TOKYO, Nov 19: Japan’s two major bourses have agreed to merge in about January 2013, creating the world’s second-largest stock exchange, reports said on Saturday.

The presidents of the Tokyo Stock Exchange (TSE) and Osaka Securities Exchange (OSE) reached a basic agreement on Friday on the merger, the Nikkei business daily reported, citing unnamed sources.

The two will integrate their operations within a few years after the merger by reorganising into four units specialising in cash stocks, derivatives, settlement and self-regulation, the Nikkei and Yomiuri newspapers reported.

The exchanges both declined to confirm the reports, but the Nikkei and Yomiuri said the companies would both hold board meetings on Tuesday.

The Tokyo Stock Exchange is the biggest stock exchange in Japan, while the Osaka exchange serves as the nation’s largest market for derivatives trading.

They have agreed to value the Tokyo exchange at about 1.7 times the value of the Osaka bourse, the reports said.

The merger will create the world’s largest stock exchange after NYSE Euronext, they added.

Companies listed on TSE and OSE had a total market capitalisation of around $3.7 trillion as of the end of September, the newspapers said.

The merger is aimed at boosting Japan’s competitiveness, as regional bourses, such as Singapore, have successfully lured international firms for listings.—AFP