TOKYO -- Nearly a third of companies on Japan's most prestigious stock market now fall short of the requirements for staying in the top tier after a planned reorganization.

Aiming to attract more foreign investment by bringing Japanese companies closer in line to global governance and market standards, the Tokyo Stock Exchange will split into prime, standard and growth sections next April.

The results of the first screening echo some of the criticism that prompted the biggest overhaul in the TSE's history: that the current big board, the first section, contains too many small, thinly traded companies.

Moving from the first section to prime will require companies to meet tougher liquidity and other standards. The TSE checked their eligibility as of the end of June, notifying them Friday of where they stood. Of 2,191 companies on the first section, 664 did not meet the criteria.

That is not the end of the story. Each company can appeal its evaluation and request another by providing additional information.

To move to prime, a company must meet such liquidity benchmarks as having at least a 10 billion yen ($90.7 million) floating-stock market capitalization -- which excludes cross-shareholdings strategically held by lenders and business partners -- and a daily trading average of 20 million yen. To ensure strong governance, at least 35% of a company's stock must be floating, or tradable.

Many of those that did not make the cut missed floating-stock benchmarks, according to the TSE. Ways to boost liquidity include unwinding cross-shareholding ties and selling off stock held by founders and other major shareholders.

Companies including online clothing store operator Zozo and auto parts maker Toyota Boshoku have gone the former route. Logistics company Hitachi Transport System and office supplies distributor Askul are among those planning to retire shares they hold in themselves, which also improves floating-stock ratios.

Because companies that disclose such efforts to meet the new criteria will be given initial entry, the prime market is expected to launch with more than the 1,527 companies that cleared the first screening.

Companies will choose which market to move to and file their requests between September and late December. The TSE will announce their selections Jan. 11 before the April 4 switchover.

The TSE now consists of the first and second sections, the Mothers startup market, and the tech-focused Jasdaq.