ProgressSocietyCHANGE

More efficient and lower cost services
As an organization responsible for the reform of securities clearing and settlement system in Japan, we arepursuing greater convenience in the securities market.

Stock certificates, with long history in Japan, are now facing
a major turning point. Since established in 1984, as Japan’s
only central securities depository, Japan Securities Depository
Center, Inc. (JASDEC*) has consistently endeavored topromote convenience and efficiency in the securities market.
The percentage of shares in custody at JASDEC accounts
currently represents approximately 80% of the entire domestic
stock market. In January 2009**, dematerialization of stock
certificates will be inaugurated, following such systems forcorporate bonds and investment trusts, thereby accomplishing our goal in the early stages of infrastructure reform ofsecurities clearing and settlement system of Japan. These
reforms are expected to bring significant positive impact on
the Japanese economy through increased efficiencies of thesecurities settlement and lowered costs related to issuanceand trading of securities. As a major infrastructure of securities
market, we continuously pursue benefits for stakeholders —that is what we take pride in at JASDEC.
(Notes)*JASDEC is Central Securities Depository according to the Law Concerning Central Securities
Depository and Bank-Entry Transfer.
**The enforcement date will be announced in Government Order.

Protection
Investor
CHANGEJASDEC realized secure transactions. Investors’ assets
are protected with our highly reliable services.

To address the growing needs of shareholders and investors for more convenient and safer transactions in stocks,
corporate bonds and investment trusts, since 1991, JASDEC
has been working for efficient and cost-effective custodial anddelivery services of securities. In 2004, JASDEC initiated DVP(delivery versus payment) settlement services for NETD toenhance safe settlement of securities transactions. In addition,
dematerialization of stock certificates will be implemented inJanuary 2009. This new system is committed to streamlining
all transactions, from trading to settlement without manual
processing, as well as eliminating the risks of lost or stolen
stock certificates and minimizing operational risks. Investors’
important assets will thus be well protected. This is our mission
at JASDEC.

BroadeningGlobalization
CHANGEIn response to increased cross-border trading in global
capital markets, JASDEC is committed to leveraging
capabilities for the global standardization in clearing
and settlement systems.

With the recent trend of increased cross-border trading, needs
for greater efficiency and enhanced convenience of securities
transactions have been growing. In the shifting environment of
the capital markets both in Japan and overseas, we constantly
recognize global needs for standardization of operational
practices. For external activities, JASDEC enhances communication and exchange of information with CSDs in othercountries to promote international standardization of settlement
system. Meanwhile, in Japan, JASDEC launched its depository
and book-entry transfer system for foreign stocks in May 2006.
Responding to the worldwide trend for dematerialization ofsecurities, we will work to strengthen the competitive positionof Japanese securities market. To build more attractive market
for both Japanese and foreign investors, we will “continue tobroaden” our perspective for global markets. This is our challenge at JASDEC.

Japan Securities Depository Center, Inc.
ANNUAL REPORT 2008

Highlights

7Message from the President

8 — 11Special Feature on Dematerialization

12 — 19

Corporate Governance

20 — 23

Business Overview
Custody and Book-Entry Transfer System for Stocks Certificates 24 — 27
Book-Entry Transfer System for Corporate Bonds
and Commercial Papers

28 — 33

Book-Entry Transfer System for Investment Trusts

34 — 37

DVP* Settlement Services for NETDs**

38 — 41

Pre-Settlement Matching System (PSMS)***

42 — 45

Custody Services for Foreign Stocks

46 — 49

International Relations

50 — 51

Analysis of Business Performance andFinancial Results

52 — 53

Financial Section
Consolidated Financial Statements and Notes
Report of Independent Auditors

54 — 6667

History

68 — 69Corporate Data

70 — 71*DVP: Delivery versus Payment. This system simultaneously attaches specific conditions to the deliveryof and payment for securities.
**NETDs: non-exchange transaction deliveries***Pre-Settlement Matching System (PSMS): This central matching system automatically confirms thecontents of trade and settlement, such as trade names/amounts, counterparties and account numbers.

6Japan Securities Depository Center, Inc. ANNUAL REPORT 2008