tighter disclosure requirements for all listed companies next year, following revelations Seibu Railway Co. and other firms falsified their financial statements.

Every year, a top executive authorized to represent his or her company will be required to personally certify the accuracy of the financial statements it submits, sources said. The new rule will start with reports for the business year ending March 2005.

If a firm is found to have provided inaccurate information, the TSE will order it to submit a report identifying concrete measures on how it plans to improve disclosure standards.

If a company receives the improvement order three times in five years, it will automatically be delisted, the sources said.

Separately, the TSE will call on all listed companies in January to submit a written oath in which executives reaffirm their sincere compliance with disclosure requirements.

Each company has already promised to adhere to bourse regulations, including timely disclosure of corporate information, in a document submitted at the time of listing.

But the TSE decided to ask for a renewed commitment out of fear current executives may not be aware of specific mandates, years after their companies went public.

Through the planned measures, TSE officials hope to regain confidence in the stock market, which has been rocked by a string of scandals, including revelations Seibu and Nippon Television Network Corp. (NTV) had falsified their financial statements.

Requiring executives to vouch for the accuracy of financial statements is modeled after a similar stipulation in the Sarbanes-Oxley Act, a U.S. corporate reform law enacted after accounting scandals at Enron Corp. and other firms.

But the new rules, which are revisions to TSE regulations, are not as stringent as their U.S. counterparts, which can result in criminal action, including imprisonment.

NTV announced last week that it has corrected its financial statements for the past five business years because shares that had been reported as held by Tsuneo Watanabe, chairman of Yomiuri Shimbun Holdings, actually belong to the newspaper publisher.(IHT/Asahi: November 12,2004)