Business Overview

Custody Services for
Foreign Stock Certificates, etc.
¥203 million
Pre-settlement Matching System (PSMS)¥1,547 million
DVP Settlement System for NETDs¥644 million

Book-entry Transfer System
for Stocks, etc.
¥14,576 million

Revenues by
Operation
Year ended March 31, 201211

Annual Report 2012

Book-entry Transfer System for
Investment Trusts¥1,064 million

Book-entry Transfer System for
Corporate Bonds¥1,201 million

Book-entry Transfer forCommercial Paper¥463 million

01

02

03

04

05

06

Book-Entry
Transfer System
for Stocks, etc.

Book-Entry
Transfer System
for Commercial
Paper andCorporate Bonds

Book-Entry
Transfer System
for Investment
TrustsDVP Settlement
System for
NETDs

Pre-Settlement
Matching System(PSMS)

Custody Services
for Foreign Stock
Certificates, etc.

P12

P16

P22

P26

P30

P34

Business
Overview

01
Book-Entry
Transfer System for
Stocks, etc.
12

Annual Report 2012

Ongoing enhancements to this recently
introduced all-electronic record system arebringing greater convenience, speed, andflexibility to stock ownership transfers.

株式等
振替業務

01 Book-Entry Transfer System for Stocks, etc.

The Book-entry Transfer System for Stocks, etc. is operating to plan
The Book-entry Transfer System for Stocks, etc. began

institutions established by cooperative associations, Exchange

operations in January 2009. Stock certificates issued by all

Traded Funds (ETFs), Japanese Depositary Receipts (JDRs,

Japanese companies listed on Japanese stock exchangesetc.) and other negotiable securities.

were abolished and became invalid. They were replaced by

As of March 2012, the total number of issues handledelectronic records registered and managed by computerwas 3,762, including 3,581 share issues, 27 bonds withsystems within accounts opened at JASDEC or accountshare options, 6 share options, 36 investment units, one

management institutions (AMIs) such as securities companies

preferred share issue, 97 ETFs, and 14 JDRs, etc. The number

and banks. Instead of stock certificates, records in computerof companies participating in the new system, including

systems represent share ownership. Transfer of shareholders’

JASDEC participants, indirect AMIs, and fund settlement

rights is also processed electronically based on the records incorporations, was 411. Under the system, foreign financial

the accounts. This dematerialization system applies not only

institutions designated by competent ministers can also taketo stock certificates, but also to bonds with share options,part in the system. As of March 2012, 53 foreign financial

share options, investment units of Real Estate Investment

institutions were participating as indirect AMIs.

Trusts (REIT), preferred equity investment of financial

JASDEC participants and indirect AMIs (as of March 31, 2012)

The Book-Entry Transfer System for Stocks, etc.

13

JASDEC Participants by Category

Shareholder registry
General Shareholders
Notification

Stock exchanges, etc.
10 (5%)JASDEC
Transfer
Account
Book

Book-entry
transfer

Direct AccountManagement Institution(securities companies, banks, etc.)

Indirect AMIs by Category

Transfer
Account
Book

Life & non-life
insurancecompanies
2 (1%)

Total

213

companies

Total

96

companies

Securities financecompanies
3 (1%)

Direct AccountManagement Institution(securities companies, banks, etc.)

Banks, etc.
16 (17%)Banks, etc.
23 (11%)

Securities companies, etc.
175 (82%)

Foreign indirect
AMIs
53 (55%)

Securities companies, etc.
27 (28%)Indirect AccountManagement Institution(securities companies, banks, etc.)

Participants(shareholders)Participants(shareholders)Note:	“Banks, etc.” include The Norinchukin Bank, Tokyo Shoken Shinyou Kumiai, and Japanese Banks’ Payment
Clearing Network.
	“Stock exchanges, etc.” include Japan Securities Dealers Association, Japan Securities Clearing Corporation,
JASDEC DVP Clearing Corporation, two securities agents and three Tanshi companies (which offer short-term credit
brokerage services)

Participants(shareholders)

Stock account balance and number of issues
Balance in custody (end of FY or month)
3,727(Billion shares)

3,948

420

3,839

Number of issues (end of FY or month)

3,640

3,581

3,630

3,622

3,621

3,615

3,605

3,601

3,598

3,600

3,593

3,591

3,581
(Issues)

413.3

412.9

411.7

411.8

411.6

412.3

406.8

4,000
405.7

403.7

403.6

405.5

405.4

405.6

406.8

394.8

400

0

3,603

418.6

3,500

320.0

(FY)

2007

2008

2009

2010

2011

2011.4*Figures include the Depository and Book-entry Transfer System for Stock Certificates.

5

6

7

8

9

10

11

12

2012.12

30

Annual Report 2012

Issuing company

Ongoing enhancements to increase user convenience
Since its introduction in January 2009, the dematerialized

began to handle foreign-issued exchange traded notes (ETNs)

Book-entry Transfer System for Stocks, etc. has been

under the Japanese Depositary Receipt (JDR) framework.

operating smoothly, with no major problems. JASDEC

In March 2012, the Book-entry Transfer System for Stocks,

has organized three subcommittees to examine further

etc. was further enhanced to allow the merger or splitting of

improvement of the new system: the Subcommittee forbeneficial rights for ETFs.

Stocks, the Subcommittee for Bonds with Share Options,

In addition, we are enhancing our system to support

and the Subcommittee for ETFs. These committees haveschemes based on commitment-type rights offerings inpromoted a number of initiatives.

relation to share options through the Book-entry Transfer

In fiscal 2011 (to March 31, 2012), we enhanced the

System for Stocks, etc.

usability of the system by improving temporary suspension

We will continue our efforts to communicate effectivelyfunctions in relation to requests for transfer. As in fiscal

with relevant parties, aiming to ensure stable operation

2010, we further reduced the number of days required towhile meeting the needs of the market for convenience andsend individual shareholder notifications. In August 2011, weuser-friendliness.

14
Bond with Share Option account balance and number of issues
Annual Report 2012

Balance in custody (end of FY or month)(Billion yen)

96

1,600

70

43

50

Number of issues (end of FY or month)

27

37

37

37

36

35

35

30

28

28

27

27

27

1,154.5 1,211.5 1,168.1

1,300

1,177.4 1,176.8 1,174.7 1,170.9 1,184.7
959.7

1,066.7 1,061.1 1,060.5 1,056.8
1,017.3 1,014.9

100
959.7

1,000
0

(Issues)150

1,408.1

50
(FY)

2007

2008

2009

2010

2011

2011.4

5

6

7

8

9

10

11

12

105

105

108

109

2,288

2,363

2,334

2012.1

2

3

111

111

0

*Figures include the Depository and Book-entry Transfer System for Stock Certificates.

Exchange Traded Fund (ETF) etc. account balance and number of issues
Account unit balance (end of FY or month)(Million accounts)

2,563
93

4,000
3,000

2,306

1,873

2,009

Number of issues (end of FY or month)

111

2,339

93

95

95

95

97

2,397

2,418

2,368

2,179

2,337

110

2,379

2,355

2,331

2,339

2,000

90
60

1,000
0

(Issues)
120

38
(FY)

2007

66
2008

30

77
2009

2010

2011

2011.4*Figures include the Depository and Book-entry Transfer System for Stock Certificates.
*Figures include Japanese Depositary Receipts from July 2010.

5

6

7

8

9

10

11

12

2012.12

30

01 Book-Entry Transfer System for Stocks, etc.

Book-entry transfers
Stock-exchange transfers
607.7

Transfers between JASDEC participants

175.7(Billion shares)

670.1

677.4
695.1

718.0

600

180

300

369.0

345.1

321.0

2007

2008

2009

2010

44.0

59.9

59.7

58.2

45.5

47.4

40.8

57.4

75.5
76.2

28.0

0

2011

(FY)

24.1

27.2

5

6

2011.4

64.5

60.4

55.2

60

84.4
(FY)

50.9

67.3

120

308.5

378.0

48.3

(Billion shares)

119.8

900

0

64.2

652.5

669.4

1,400

Internal transfers within the same companies

60.8

58.0

56.7

49.6

41.5

39.6
31.2

25.9
7

25.7
8

23.4

9

23.6

22.9

10

11

12

38.9
34.4

31.7

22.4
2012.1

2

3*Figures include the Depository and Book-entry Transfer System for Stock Certificates.

General shareholders notifications
General shareholders notifications(Billion shares)

127,240

129,619

1,000

1,001.1

972.8

9,260

8,888

946.3

400
300

127,292(Notifications, in thousands)
46,339

8,723

385.5

1,067
739

2,735

976

175

881

1,212

45,722164

370.6

11,602

121

4,094

100

2,719

3,001

551

20.8

4.0

2008

3.6
2009

2010

2011

2011.4

83.0
5

6

283

17.4

5.2
7

8

9

1,129
11,587

2,972

862

12

2012.1

2

12,000

294

10.6

4.8
11

50,000

80.8

2.7
10

130,000

159

3*Figures are as of day of notification to issuers.
*FY2008 represents figures between January and March 2009.

Individual shareholder notifications

Information requests

Number of notices
Number of issues
72(Notifications)

448

401

412

2,656

3,000

1,958

(Issues)(Partial record) number of issues

27
16

314
302
87 1,857 77

212
79

2,000

1,589

1,500

400

2,000

(Total record) number of issues(Notifications)

600

2,428

(Total record) notifications(Partial record) notifications

359

0 (FY) 2008

2009

2010

2011

477

356

200

500

0

131

375

200
100

45

0 (FY) 2008

400
300

1,155

1,000
1,000

(Issues)

2009

2010

2011

0

*FY2008 represents figures between January and March 2009.

* Requests for information (total record)refer to requests for data recorded on
book-entry transfer registries of either
JASDEC participants (direct AMIs) orindirect AMIs where shareholders inquestion have opened accounts.
Requests for information (partial
record) refer to requests for data
recorded solely on book-entry
registries of JASDEC participants
where shareholders in question haveopened accounts.
*FY2008 represents figures between
January and March 2009.

Number of shareholders (Data for shareholders notifications)(Thousand notifications)
17,00016,287

16,45916,727

16,486

16,513

16,543

16,566

16,600

16,633

16,654

16,678

16,671

16,682

16,69816,7272011.4

5

6

7

8

9

10

11

12

2012.12

3

16,00014,93515,000
0

(FY)

2008

2009

2010

2011

*Number of shareholders (data for shareholders notifications) is comprised of participant information notified by AMIs.
*Figures are as of end of fiscal year or month.

5,000

15

2,500
0

Annual Report 2012

(FY)

192

940 138

3.8

50
0Total shareholders

Number of issues

Business
Overview

02

16

Book-Entry
Transfer System forCommercial Paper andCorporate Bonds

Annual Report 2012

JASDEC is maintaining the security of a CP
and corporate bond electronic book-entry
transfer system whose daily settlement value
typically surpasses the trading value per day at
the Tokyo Stock Exchange.

短期社債振替業務
一般債振替業務02 Book-Entry Transfer System for Commercial Paper and Corporate Bonds

Supporting seamless and secure CP and corporate bond settlement
In March 2003 JASDEC launched the Book-entry Transfer

Processing (STP), which fully automates the entire process,

System for Short-Term Corporate Bonds (dematerialized

including trade matching and fund/securities settlement.

CP), the first completely dematerialized financial instrument

As a means of managing participation in JASDEC’s book-in Japan, and in January 2006 this was extended to include

entry transfer system, we set up a multilayer holding structure

corporate bonds. In each system, custody procedures—for account management institutions (AMIs) to addressissuance, transfer (trading), and redemption—are conducted

the diverse needs of participating investors and financial

based on the balance electronically recorded in the transfer

institutions. Direct AMIs can open an account directly at

account books. In addition, all transactions related to

JASDEC, and indirect participation is possible by opening

issuance, transfer and redemption of CP and corporate bonds

an account at a direct AMI. Another option for indirect

can be processed by the DVP settlement link with the Bank

participation is through the opening of an account at anof Japan’s Financial Network System. By linking the book-indirect AMI. Principal and interest payments to bondholders

entry transfer system with its PSMS (Pre-Settlement Matching

are made by paying agents via AMIs, in accordance with the

System; see page 30), JASDEC has realized Straight-Throughmultilayered structure.

17
Flowchart for Book-Entry Transfer for CP/Corporate Bonds (in the case of DVP)

Seller
② Trade matching③ Notice of settlement
matching status

Settlement
parties

Buyer

JASDEC④ Notice of settlement status(Awaiting fund settlement)

Affirmation

Settlement matching
Pre-Settlement
Matching System

Securities transfers② Trade matching③ Notice of settlement
matching status④ Notice of settlement status(Awaiting fund settlement)

Settlement
partiesBook-entry Transfer
System for
CP/Corporate Bonds⑨ Notice of transfer
completion⑨ Notice of transfer
completion⑧ Notice of receipt completion

Fund
settlement
corporation⑤ Payment instruction⑥ Payment request⑧ Notice of receipt completion

Bank of Japan⑦ Payment instruction

Fund
settlement
corporation

Annual Report 2012

① TradeEnsuring continued CP transaction efficiency
Commercial paper (CP) currently refers to short-term

system nine years ago, almost all CP issued in Japan has been

corporate bonds in a dematerialized form issued by corporate

handled by this system.

entities as a means of procuring short-term funds. As CP was

During fiscal 2011 (to March 31, 2012), our accountpreviously drawn as a promissory note in physical form, therebalance rose to around the ¥16 trillion level, mainly due

was always some risk involved when notes were transferred or

to increased issuance by corporate entities. However, as ofdeposited, and transfers were also subject to a documentary

March 31, 2012, the total account balance had significantly

stamp tax. Accordingly, demand developed for an electronic

declined to ¥13,614 billion (a year-on-year decline of ¥418

book-entry system that would eliminate such risks. The

billion) because of a combination of special factors during theresult was the creation of our first fully electronic book-entry

month of March. Number of issues handled stood at 4,447

transfer system for dematerialized CP. Since the launch of theissues (a year-on-year increase of 55 issues).

Participants in Book-Entry Transfer System for CP (as of the end of March 2012)18
Issuers 497
Annual Report 2012

Issuing/
paying agents

21

JASDECJASDEC
Participants(Direct AMIs)

69
Fund settlement corporations 146

Indirect
AMIs

39

CP holders

02 Book-Entry Transfer System for Commercial Paper and Corporate Bonds

CP account balance (nominal value) and number of issues
Account balance (end of FY or month)

Number of issues (end of FY or month)(Issues)(Trillion yen)
30

5,759

7,000

5,869
4,730

20.2

18.7

20

14.1

4,392

4,447

14.0

13.6

4,510

4,340

4,499

4,581

14.8

15.1

15.4

16.1

4,386
16.0

4,324

4,451

14.4

15.0

4,544

4,873
16.5

16.0

4,589

4,491

16.7

16.0

6,000
4,447

5,000
4,000

13.6

3,000
10

2,000
1,000

0

(FY)

2007

2008

2009

2010

2011

2011.4

5

6

7

8

9

10

11

12

2012.12

30Nominal value is the value at time of issuance (based on the amounts for each bond)

19
Issuance, transfer and redemption of CP (daily average)
Issuance(Trillion yen)
6.0

0.7

0.6
0.4

4.1

4.3

4.0

0.4
4.0

0.4
3.8

4.2

0.5

0.4
4.0

0.4
4.1

4.2

0.4
4.0

0.4
4.1

0.5

0.4
3.8

4.0

0.4
4.1

0.4
4.0

0.5
3.9

0.5
3.9

0.4
3.8

2.0
0.7
0

(FY)

2007

0.6
2008

0.4
2009

0.5

0.4
2010

2011

0.5
2011.4

0.5
5

0.5
6

0.5
7

0.5

0.4

0.4
8

9

10

0.5
11

0.5
12

0.5
2012.1

0.4

0.4
2

3

Continually adapting to CP market needs
The settlement amount of issuance, transfer, and redemption

This huge settlement amount reflects the importance of CP,

of CP handled by JASDEC’s book-entry transfer system

which plays a crucial role in fund procurement by businessaverages ¥5 trillion per day, and in combination with month-

entities in Japan. As a provider of infrastructure for theend settlements of more than ¥10 trillion this means that

settlement of securities transactions, JASDEC fully recognizes

JASDEC settlements surpass the trading value per day at theits responsibility to secure a high level of reliability in theTokyo Stock Exchange. In fiscal 2011, the annual aggregate

book-entry transfer system. As the market for CP transactions

settlement amount was close to ¥1,000 trillion. Trading has

evolves, we will continue to make every effort to ensure thatbeen active since the start of the system.

our system remains responsive, reliable and up-to-date.

Annual Report 2012

Redemptions

Transfers

Security and reliability
JASDEC’s Book-entry Transfer System for Corporate Bonds

book-entry transfer foreign bonds) are subject to U.S.

handles various types of bonds, both through public offerings

withholding tax when newly issued as foreign-targeted bearer

and private placements. These include corporate bonds,

bonds under the TEFRA rules1. JASDEC has been negotiating

municipal bonds, bonds issued by investment firms, specified

with the U.S. Internal Revenue Service (IRS) since 2010bonds issued by special purpose companies (SPCs), bonds

concerning this matter. In March 2012, the IRS issued a noticeof special corporations such as quasi-government and local

stating that U.S. book-entry transfer foreign bonds issued ingovernment bodies, and Samurai bonds (yen-denominatedaccordance with the Foreign-Targeted Registered Obligation

bonds issued in the Japanese bond market by non-Japanese(FTRO2) rules would be exempted from U.S. withholding tax

entities or foreign governments) and others.

until the end of 2013.

In fiscal 2011, there was a dramatic year-on-year decline
1. The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) (1) prohibits
sales to American citizens for a specific period after issuance, (2) prohibitsinterest payments within the United States and (3) requires tax restrictions
for American holders to be stated on the bond certificates.

in bond issuance, especially by electric power companies, asa result of the Great East Japan Earthquake. New issues werealso affected by the European debt crisis triggered by eventsin Greece. As of the end of March 2012, the number of bonds

2. The Foreign-Targeted Registered Obligations (FTRO) rules simplify
formalities for withholding agent subject to certain conditions, such as
certification by account management institutions either that there are no
American holders of the securities, or that notification will be provided in theevent that the securities are held by Americans.

eligible in the system was 60,701 issues (a year-on-year declineof 7,087 issues), and the issue balance stood at ¥252,439
20billion (a year-on-year increase of ¥2,365 billion).

Annual Report 2012

(FATCA), since March 19, 2012, Samurai bonds (U.S.

Under the U.S. Foreign Account Tax Compliance Act

Participants in Book-Entry Transfer System for Corporate Bonds (as of the end of March 2012)
Issuers 2,564*
Issuing/
paying agents

JASDEC
Participants(Direct AMIs)

JASDEC206

Indirect
AMIs

Bond holders

434

89

*Issuers do not include unlisted companies, etc. that issued private offering bonds only.

Fund settlement corporations 146

Outstanding balance of corporate bonds and number of issues
Outstanding balance (end of FY or month)(Trillion yen)

72,817300

73,298

Number of issues (end of FY or month)(Issues)

71,202

67,78860,701

67,461

66,757

66,16265,71665,31564,74364,51964,102

63,401

63,14961,79960,70180,00060,000

200

241.0

240.2

245.5

250.0

252.4

249.9

250.6

250.5

251.4

251.5

251.8

252.5

253.4

252.3

252.9

253.8

252.4
40,000100

020,000
(FY)

2007

2008

2009

2010

2011

2011.4

5

6

7

8

9

10

11

12

2012.12

30

02 Book-Entry Transfer System for Commercial Paper and Corporate Bonds

JASDEC now able to process sukuk transactions
Taxation measures relating to Islamic finance were included

system-related changes needed to create an environment inin a major tax reform package introduced in fiscal 2011

which J-Sukuk can be issued, traded and redeemed in thewith the aim of attracting money and issuers from Islamicsame way as corporate bonds. Since April 1, 2012, we havecountries into Japan’s financial and capital markets. Systems

been able to handle J-Sukuk transactions. As a result, it isbased on these measures have since been developed andnow possible for Japanese and foreign entities to raise funds

established to provide wide-ranging investment and financing

by issuing J-Sukuk in Japan. As with interest on corporate

opportunities. In response, the relevant laws have been

bonds, J-Sukuk dividends are exempted from taxation underamended to create a legal framework for the issuance ofthe tax exemption system for non-residents. JASDEC is now

sukuk in Japan (J-Sukuk) that comply with Islamic doctrine

anticipating handling the first J-Sukuk issues in cooperationand laws.

with all concerned, and is enhancing the convenience of theSince then, JASDEC has identified the administrative andsystem to attract wide use by foreign investors.

Conceptual Diagram of Issuance of J-Sukuk

21(3) J-Sukuk
Annual Report 2012

Entity seeking to raise funds (originator)(4) Payment(investment)(1) Entrustmentof assets(5) Leaseback(8) Buyback

Tax
exemption
Islamic investors(2) J-Sukuk(6) Leasepayments(9) Payment ofconsideration(7) Dividends
Special purpose trust (trustee)(10) Redemptionof principal

Business
Overview

03
Book-Entry
Transfer System for
Investment Trusts
22

Annual Report 2012

JASDEC is streamlining the process fortrustors, trustees and beneficiaries, ensuring
security and convenience for a system thatserves virtually all investment trusts in Japan.

投資信託
振替業務

03 Book-Entry Transfer System for Investment Trusts

A faster, safer approach to investment trust administration
The Book-entry Transfer System for Investment Trusts is

In the Book-entry Transfer System for Investment Trusts,

a computer system for managing beneficial rights of

the account management institutions (AMIs) and JASDEC

investment trusts.

participants are diverse, consisting of not only securities

The system covers investment trusts managed by trustors

companies but also entities such as banks, insurance(hereinafter, simply called “investment trusts”). These

companies, Shinkin banks, credit cooperatives, agriculturalinvestment trusts are contract-type investment trusts withcooperatives, and investment trust management companies

the involvement of three parties—a trustor, a trustee andengaged in direct marketing. The total number of AMIs anda beneficiary who is an investor in the investment trust.

JASDEC participants was 881 companies as of March 31, 2012.

(Exchange traded funds (ETFs) and investment trusts of

The Book-entry Transfer System for Investment Trusts

the non-trustor instruction type are outside the scope of theenables direct or indirect connection between trustors,

system.) Since the system was launched on January 4, 2007,

trustees, account management institutions, and JASDEC. This

all trustors and trustees involved in investment trusts haveensures greater security, accuracy, and speed of processing

participated in the system, and thus almost all investment

through the electronic management of the accounts oftrusts issued in Japan have been dematerialized.

investment trust beneficiaries.

23

Flow of funds
Flow of data

Investors(beneficiaries)

Private vendor financial network systems/fax

Fund
distributors

Issuers(trustors)(securities companies,
banks,
insurance companies,
etc.)

AMIs

Fund settlement
corporations(BOJ-NET Fund
settlement
corporations)

JASDECBank of Japan
Japanese Bankers
Association financial
network system

Trustees

Fund settlement
corporations(BOJ-NET Fund
settlement
corporations)

Annual Report 2012

Basic Model of Book-entry Transfer System for Investment Trusts

Strong support from users
The total number of investment trusts handled by JASDEC

in publicly offered and ¥30,712 billion in privately placed

as of March 31, 2012 was 6,868 trusts, representing a year-

investment trusts.

on-year increase of 293 trusts and comprising 4,166 publicly

Fund settlement systems in the Book-entry Transfer

offered and 2,702 privately placed investment trusts. The

System for Investment Trusts include DVP settlement (using

number of transactions undertaken for both new registrations

the Bank of Japan financial network system) and non-DVP(purchases) and deletions (cancellations and redemptions)settlement (using the Japanese Bankers Association financial

achieved new record highs, with the number of new

network system for online fund settlement between financial

registrations below that of deletions. Also, the principal

institutions). The use of DVP settlement, which involves

value of new registrations fell below that of deletions, alower settlement risk, has been increasing steadily among

reversal from fiscal 2010. As a result, the outstanding

system users. In fiscal 2011, the proportion of settlements

balance at the end of fiscal 2011 had decreased ¥2,409 billion

using DVP was 26% by number of transactions and 62% by

year on year to ¥112,507 billion, comprising ¥81,795 billion

principal value.

Book-entry Transfer System for Investment Trusts—account balance and number of issues
Account balance (end of FY or month)24(Trillion yen)

Annual Report 2012

200

5,906

150

105.5

Number of issues (end of FY or month)

6,297

6,575

6,868

6,596

6,597

6,636

6,671

6,685

6,727

6,731

6,774

6,814

6,846

6,863

6,868

110.2

114.9

112.5

115.5

116.5

116.7

117.0

117.2

117.0

116.2

115.2

114.7

114.1

113.4

112.5

100

2008

2009

2010

2011

2011.4

5

6

7

8

9

10

11

12

2012.1

2

6,517

6,319

6,975

6,841

6,815

6,703

7,510

3

Purchase and cancellation/redemption transactions (Daily average)
Purchases

5,131(Transactions)

Cancellations/Redemptions

5,423

6,294

6,904

7,161

6,518

6,385

6,734

9,000
5,686

5,118

4,769

6,058

5,895

6,294

6,423

6,155

5,866

6,087

5,771

5,745

5,688

5,713

8,378
6,908

6,153

3,000
0

(FY)

2008

2009

2010

2011

2011.4

5

6

7

8

9

10

11

12

2012.1

2

3

Principal values of investment trusts for purchases and cancellations/redemptions (Daily average)
Purchases

Redemptions(Billion yen)
261.4

600
400

260.3

282.8

301.9

289.4

288.6

311.0

322.7
355.8

282.4

278.2

277.1

280.1

262.7

259.6

254.0

277.0

264.1

273.4

320.0

404.7
363.8

333.2

291.3

293.5

272.1

255.8

247.9

238.5

229.4

217.7

289.8

200
0

6,000

2,000
(FY)

Account balances are calculated by multiplying the principal amounts for each issue by the number of accounts

6,000

8,000

4,000

50
0

(Issues)

(FY)

2008

2009

2010

2011

2011.4

5

6

7

8

9

10

11

12

2012.12

30

03 Book-Entry Transfer System for Investment Trusts

Participants in Book-entry Transfer System for Investment Trusts(as of March 31, 2012: Numbers in parentheses are for the previous year.)

Issuers 83

Trustees 11

JASDECJASDEC Participants 184

BOJ-NET Fund settlement corporations

47

Designated fund distributors 363
Indirect AMIs 697

Indirect AMIs

JASDEC Participants

Securities
Securities
companies
companies
78 78
(11%)
(11%)

Total
Total

697
697

Banks
Banks
97 97
(14%)
(14%)

OthersOthers1 (0%)
1 (0%)

Financial
Financial
institutions
institutions
for for
small
small
businesses
businesses
507507(73%)(73%)

Financial
Financial
institutions
institutions
for for
small
small
businesses
businesses
9 (5%)
9 (5%)
Investment
Investment
trust
trust
management
managementcompanies
companies
19 19
(10%)
(10%)

OthersOthers8 (4%)
8 (4%)

Total
Total

184
184

Securities
Securities
companies
companies
103103
(57%)
(57%)

Banks
Banks
39 39
(21%)
(21%)

*Others: Securities agents, securities exchanges, CCPs, call loan dealers, etc.

Dedicated to ongoing improvement
In fiscal 2011, in order to simplify procedures for transfer

studies, aiming for a scheme that would be suitable for the

between fund distributors, we investigated changes to ourwidest range of participants.

operating rules and other aspects to support systems. In

During fiscal 2012 (to March 31, 2013), we will continue

addition, we resolved various issues in preparation for theour studies of the operating rules and other factors relating

introduction of DVP settlement for redemptions. However,to simplification of procedures for settlement transfer

since such a scheme would have a major impact on the

between fund distributors. Along with work on other on-internal systems of market participants, we decided, instead,going projects, we will further our efforts to optimize theto treat this as a long-term goal and to carry out further

functionality and user-friendliness of the system.

Annual Report 2012

Investment
Investment
trust
trust
management
managementcompanies
companies
3 (0%)
3 (0%)LifeLife
andandnon-life
non-life
insurance
insurancecompanies
companies
11 11
(2%)
(2%)

25
LifeLife
andandnon-life
non-life
insurance
insurancecompanies
companies
6 (3%)
6 (3%)

Business
Overview

04
DVP
Settlement System
for NETDs
26

Annual Report 2012

JASDEC has combined delivery and payment
into a single, smooth reciprocal system,
reducing risk and raising convenience forcustomers on both sides of the trade.

一般振替
DVP業務

04 DVP Settlement System for NETDs

Providing safe, secure securities transactions
The Non-Exchange Transaction Deliveries (NETDs) refer to

JASDEC participants applying to make use of the system are

Book-entry Transfers for Stocks, etc., carried out by JASDEC

examined for their suitability in terms of financial condition,

for non-exchange transactions, and the majority of them

organizational structure and other such factors before

consist of such trades of domestic and overseas institutional

receiving authorization from JDCC.

investors buying and selling Japanese stocks, etc., through the
DVP settlement system for NETDs.

In order to ensure stringent risk management of allparticipants, JDCC secures collateral in advance, comprising

Previously, the delivery of the securities and the payment

assets (assurance assets) with the appraisal value thatof the settlement amounts for non-exchange transactions

exceeds the net debt (total payables – total receivables) ofhave mostly been processed separately, so the transactions

each participant, and sets an upper limit to the value of thehave been exposed to the risk (principal risk) that settlement

liabilities payable (the net debit cap) in proportion to thepayments may not be made even though the securities havetrading status of each participant.

been delivered. The use of the DVP settlement system for

Settlement within the DVP settlement system for NETDs is

NETDs links the delivery of the securities and the payment

conducted in accordance with the so-called Gross = Net DVPof the settlement amounts through the system, diminishingmodel system by which securities pass through the JDCC

the risk and making it possible for securities settlements to beaccount within JASDEC and the transfer of the securities fromconducted safely and reliably. To further support reliability,

the seller’s into the buyer’s account is conducted separately

the entire administrative process is handled automatically andfor each transaction (gross). Meanwhile, the settlement

electronically using Straight Through Processing (STP).

amounts pass through the JDCC’s account within the BOJNET funds transfer system and settlement is concluded byhas been administered by JASDEC’s wholly owned

the appropriate net calculated amount of funds being paid on

subsidiary, JASDEC DVP Clearing Corporation (JDCC).

each settlement date (net).

Reducing principal risk by using the DVP settlement method

Delivery of securities

Seller

Buyer

Transfer of securities and payment carried out separately
Payment of settlement amount

Use of DVP settlement
Account delivery through JASDEC
Seller’s
account

Securities
data

Account of JASDEC
DVP Clearing Corp.

Stocks data transfer and payments are linked on

Securities
data

Buyer’s
account

the system, enabling secure and reliable settlement

Provision/receipt of funds through current accounts at the Bank of Japan
Seller’s
account

Funding data

Account of JASDEC
DVP Clearing Corp.

DVP system is a system that links the delivery of stocks with payments, enabling secure settlement.

Funding data

Buyer’s
account

Annual Report 2012

Since May 2004, the DVP settlement system for NETDs

27

Establishing key settlement procedures on the customer side
The DVP settlement system for NETDs mainly deals with

In fiscal 2011, healthy growth in the use of the systemsecurities handled by JASDEC through its Book-entry

allowed us to rebate ¥8 out of the ¥20 DVP settlement fee per

Transfer System for Stocks, etc., such as shares and bonds

transaction, in accordance with the participant’s usage level.

with share options, etc.

Since April 2012, we have reduced the DVP settlement fee per

As of the end of March 2012, 54 companies (comprisingtransaction by ¥3 to ¥17.

12 banks and 42 securities companies) were participants inthe DVP settlement system for NETDs. Excluding internaltransfers within the same company, DVP transactions
accounted for more than 60% of NETD transactions—evidence that use of the system has become firmly established
as an important customer-side settlement method.

28
DVP Settlement for NETD Transactions (Daily average)
Annual Report 2012

Non-DVP transactions

DVP transactions(Transactions)
300,000
87,18596,301

84,883

83,29959,37456,18682,522

86,051

82,19971,68075,86388,15385,82688,70392,54379,70773,27380,13785,977

100,411200,000

67,25548,53754,85250,67055,43549,32348,451

6

7

49,536

46,846

41,864

43,15743,08047,25050,916

100,000

0

(FY)

2007

2008

2009

2010

2011

2011.4

5

DVP transactions are the number of transfers executed (transfer from DVP participants to JASDEC DVP Clearing Corporation)

8

9

10

11

12

2012.12

3

04 DVP Settlement System for NETDs

Reducing settlement risks for stock lending transactions
The Financial Services Agency identified a number of urgent

Based on this information, we are currently preparing

measures needed to strengthen the clearing and settlement

for the introduction of DVP settlements in January 2014

system for stock lending transactions in “Development ofwith the aim of reducing settlement risks for stock lending

Institutional Frameworks Pertaining to Financial and Capitaltransactions.

Markets,” published in January 2010.

29
DVP Settlement for NETD Fund Settlement (Daily average)
Total value of net settlement payments

Rate of reduction (Total value of net settlement payments/Total payments × 100)
(%)

2,500

50

2,000

1,804.740
1,294.7

1,500

30
963.7

948.5
1,000

10.4

500

0

(FY)

12.8

12.3

965.8

844.2
12.2

11.9

946.1
13.3

812.5

803.9
10.9

901.5

9.9

820.1

11.2
12.3

835.1

997.5

885.9

785.9

698.2

667.2

9.9

16.6

12.3

11.5

11.3

12.6

187.0

166.3

116.6

118.0

100.1

128.0

102.8

79.9

91.2

111.1

135.8

95.8

88.5

87.8

68.7

87.6

122.6

2007

2008

2009

2010

2011

2011.4

5

6

7

8

9

10

11

12

2012.1

2

3

Securities covered: Stocks, bonds with share options (convertible bonds), ETFs, REITs, share options (share subscription warrants), foreign stocks, etc.
Total payments is the total amount used for execution of securities transfers.
Total value of net settlement payments is the total amount used for account settlement on a net transaction basis.

10.3

20

10

0

Annual Report 2012

Total of payments(Billion yen)Business
Overview

05
Pre-Settlement
Matching System(PSMS)
30

Annual Report 2012

Amid steady growth, JASDEC is readying
the next-generation system with features for
global settlement support, including IS020022
standard and addition of the SWIFT network.

決済照合業務05 Pre-Settlement Matching System (PSMS)

The number of Straight Through Processing (STP) transactions via PreSettlement Matching System (PSMS) is increasing steadily.
Matching institutional investors’ transactions is a complex

Due to mergers and other factors, the number of registeredundertaking, due to the wide range of organizations

users as of the end of March 2012 was 691 companies, five

involved—including investment managers, securities

fewer than the number in the previous year. However, incompanies, trust banks and custody banks—and the hugefiscal 2011, because of the addition of high volume foreign-amount of transaction data exchanged between them. In

owned investment managers and life insurance companies,

the past, matching was done manually by fax or telephone.

the number of input/output transactions on a daily average

Now, the process has been modernized and automated,

increased to 1,360,262, which is 45,000 more than the number

with JASDEC providing centralized matching services using

in the previous year. In Japanese securities market, thesophisticated computer systems.

number of STP transactions via PSMS is increasing steadily.

Since launching the initial system in September 2001, we
have been increasing the range of asset classes and services
covered by the system.

31

Annual Report 2012

PSMS (for non-residents’ transactions)
Overseas

GlobalcustodiansJapan

Settlement
instruction

Investment
managers

Order
Notice of execution
Allocation, matching

Settlement Notice of
Order
instruction execution

Settlement instruction

Settlement
instruction

Subcustodians

Securities
companies

Notice ofmatching status

Pre-settlement
matching
systemSettlement
instruction
Notice ofmatching status

Request for DVP transfer

Linkage with book-entry transfer systems for stocks, etc. and CBs, corporate bonds and CP(excluding Japanese government bonds)

Securities
companies
Notice ofexecution

Order

Stock
exchanges

We are continually building conformity with international standards,
contributing to greater efficiency and reducing settlement risk in theJapanese securities market.
The securities market is continuing to internationalize, andwe recognize that our computer systems do not yet fully

This fiscal year, we have executed an implementation ofconform to recent developments in this field. Though we use

our new system, including generating the XML schemas that

ISO15022, the international standard for messaging,describe JASDEC’s message format specifications. It is based

when we adopted this standard we customized the formats

on the results of our study comparing the message formats

in order to satisfy unique requirements in the Japanese

we use with the ISO20022 message formats. The detailed

market community.

specification documents were released in March 2012.

In doing so, however, we thought that ultimately we would

32

be reflected in international standards.

Turning to our communication network, our aim is toneed to maximize user convenience by achieving the greatest

introduce the SWIFT network, used widely around thepossible degree of harmonization with international standards

world, while running our existing communication networkand connectivity with overseas systems. Therefore, we decided

in parallel, giving users greater choice. Introduction of theto bring our new system, scheduled for launch in January

SWIFT network will, we believe, enable smooth overseas

2014, into compliance with international standards.

connectivity—further increasing user convenience and the

In principle, we will use message formats that comply withnumber of participants.

Annual Report 2012

the new ISO20022 international standard, which defines

In addition to these projects, in order to improve

the ISO platform for the development of financial message

convenience and reduce settlement risk in the securities

standards and is scheduled to replace the current ISO15022

market, we will introduce several new functions shown on thestandard. We will continue to be a member of the ISO20022

following table.

Standards Evaluation Group for Securities within the

We are continually building conformity with international

International Organization for Standardization (ISO), andstandards, contributing to greater efficiency and reducing

will strive to ensure that the practices prevailing in Japan will

settlement risk in the Japanese securities market.

New Service/Function

Domestictransactions

Non-residents’transactions

Breakdown

Improvement of Net Asset Value Datarelated Functions

We will add an approval process to the current NAV data sending function.
We will also introduce a function for transmitting foreign investment account data (yenequivalent value of foreign-currency-denominated assets of investment trusts).

Mitigation of the Risk of Stock Lending
Settlement

We will introduce DVP settlement for stock lending and borrowing transactions (SLBtransactions). To realize this, we will add the following functions to the current DVP
settlement functions for NETDs:• Automatic calculation of the SLB settlement amount• Automatic generation of Settlement Instruction data with the use of the SSI database• Link up with Book-Entry Transfer System• Remodel the functions of “pledged securities” to handle securities used as collateral in
the current SLB market• Collateral Reconciliation service

Matching System for Stock
Transactions Among Dealers

We will introduce a Bilateral Central Matching function for stock trading.

Corresponding Function for Shorteningof the Settlement Cycle of JGB

In order to correspond to the shortening of the Settlement Cycle of JGB, we will introduce
a Tri-party Central Matching function for bond trading.

Tolerance Matching

We will introduce a Tolerance Matching function, commonly-used in foreign markets,
whereby when a discrepancy in the settlement amounts between the settlement
instructions sent by both delivering and receiving settlement agents is within thetolerance, the instructions are processed as matched.

05 Pre-Settlement Matching System (PSMS)

Centralized matching method for three parties (domestic transactions)
Stock exchanges

Notice of execution

Investment trust
management/
advisory
companies

Order

Order
Notice of execution
Allocation

Pre-settlement
matching system
Investment instruction

Trade report

Notice of matching status

Trade matching
Notice of matching status

Investment instruction andtrade report

Affirmation/
Disaffirmation

Trade report affirmation



Securities
companies

Notice of trade reportaffirmation status

Settlement
matching

Notice of matching status

Annual Report 2012

SSI

Trust banks

Notice of matching status

Request for DVP transfer

Linkage with book-entry transfer systems for stocks, etc. and CBs, corporate bonds and CP(excluding Japanese government bonds)

Total number of PSMS input/output instructions using the PSMS system (Daily average)(Thousand))
2,000
1,503
1,500

1,327

1,314

1,360

1,333

2009

2010

2011

2011.4

1,246

1,221

1,281

5

6

7

1,422

1,405

8

9

1,510

1,390

1,301

1,294

12

2012.1

1,422

1,482

1,000

500

0

(FY)

2008

Nominal value is the value at time of issuance (based on the amounts for each bond)

10

11

33

2

3

Business
Overview

06
Custody Services
for Foreign Stock
Certificates, etc.
34

Annual Report 2012

Making it easier for Japanese to invest
in foreign companies by handling thecomplicated procedures involved in transfers,
dividend payments and taxation.

外国株式等保管振替決済業務

06 Custody Services for Foreign Stock Certificates, etc.

Safe and secure settlement infrastructure and services for foreign stocks
In April 2006, JASDEC inaugurated services to process

Based on this information, the share-handling service

deposits, transfers and corporate actions for foreign stock

agents calculate the amount of dividends, which are then paid

certificates, etc., listed on Japanese stock exchanges.

directly to the beneficial shareholders from the dividend-

Although foreign stock certificates, etc. are generally

paying banks.

deposited with CSDs or custodians in the same countries as

JASDEC also undertakes the necessary procedures

the issuing companies, settlements of transactions at Japaneseregarding dividend taxation for local tax authorities and otherstock exchanges are conducted through book-entry transfers

such entities, to ensure reduced tax rates under tax treaties

in JASDEC.

with the countries concerned. Beneficial shareholders can also

JASDEC entrusts dividend payments to relevant
share-handling service agents. Information on beneficial

exercise their voting rights at general meetings of shareholders
through instructions issued to JASDEC.

shareholders at the dividend record date is transferred to

JASDEC therefore provides the infrastructure and services

the share-handling service organizations by the JASDEC

necessary for reliable settlement of trading activities in foreign

participants through JASDEC.

stock certificates, etc., smooth exercise of shareholder rights,
and error-free receipt of dividends and other payments.

35

Overseas CSDs
Share-handling service agents (trust banks)

Notice ofbeneficial
shareholders

Japan Securities Clearing Corporation

Stockexchange
DVP

Dividend
information

Shareholder notice host

Account transfer host(handling of information concerning beneficial
shareholders, dividends, etc.)

Collateralmatching

Beneficial
shareholder
reportDividend
information

Custodian banks

Notice ofbalance(settlement)

Non-DVP
transfer for
NETD

DVP transfer
for
NETD

AMIs (Securities companies and banks)

Beneficial shareholders of foreign stock certificates, etc.

Local custody/transfer

Communication
server with foreign
CSDs/banks

Annual Report 2012

Overview of the system relating to foreign stocks

Handling responses to various forms of corporate action
Foreign companies have carried out a variety of corporatetransfer. We are also considering handling various new

actions in recent years. For example, in fiscal 2011, we

products listed on domestic financial exchanges.

processed the distribution of investment unit dividends withAt present, foreign securities under the custody of the

cash dividend options, which are subject to a ceiling on the

Depository and Book-entry Transfer System for Foreign

cash dividend portion. We also carried out the necessary

Stock Certificates, etc. includes four categories: foreign stocks

processes relating to dividend payments to beneficial(including ADRs); overseas ETFs (including ETCs); country

shareholders, after completing checks related to tax matters,

funds; and foreign covered warrants. At the end of Marchas required. JASDEC is taking steps to improve services

2012, the number of different issues handled by JASDEC

offered to beneficial shareholders and JASDEC participants,in the three categories of foreign stocks, overseas ETFs andsuch as exchanging information with JASDEC participants

country funds stood at 38, while the number of foreign

through the encryptable Target-Hofuri website, which

covered warrants handled stood at 40.

improves the speed, reliability and security of information

36

Annual Report 2012

Foreign stocks, etc.—number of issues/balance in accounts (excluding foreign covered warrants)
Balance in accounts (end of month)

Number of issues (end of month)(Issues)(Thousand shares)
200,000

42

41

41

41

41

41

41

41

40

38

40

50

40

39

38

38
40

130,692

150,000

25
100,000

79,53189,90588,93095,73673,41673,561

76,00083,502

83,61083,311

83,174

83,19783,04989,28388,93030
20

50,000

0

10
(FY)

2008

2009

2010

2011

2011.4

5

6

7

8

9

10

11

12

2012.1203Foreign covered warrants—number of issues/balance in accounts
Balance in accounts (end of month)

Number of issues (end of month)(Issues)(Thousand warrants)

371,300

400,000

125

106
102,000

120,000

80
76,36065

80,00080

86,360105,560 105,560

87

76,100

78

78

100

86,900776756,10041,80040

54,00047

49

54,00065,000594975
41,80040

50

2640,000093,060105,560

25
(FY)

2008

2009

2010

2011

2011.4

5

6

7

8

9

10

11

12

2012.12

3

0

06 Custody Services for Foreign Stock Certificates, etc.

Number of shares deposited/withdrawn
Number of shares deposited(Thousand shares)
500,000

480,306

246,465

118,585

115,478

71,167

Number of shares withdrawn
1,520

425

1,341

801

419

25,651

174

313

10,0571,317

531

28,612

131,801

30,00016,52823,65016,382

17,762
10,976

7,917

7,788

10,00020,478

5,412

3,228
1,090
586

1,000

0

(FY)

2009

2010

2011

2011.4

5

6

7

8

9

10

11

12

9,903

18,580

7,663

6,480

5,603

6,850

2012.12

3

14,20019,532Book-entry transfers
Non-exchange transaction deliveries(Thousand shares)
500,000

274,119

158,573

133,511

Exchange transaction transfers
16,2008,927

258,701
300,000

10,31537
236,159

19,03020,000

(FY)

2009

2010

2011

2011.4

5

31,945

21,533
14,7396

20,704

13,209

7

8,138
8

9

7,555
10

11

25,401

9,548

12

2012.1

2

3

Annual Report 2012

31,86132,49040,00009,253

469,524