Book-Entry
Transfer System
for Stocks, etc.

121Business Overview 1 — 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

established by cooperative associations, Exchange Traded

operations in January 2009. Stock certificates issued by all

Funds (ETFs), Japanese Depositary Receipts (JDRs) andJapanese companies listed on Japanese stock exchanges wereother negotiable securities.

abolished and became invalid. They were replaced by elec-

As of March 2011, the total number of issues handled

tronic records registered and managed by computer systems

was 3,819, including 3,640 share issues, 43 bonds with sharewithin accounts opened at JASDEC or account management

options, 5 share options, 37 investment units, one preferredinstitutions (AMIs) such as securities companies and banks.

share issue, 89 ETFs, and 4JDRs. The number of companies

Instead of stock certificates, records in computer systems

participating in the new system, including JASDEC par-represent share ownership. Transfer of shareholders’ rights

ticipants, indirect AMIs, and fund settlement corporations,is also processed electronically based on the records in thewas 420. Under the system, foreign financial institutions

accounts. This dematerialization system applies not only todesignated by competent ministers can also take part in thestock certificates, but also to bonds with share options, sharesystem. As of March 2011, 50 foreign financial institutions

options, investment units of Real Estate Investment Trusts

were participating as indirect AMIs.

(REIT), preferred equity investment of financial institutions

The Book-Entry Transfer System for Stocks, etc.

JASDEC participants and indirect AMIs (as of March 31, 2011)
JASDEC Participants by Category

Issuing company
Shareholder registry
General Shareholders
Notification

JASDEC

Direct AccountManagement Institution

224

companies

Direct AccountManagement Institution

91

companies

Foreign indirect
AMIs
50 (55%)

Indirect AccountManagement Institution

Securities
companies, etc.
23 (25%)

Securities companies, etc.
185 (83%)

Banks, etc.
23 (10%)(securities companies, banks, etc.)

Participants(shareholders)

Banks, etc.
17 (19%)

Total

Securities financecompanies
3 (1%)

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

Participants(shareholders)Stockexchanges, etc.
1 (1%)

Life & non-life
insurancecompanies
2 (1%)

Total

Transfer Book-entry transfer Transfer
Account
AccountBookBook(securities companies, banks, etc.)

Indirect AMIs by CategoryStockexchanges, etc.
11 (5%)

Participants(shareholders)

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

3,952

420

3,839

412.9

418.6

Number of issues (end of FY or month)
3,710

3,703

3,699

3,692

419.5
412.3

412.4

413.4

3,680

417.9

3,677

418.4

3,664

418.8

3,661

418.7

3,652

416.4

3,648
417.7

3,643

418.1

3,640

418.6

394.8

400
303.3

0

3,948

3,640

(FY)

2006

2008

4,000
3,500

320.0

2007

(Issues)

2009

2010

2010.4

5

6

7

8

9

10

11

12

2011.12

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

Japan Securities Depository Center, Inc. Annual Report 201113

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

processing time prior to the date of rights allocation of shareized Book-entry Transfer System for Stocks, etc. has been

options without compensation. For the individual share-

operating smoothly, with no major problems. JASDEC has

holder notification, we are working to reduce the number

organized three subcommittees to examine further improve-of days between the time the shareholder applies for thement of the new system: the Subcommittee for Stocks,

notification procedure and the time the issuer receives thethe Subcommittee for Bonds with Share Options, and thenotification.
We expect to renew each of the systems in our book-entry

Subcommittee for ETFs. These committees have promoted atransfer system for stocks, etc. in January 2014. Together withnumber of initiatives.
From July 2010, the Act on Transfer of Bonds, Shares,

this renewal, we will make improvement where necessary inetc. was applied to Japanese Depositary Receipts (JDRs)

the current system and change the system specifications. We

provided for in the Trust Act, and the depository and book-have notified all the parties involved with this system of theentry transfer of Japanese Depositary Receipts (which hadchanges that we plan to make.

until then been performed separately) was brought into theWe will continue our efforts to communicate effectively

Book-entry Transfer System for Stocks, etc., and we beganwith relevant parties, aiming to ensure stable operation while

processing four issues of domestic ETFs.

meeting the needs of the market for convenience and userfriendliness.

For the issue of share options, we are working to reduce
the general shareholders notification period to shorten theBond with Share Option account balance and number of issues
Balance in custody (end of FY or month)
Number of issues (end of FY or month)(Billion yen)

1,540.5

1,600(Issues)

1,408.1

117

1,300

150
1,154.5

96

70

1,000
0

(FY)

2006

2007

2008

1,211.5 1,168.1
50

2009

1,211.6 1,211.6 1,211.6 1,214.1 1,213.6 1,195.2 1,255.3 1,255.3 1,251.3
45

45

46

45

46

46

44

44

44

1,250.8 1,246.9
431,168.1

43

43

43

2010

2010.4

5

6

7

8

9

10

11

100
50

2011.1

2

3

0

89

89

90

93

(Issues)

2,848

2,796

12

*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)
Number of issues (end of FY or month)(Million accounts)

4,000

2,009

3,000

1,927

2,000

66

77
2,306

2,563

2,308
74

76

76

81

2,327

2,328

2,337

83
2,301

2,749 2,563

2006

2007

75
25

14
(FY)

100
50

2008

2009

2010

2010.45

6

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

14

3,245 3,165 3,016
87
86
83

38

1,000
0

1,873

93

Japan Securities Depository Center, Inc. Annual Report 2011

8

9

10

11

12

2011.12

30

Business Overview 1 — Book-Entry Transfer System for Stocks, etc.

Book-entry transfers
Stock-exchange transfers

670.1 677.4
369.0 345.1
681.5 718.0 695.1
364.2
523.8 607.7 418.3
378.0
114.2 119.8(Billion shares)

1,400
900
600

Transfers between JASDEC participants

88.5(Billion shares)

373.9

31.3

60

2006 2007 2008 2009 2010

(FY)

63.2

120

0

53.0

58.8

54.1

52.6

58.7

49.4

47.5

28.0

29.1

24.7

23.8

25.9

26.7

28.7

5

6

7

8

9

10

11

12

55.0 85.7

46.7

53.0

48.5

29.1

2010.4

(FY)

47.9

60.7

59.1

53.2

68.4

54.1

53.0

54.7

180

300
0

Internal transfers within the same companies

55.3

50.3

29.2

26.0

2011.1

2

42.0

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

General shareholders notifications
General shareholders notifications

127,240 129,619
8,888
9,260

(Billion shares)

1,000
400
300
4,094
551

100
50
0

946.3

(Notifications, in thousands)

11,8732,796

884

1,001.1

1,165743
129 185
2.3

2009

2010

46,292

46,647
377.5

20.8

2008

(FY)

Total shareholders

Number of issues

2010.4

5

82.0
6.8

7

8

9

306
11.5

3.3

10

47,00011,625

1,035 2,930
164

3.9

6

130,000

2,770

380.5

1,489
930
195
133
8.4

11

12

854
1,387
171
88.8

14.5

2011.1

2

21.0
3,497
301

12,000
5,000
2,500

3

0

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

Individual shareholder notifications(Total record) notifications

Number of issues(Partial record) notifications

448
2,656

(Notifications)

3,000

412

(Issues)

359
(FY)

2008

212

2009

2010

150
0

0

314

1,155

1,200

100

(Issues)

1,589

1,600

27
16

500

72

400

(Total record) number of issues(Partial record) number of issues(Notifications)600

1,958 400

2,000

0

Information requests

Number of notices

(FY)

250
87

79

477

356

131

2009

100
50

45

2008

350

2010

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

16,45916,325

16,355

16,383

16,40816,43016,453

16,47916,495

16,402

16,422 16,426 16,459

2010

2010.4

5

6

7

8

9

10

11

12

2011.1

16,00014,93515,000
0

(FY)

2008

2009

2

3

*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.

Japan Securities Depository Center, Inc. Annual Report 201115

Book-Entry
Transfer System
for Commercial
Paper andCorporate Bonds

16

2

Business Overview 2 — 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 struc-

corporate bonds. In each system, custody procedures—ture 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 issu-

JASDEC, and indirect participation is possible by opening anance, transfer and redemption of CP and corporate bonds

account at an AMI. Another option for indirect participation

can be processed by the DVP settlement link with the Bank ofis through the opening of an account at an indirect AMI.

Japan’s Financial Network System. By linking the book-entry

Principal and interest payments to bondholders are made bytransfer system with its PSMS (Pre-Settlement Matching

paying agents via AMIs, in accordance with the multilayered

System; see page 30), JASDEC has realized straight-throughstructure.

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

SellerTrade matching

Notice of settlement
matching status

Settlement
parties

Notice of settlement
status(Awaiting fundsettlement)

Affirmation

Settlement matching
Pre-Settlement Matching
SystemSecurities transfers
Book-entry Transfer System
for CP/Corporate Bonds

Trade matching

Notice of settlement
matching status

Notice of settlement
status(Awaiting fundsettlement)

Notice of receipt
completion

Payment instruction
Payment request

Notice of receipt
completion

Settlement
parties

Notice of transfer
completion

Notice of transfer
completion

Fund
settlement
corporation

Buyer

JASDECBank of Japan
Payment instruction

Fund
settlement
corporation

Japan Securities Depository Center, Inc. Annual Report 201117

Enhancing CP transaction transparency
Commercial paper (CP) currently refers to short-term cor-

Fiscal 2010 (to March 31, 2011) was largely unaffected

porate bonds in a dematerialized form issued by corporate

by anything except for the Great East Japan Earthquake

entities as a means of procuring short-term funds. As CP wasthat occurred at the end of the financial period, andpreviously drawn as a promissory note in a physical form,

our account balance and number of issues continued

risks involved in the transfer and deposit of notes for large

at around about the same level as in the previous

amounts were not always avoidable, and a documentaryfinancial period. As of March 31, 2011, the total CP

stamp tax was also payable. Accordingly, demand developed

account balance in the system was ¥14,033.2 billion

for an electronic book-entry system that would eliminate(a year-on-year decline of ¥85.2 billion) on 4,392 issues (athe need for paper certificates. The result was the creation

year-on-year decline in the number of issues of 338).

of our first fully electronic book-entry transfer system fordematerialized CP. Since the launch of the system eight years
ago, almost all CP issued in Japan has been handled by thissystem.

Participants in Book-Entry Transfer System for CP (as of the end of March 2011)
Issuers 488 companies

Issuing/
paying agents

JASDECJASDEC
Participants(Direct AMIs)

Indirect
AMIs

68

38

21
Fund settlement corporations

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

18

Japan Securities Depository Center, Inc. Annual Report 2011

CP holders

Business Overview 2 — Book-Entry Transfer System for Commercial Paper and Corporate Bonds

CP account balance (nominal value) and number of issues(Trillion yen)

30

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

6,129

7,000

5,759

5,869
4,730

20

18.9

20.2

4,392

4,706

4,659

4,727

4,801

4,539

4,489

4,673

4,564

6,000

4,799

4,537

4,488

4,392

18.7
14.1

14.0

15.8

15.1

15.1

14.8

15.5

15.6

14.9

14.1

15.6

15.7

15.7

14.0

10

5,000
4,000
3,000
2,000
1,000

0

(FY)

2006

2007

2008

2009

2010

2010.4

5

6

7

8

9

10

11

12

2011.12

03

Nominal value is the value at time of issuance (based on the amounts for each bond)Issuance, transfer and redemption of CP (daily average)
Redemptions
Transfers

Total: over
¥4 trillion

Issuance(Trillion yen)

6.0
0.7

0.7

0.6
0.4

0.4

0.4

0.4

0.4

0.4

0.4

0.5

3.9

3.9

4.0

3.9

3.8

0.5

0.4

0.4

0.4

3.6

3.7

3.8

3.8

0.4

0.5

0.4

0.5

4.0
3.7

4.1

0.7

0.7

4.3

4.2

3.8

3.8

3.8

3.5

2.0

0

(FY)

2006

2007

0.6

2008

0.4

2009

0.4

2010

0.5

0.4

2010.4

5

0.4

6

0.4

7

0.4

8

0.4

9

0.4

10

0.4

11

12

2011.1

0.4

2

0.4

3

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

This huge settlement amount reflects the importanceof CP handled by JASDEC’s book-entry transfer system mayof CP, which plays a crucial role in fund procurement byexceed ¥5 trillion per day, and in combination with month-business entities in Japan. As a provider of infrastructure

end settlements of more than ¥10 trillion this means thatfor the settlement of securities transactions, JASDEC fully

JASDEC settlements surpass the trading value per day at therecognizes its responsibility to secure a high level of reliabil-

Tokyo Stock Exchange. In fiscal 2010, although the aggregate

ity in the book-entry transfer system. As the market for CP

issuance amount declined, the aggregate settlement was closetransactions evolves, we will continue to make every effort

to the ¥1,000 trillion mark, indicating the continuation of

to ensure that our system remains responsive, reliable andactive trading since the start of the system.

up-to-date.

Japan Securities Depository Center, Inc. Annual Report 201119

Expanding functions to increase convenience and efficiency
JASDEC’s Book-entry Transfer System for Corporate Bondsof March 2011, the number of bonds eligible in the system

handles various types of bonds, both through public offer-

was 67,788 issues (a year-on-year decline of 3,414 issues),

ings and private placements. These include corporate bonds,

and the issue balance stood at ¥250,073.9 billion (a year-on-

municipal bonds, bonds issued by investment firms, specified

year increase of ¥4,521.6 billion).

bonds issued by special purpose companies (SPCs), bonds

Continuing on from the previous fiscal year, althoughof special corporations such as quasi-government and local

there were a number of defaults on obligations to public

government bodies, and Samurai bonds (yen-denominatedbonds, due to the ongoing economic recession and otherbonds issued in the Japanese bond market by non-Japanese

factors, JASDEC contacted the parties at an early stage andentities or foreign governments) and others.

worked with them to ensure optimal information flow andIn fiscal 2010, most companies actively raised financecooperation.

in the climate of low interest rates. Although the GreatWe expanded the range of information disclosure con-

East Japan Earthquake at the end of the fiscal year slowed

cerning bond issuance and made other improvements to thethis activity, fiscal 2010 recorded the highest balance offunctionality of our systems as part of our efforts to raise thebonds since the start of the Book-entry Transfer System forlevel of convenience to our system users.

Corporate Bonds, surpassing ¥250,000 billion. As of the end

Participants in Book-Entry Transfer System for Corporate Bonds (as of the end of March 2011)

Issuers 2,539 companies and organizations*

Issuing/
paying agents

JASDECJASDEC
Participants(Direct AMIs)

Indirect
AMIs

88

432

204
Fund settlement corporations

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

20

Japan Securities Depository Center, Inc. Annual Report 2011

Bond holders

Business Overview 2 — Book-Entry Transfer System for Commercial Paper and Corporate Bonds

Outstanding balance of corporate bonds and number of issues
Outstanding balance (end of FY or month)
Number of issues (end of FY or month)(Trillion yen)300

72,81773,298241.0(Issues)

71,202240.2

67,788245.5

71,015250.0

70,62770,364

246.9

246.2

70,00069,847

69,992

248.8

248.4

248.1

247.1

70,07469,71569,556

250.5

250.2

249.7

69,504

69,111

67,788
251.9
250.0

251.3

80,00060,000200

40,000100

0 (FY) 2007

20,000
2008

2009

2010

2010.4

5

6

7

8

9

10

11

12

2011.12

30Promoting investments in Japanese bonds by non-residents
Investments in domestic securities by non-residents alreadythan municipals in the scope of tax exemptions for non-account for a significant proportion of the total investment

residents, we have begun to take appropriate measures toin Japanese securities market. To raise the position of Japan’s

promote the globalization of Japanese capital markets. As acapital markets in the world, however, market functions

result, the number of participating foreign indirect Accountmust be upgraded so as to attract more foreign investors. In

Management Institutions (AMIs) has greatly increased (23January 2008, a system for tax exemption for non-residents

more companies than at the end of the previous fiscal year).

on the interest accrued on municipal bonds was inaugurated,

The total outstanding balance of non-resident accounts atfollowing a system similar to that used for Book-entry

the end of March 2011 stood at ¥930.5 billion (a year-on-year

Transfer of Japanese government bonds. Moreover, sinceincrease of ¥811.1 billion), and the number of issues held byJune 1, 2010, in response to the inclusion of bonds othernon-residents was 320 (a year-on-year increase of 286).

Japan Securities Depository Center, Inc. Annual Report 201121

Book-Entry
Transfer System
for Investment
Trusts22

3

Business Overview 3 — Book-Entry Transfer System for Investment Trusts

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

The account management institutions (AMIs) andcomputer system for managing beneficial rights of invest-

JASDEC participants are diverse, consisting of not only secu-

ment trusts.

rities companies but also entities such as banks, insurance

The system covers investment trusts managed by trus-

companies, Shinkin banks, credit cooperatives, agricultural

tors (hereinafter, simply called “investment trusts”). These

cooperatives, and investment trust management companies

investment trusts are contract-type investment trusts withengaged in direct marketing. The total number of AMIs andthe involvement of three parties—a trustor, a trustee and

JASDEC participants was 881 companies as of March 31,

a beneficiary who is an investor in the investment trust.

2011.

(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.

all trustors and trustees involved in investment trusts haveThis ensures greater security, accuracy, and speed of process-participated in the system, and thus almost all investment

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

investment trust beneficiaries.

Basic Model of Book-entry Transfer System for Investment Trusts
Investors

Flow of funds
Flow of data

(beneficiary)

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)Japan Securities Depository Center, Inc. Annual Report 201123

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

billion, comprising ¥83,127.2 billion in publicly offered andas of March 31, 2011 was 6,575 trusts, representing a¥31,789.8 billion in privately placed investment trusts.

year-on-year increase of 278 trusts and comprising 3,885

Fund settlement systems in the Book-entry Transfer

publicly offered and 2,690 privately placed investment

System for Investment Trusts include DVP settlement (using

trusts. The number of transactions undertaken for both new

the Bank of Japan financial network system) and non-DVP

registrations (purchases) and deletions (cancellations andsettlement (using the Japanese Bankers Association financial

redemptions) achieved new record highs, with the number

network system for online fund settlement between financialof new registrations below that of deletions. On the otherinstitutions). The use of DVP settlement, which involves lesshand, the principal value of new registrations exceeded that

settlement risk, has been increasing steadily among systemof deletions, a continuation of the situation in fiscal 2009.

users. In fiscal 2010, the proportion of settlements using DVP

As a result, the outstanding balance at the end of fiscal 2010

was 25% by number of transactions and 60% by principal

had increased ¥4,665.2 billion year on year to ¥114,917.0

value.

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

200
150

5,906

6,297

6,575

105.5

110.2

114.9

(Issues)

6,329

6,337

6,369

6,391

6,414

6,436

6,468

6,510

6,525

6,547

6,566

6,575

8,000

111.2

111.8

112.1

112.5

113.1

113.5

114.0

114.5

114.7

115.3

115.5

114.9

6,000

100

4,000

50

2,000

0

(FY)

2008

2009

2010

2010.4

5

6

7

8

9

10

11

12

2011.1

2

3

0

6,822

6,942

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

Purchase and cancellation/redemption transactions (Daily average)
Purchases
Cancellations/Redemptions
6,294
5,423
5,131

(Transactions)

8,000
6,000

5,686

5,118

4,769

6,525

6,169

6,244

5,412

5,301

5,381

5,386

6

7

5,489
5,291

5,506

5,261

6,745

6,672

6,539

6,159

5,907

6,196

5,743

5,499

6,348

6,395

6,030

4,000
2,000
0

(FY)

2008

2009

2010

2010.4

5

8

9

10

11

12

2011.1

2

3

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

600
282.8

261.4

400

260.3

288.6

301.9

311.0

2009

2010

382.7

332.3
349.9

317.5

240.1

230.2

259.2

270.1

261.2

6

7

8

305.4

273.6

274.0

248.6

266.9

299.1

293.5

303.9

319.4

9

10

11

12

325.7

371.4

311.9

296.2
326.8

349.8

200
0

24

(FY)

2008

2010.4

5

Japan Securities Depository Center, Inc. Annual Report 20112011.1

2

3

Business Overview 3 — Book-Entry Transfer System for Investment Trusts

Participants in Book-entry Transfer System for Investment Trusts(as of March 31, 2011: Numbers in parentheses are for the previous year.)

Trustees 11 (12)Issuers 83 (87)

JASDECJASDEC Participants 182(187)

BOJ Net Fund settlement corporations

46 (46)

Designated fund distributors 368 (382)Indirect AMIs 699 (710)
Investment
trust management
3companies

Indirect AMIs
Life and non-life
insurance companies

Others
8

1

Total

699
97

6

OthersSecurities
companies

Banks

Life and non-life
insurance companies

9

11

82

JASDEC Participants
Financial institutions
for small businesses

Financial
institutions
for smallbusinesses
505

Investment
trust
managementcompanies 18

Total

182

Banks
37

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

Dedicated to ongoing improvement
In response to requests made by system participants in a pre-functions to simplify the procedures for settlement transfer

vious survey, we have made particular efforts in fiscal 2010 to

between fund distributors in the Book-entry Transfer System

improve the functioning of the Book-entry Transfer System

for Investment Trusts and are developing the System withfor Investment Trusts. We studied proposals for compara-

the goal of having it begin operations in 2014.

tively major system reorganizations, such as the introduction

During fiscal 2011 (to March 31, 2012) in addition toof DVP settlement for redemptions and simplification of the

our studies into the introduction of DVP settlement forprocedures for settlement for transfer between fund distribu-

redemptions and our work on other on-going projects, wetors, and we prepared a scheme and have identified the issues

will continue efforts to optimize the functionality and user-

following a feasibility study. As a result, we will add extra

friendliness of the system.

Japan Securities Depository Center, Inc. Annual Report 201125

DVP Settlement
System for NETDs

26

4

Business Overview 4 — DVP Settlement System for NETDs

Providing safe, secure securities transactions
The Non-Exchange Transaction Deliveries (NETDs) refer toparticipants applying to make use of the system are examined

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

for their suitability in terms of financial condition, organi-for non-exchange transactions, and the majority of themzational structure and other such factors before receiving

consist of such trades of domestic and overseas institutional

authorization from JDCC.
In order to ensure stringent risk management of all

investors buying and selling Japanese stocks, etc., throughparticipants, JDCC secures collateral in advance, comprising

the DVP settlement system for NETDs.
Previously, the delivery of the securities and the payment

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

the net debt (total payables – total receivables) of each par-have mostly been processed separately, so the transactions

ticipant, and sets an upper limit to the value of the liabilities

have been exposed to the risk (principal risk) that settlement

payable (the net debit cap) in proportion to the trading status

payments may not be made even though the securities haveof each participant.

been delivered. The use of the DVP settlement system for

Settlement within the DVP settlement system for NETDs

NETDs links the delivery of the securities and the payment ofis conducted in accordance with the so-called Gross = Net

the settlement amounts through the system, diminishing the

DVP model system by which securities pass through therisk and making it possible for securities settlements to be

JDCC account within JASDEC and the transfer of the securi-

conducted safely and reliably. To further support reliability,

ties from the seller’s into the buyer’s account is conducted

the entire administrative process is handled automaticallyseparately for each transaction (gross). Meanwhile, the settle-

and electronically using Straight Through Processing (STP).

ment amounts pass through the JDCC’s account within the

Since May 2004, the DVP settlement system for NETDs

BOJ-NET funds transfer system and settlement is concluded

has been administered by JASDEC’s wholly owned subsid-

by the appropriate net calculated amount of funds being paidiary, JASDEC DVP Clearing Corporation (JDCC). JASDEC

on each settlement date (net).

Reducing principal risk by using the DVP settlement method
Delivery of securities

SellerTransfer of securities and payment carried out separately

Buyer

Payment of settlement amount

Use of DVP settlement
Account delivery through JASDEC

Seller’s
account

Securities
data

Account of JASDEC
DVP Clearing Corp.

Securities
data

Buyer’s
account

Stocks data transfer and payments are linked on 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.

Funding data

Buyer’s
account

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

Japan Securities Depository Center, Inc. Annual Report 201127

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

We began back-tests each working day to verify the

securities handled by JASDEC through its Book-entry

safety of both securities-to-be-received and pledged securi-

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

ties, which are part of the assurance assets. Each quarter wewith share options, etc.

compile a report of the results of these daily checks and post
it on the JASDEC website.

As of the end of March 2011, 57 companies (comprising
13 banks and 44 securities companies) were participants inthe DVP settlement system for NETDs. Excluding internaltransfers within the same company, DVP transactions
accounted for approximately 60% of NETD transactions—evidence that use of the system has become firmly established
as an important customer-side settlement method.

DVP Settlement for NETD Transactions (Daily average)
Non-DVP transactions(Transactions)

DVP transactions

300,000

96,301
100,411
87,18567,255200,000

84,883

83,29986,22459,37456,18659,727200920102010.4

99,016 77,117
62,47476,08873,05371,42355,40451,78449,40650,8036

7

8

989,302

90,387

96,68984,591
65,62958,29080,731 76,933

51,76954,67659,54310

11

12

55,088100,000

0

(FY)

2007

2008

5

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

28

Japan Securities Depository Center, Inc. Annual Report 20112011.1

2

3

Business Overview 4 — DVP Settlement System for NETDs

DVP Settlement for NETD Fund Settlement (Daily average)
Total of payments(Billion yen)

2,500
2,000

Total value of net settlement payments

40
1,294.7
948.5

1,000
10.4

0

50

1,804.7

1,500

500

(%)

Rate of reduction (Total value of net settlement payments/Total payments × 100)187.0
(FY) 2007

963.7

1,037.1

1,196.7

1,157.6
867.2

821.9

805.2
14.7

12.8

12.3

12.2

12.5

11.5

11.3

14.2 746.011.2

166.3

116.6

118.0

129.9

137.8

98.2

116.3

83.3

5

6

7

8

2008

2009

2010

2010.4

907.3

906.5

905.5

1,323.1

922.7

30
20

10.9

10.4

12.2

12.3

12.2

13.2

118.6

98.9

94.5

110.7

113.7

141.5

174.9 10

9

10

2

3

11

12

2011.10

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.

Aiming for an even greater level of convenience
To provide for cases of default by participants, liquid assets

structure, we continuously assess the applicable levels tohave been secured by the use of the participant fund andensure that they are suitable for its requirements.

bank credit lines. And in order to limit the risk to within

JDCC is aiming to improve its systems and offer a greater

the bounds of liquid assets, JDCC has set maximum upper

range of services in its ongoing efforts to operate its systems

limits (the net debit cap) for the liabilities payable by eachin a way that will further enhance the level of customer

individual participant. To optimize and refine the system

convenience.

Japan Securities Depository Center, Inc. Annual Report 201129

Pre-Settlement
Matching System(PSMS)

30

5

Business Overview 5 — Pre-Settlement Matching System (PSMS)

Maintaining transaction and user numbers throughincreasing the range of asset classes and services
Matching institutional investors’ transactions is a com-continuing to study ways to expand the range of asset classes

plex undertaking, due to the wide range of organizations

and services, including foreign securities.

involved—including investment trust management

As a result of these on-going efforts, both the number ofcompanies, securities companies, trust banks and custodytransactions and number of users are holding steady. In fiscal

banks—and the huge amount of transaction data exchanged

2010, the number of input/output transactions on a daily

between them. In the past, matching was done manually by

average basis was 1,314,983. Although the number of exist-

fax or telephone. Now, the process has been modernized anding users declined in fiscal 2010 due to mergers and otherautomated, with JASDEC providing centralized matching

factors, the addition of new users (foreign-owned investment

services using sophisticated computer systems.

managers, business entities, and life and non-life insurance

Since launching the initial system in September 2001,

companies) increased the number of registered users as of

JASDEC has been increasing the range of asset classes andthe end of March 2011 to 696 companies, two more than theservices covered by the system. In April 2010 we revised

record high set in the previous year.

the cut-off time for non-resident transactions. We are also

PSMS (for non-resident transactions)
Overseas
GlobalcustodiansJapan

Settlement
instruction

Investment
managers

Settlement
instruction

Order

Securities
companies

Notice ofexecution
Allocation,
matching

Settlement
instruction

Settlement
instruction

Subcustodians
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)

Notice ofexecution

Order

Securities
companies

Notice ofexecution

Order

Stock
exchanges

Japan Securities Depository Center, Inc. Annual Report 201131

Final preparation for adopting the ISO20022 standard
The securities market is continuing to internationalize, andwill strive to ensure that the practices prevailing in Japan will

we recognize that our computer systems do not yet fully

be reflected in international standards. This fiscal year we

conform to recent developments in this field. Though we use

largely completed our study comparing the message formats

ISO15022, the international standard for messaging, when

we use in settlement matching for domestic transactions

we adopted this standard we customized the formats in orderwith the ISO20022 message formats. We are continuing a

to satisfy unique requirements in the Japanese market com-similar study comparing the message formats we use in trade

munity. In doing so, however, we understood that ultimately

matching for domestic transactions with ISO20022 message

we needed to maximize user convenience by achieving theformats.

greatest possible degree of harmonization with international
standards and connectivity with overseas systems.

Turning to our communication network, our aim is tointroduce the SWIFT network, which is used widely around

Accordingly, since fiscal 2007 JASDEC has been pursu-

the world, while running our existing communication

ing a project to achieve full conformity with international

network in parallel, enabling users to choose between them.

standards, through initiatives in a number of areas. At the

Introduction of the SWIFT network will, we believe, enable

ISO20022 Subcommittee, we are looking into overall systemsmooth overseas connectivity—further increasing user con-development, including Pre-Settlement Matching Systemvenience and the number of the participants.

(PSMS), and the various book-entry transfer systems forstocks, etc., corporate bonds, CP and investment trusts.

In addition to this work, we are reconsidering Japanesemarket practice to meet international standards, including

In principle, we will use message formats that will

the tolerance matching function for non-resident transac-

comply with the new ISO20022 international standard thattions. We are also planning to unify all the rules useddefines the ISO platform for the development of financial

throughout our entire system. We plan to bring our new

message standards, which is designed to replace the current

system into service in January 2014.

ISO15022. We will continue to be a member of the ISO20022

By expanding the range of asset classes and services

Standards Evaluation Group for Securities within thehandled by our PSMS, and by steadily building conformity

International Organization for Standardization (ISO), andwith international standards, we are contributing to greater
efficiency in Japan’s securities markets.

32

Japan Securities Depository Center, Inc. Annual Report 2011

Business Overview 5 — 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 reportaffirmation

Securities
companies

Notice of trade reportaffirmation status

SSI

Trust banks

Settlement
matching

Notice of matching status

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
1,544

1,503
1,327

1,500

1,314

1,457

1,364
1,196

1,217

6

7

1,134

1,173

8

9

1,551
1,339

1,239

1,253

12

2011. 1

1,342

1,000
500
0

(FY)

2008

2009

2010

2010. 4

5

10

11

2

3

Note: Total number of inputs of contract-type matching data and PSMS data relayed by users and number of transactions of data (outputs) reported tousers as a result of matching processes.

Japan Securities Depository Center, Inc. Annual Report 201133

Custody Services
for Foreign Stock
Certificates, etc.

346Business Overview 6 — Custody Services for Foreign Stock Certificates, etc.

Offering safe and secure settlement infrastructure andservices for foreign stocks
In April 2006, JASDEC inaugurated services to processorganizations calculate the amount of dividends, which aredeposits, transfers and corporate actions for foreign stock

then paid directly to the beneficial shareholders from thecertificates, etc. listed on Japanese stock exchanges.

dividend-paying banks.

Although foreign stock certificates, etc. are generally

JASDEC also undertakes the necessary procedures regard-

deposited with CSDs or custodians in the countries where theing dividend taxation for local tax authorities and other such

issuing companies are located, settlements of transactions atentities, to ensure reduced tax rates under tax treaties withJapanese stock exchanges are conducted through book-entry

the countries concerned. Voting rights at general meetings oftransfers in JASDEC.

shareholders can also be exercised by beneficial shareholders

JASDEC entrusts dividend payments to relevant

through instructions issued to JASDEC.

share-handling service agents. Information on beneficial

JASDEC therefore provides the infrastructure and ser-shareholders at the record date for dividend is transferred

vices necessary for reliable settlement of trading activities

to the share-handling service organizations by the JASDEC

in foreign stock certificates, etc., smooth exercise of share-

participants through JASDEC.

holder rights, and error-free receipt of dividends and other

Based on this information, the share-handling service

payments.

Overview of the system relating to foreign stocks
Overseas CSDs
Share-handling service agents (trust banks)

Notice ofbeneficial
shareholders

Shareholder notice host

Beneficial
shareholder
reportDividend
information

Custodian banks

Stockexchange
DVP

Dividend
information(handling of information concerning beneficial
shareholders, dividends etc.)

Collateralmatching

Japan Securities Clearing Corporation

Notice ofbalance

Account transfer host(settlement)

Standard
non-DVP
transfer

Standard
DVP
transfer

Communication
server with foreign
CSDs/banks

Localcustody/transfer

AMIs (Securities companies and banks)
Beneficial shareholders of foreign stock certificates, etc.

Japan Securities Depository Center, Inc. Annual Report 201135

Handling responses to various forms of corporate action
Foreign companies have carried out a variety of corporateof timely processing of deposits and deliveries; developing

actions in recent years. For example, in January 2011,

systems to exchange information with JASDEC participantsAmerican International Group, Inc. distributed a dividend of

in a faster, more accurate and safer way; and looking into

warrants to its shareholders.

ways to handle various new products listed on Japanese stock
exchanges.

In order for shareholders to be able to exercise their rights
over the warrants they received, the issuing company had to

At present, Depository and Book-entry Transfer System

submit the necessary documents in Japan as well, including

for Foreign Stock Certificates, etc. includes five categories:

a securities registration statement, and so this was the firstforeign stocks (including ADRs); overseas ETFs (includingtime for JASDEC to handle warrants that were not listed on

ETCs); country funds; foreign covered warrants; and foreign

Japanese stock exchanges.

share option certificates. At the end of March 2011, thenumber of different issues handled by JASDEC in the four

Moreover, at the shareholders’ request, we acted as an agent

categories of foreign stocks, overseas ETFs, country funds,

for the exercise of the warrants, for a specific period of time.

and foreign share option certificates stood at 41, while the

JASDEC is taking steps to improve services offered tonumber of foreign covered warrants handled stood at 65.

beneficial shareholders and JASDEC participants, throughmeasures that include: modifying systems for the purpose

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)(Thousand shares)(Issues)

200,000

42

150,000

130,692

100,000

25

42

41

42

42

42

41

40

40

40

40

39

39

41

50
40

79,53189,90582,591

86,55787,60081,584

82,77982,70583,943

83,58881,87686,24986,18089,90530
20

50,000100 (FY) 2008

2009

2010

2010.4

5

6

7

8

9

10

11

12

2011.12

30Foreign covered warrants – number of issues/balance in accounts
Balance in accounts (end of month)(Thousand warrants)

400,000

Number of issues (end of month)(Issues)371,300

125

106

100,000
65
102,000

80,00010,000036

76,36026(FY) 2008

2009

2010

6,000
6,000
12

6,000

6,000

6,000

6,000

4

4

4

4

2010.4

5

Japan Securities Depository Center, Inc. Annual Report 2011

6

7

8

76,36076,36076,36065

65

6576,360 100
65

3,700

6,000
4

19

15

9

10

11

75
50
25

12

2011.12

30

Business Overview 6 — Custody Services for Foreign Stock Certificates, etc.

Number of shares deposited/withdrawn
Number of shares deposited
Number of shares withdrawn
480,307(Thousand shares)

500,000

246,465

118,585

115,478

91,632100,000

73,87970,000

7,362

8,000

6,522
5,207

4,692

4,000

2,337

(FY)

2009

2010

2010.4

5,710

4,775

830

0

7,431

6,052

5

1,324

1,940
769
745

507

6

7

8

884

9

2,934

2,249
1,010

10

11

2,071

1,686

1,517

12

2011.1

2

3

Book-entry transfers
Non-exchange transaction deliveries
Exchange transaction transfers(Thousand shares)

469,524500,000

274,120
258,701

300,000

158,574
40,24440,00037,68023,46427,08630,00023,942

17,014
18,22720,00017,257

15,965
11,1108,712
8,483

11,25810,000
0

(FY)

2009

2010

2010.4

5

6

7

8

9

16,62012,428

10,8446,671

10

15,676
11,536

8,434

11

12

11,531

2011.1

24,332

24,864
13,897

2

3

Japan Securities Depository Center, Inc. Annual Report 201137

International
Relationships
Contributing to the development of the global securities
markets
In response to ongoing internationalization in the securities settlement sector, JASDEC actively participates ininternational forums such as regular CSD meetings andseminars, helping ensure the timely exchange of securities market infrastructure-related information on a global
basis.
In the Asia-Pacific CSD group (ACG), Chairman
Takeuchi became the first chairperson, and JASDEC
became the Secretariat of a newly established executive
committee (with a three-year term) that plans and executes the various activities of the ACG from a mediumterm perspective. Moreover, at the 11th Conference of
CSDs (CSD11) the establishment of the World Forum of
CSDs (WFC) was approved, and Chairman Takeuchi wassworn in as its vice-chairman.
As one element of our efforts to build collaborative
relationships with CSDs around the world, JASDEC has
been following a policy of signing MOUs on the exchange
of information and the undertaking of collaborative projects with overseas CSDs. As of the end of March 2011,
JASDEC had signed MOUs with a total of 12 CSDs. We
have also launched regular discussions with current cooperative partners, and made other efforts to strengthen
collaborative projects with CSDs of emerging nations.
While supporting the rapidly growing Asian markets
overall, we aim to contribute to the development of theJapanese securities market by strengthening cooperative
relations around the globe.

38

Business Overview — International Relationships◆ Major International Activities in FY2010

2010① April 16, 2010

② May 25-27, 2010

In an effort to strengthen relationships with MOU cooperative
partners, JASDEC held its 2nd regular consultative meeting with
KSD (Korea Securities Depository) in Seoul, Korea.

Under an MOU signed in April 2009, JASDEC visited theMongolian Securities Clearing House & Central Depository(MSCH&CD), and provided technical support relating to thedevelopment of its IT systems.

2nd regular consultative meeting held with
Korea’s KSD under MOU

April

①

Providing Support to Mongolia’s MSCH&CD③ June 1-4, 2010May

CSD Contact Group meeting
②

June

③

JASDEC participated in the CSD Contact Group (liaison meeting for CSD groups in five regions around the world) held in Zurich,
Switzerland, to discuss challenges that CSD groups around the world should collaborate on.

④ August 23-27, 2010

Seminar held for Mongolian authorities and government officials
Upon a request from Mongolia’s MSCH&CD, an MOU cooperative partner,
JASDEC held a seminar for Mongolian authorities and government officials in
Ulaanbaatar, Mongolia. During the three-day seminar JASDEC gave an overview
of Japan’s securities clearing and settlement laws, and respective managers
explained information security management, cross-border transactions, meetinginternational standards, domestic listing and settlement of foreign stocks and JDRs.

July

August④
September⑤⑥⑤ September 6, 2010

⑦ October 24-28, 2010

In September 2010 we held our third regular meeting with KSD
in Tokyo, exchanging useful information at both the management and operational levels.

JASDEC participated as a panelist at Sibos 2010 held in
Amsterdam, the Netherlands, and explained the characteristics
of corporate actions in Japan and other Asian countries. At the
CSD Contact Group meeting held in conjunction with Sibos 2010,
CSD groups from five regions around the world held discussions
about challenges that CSD groups should collaborate on.

3rd regular consultative meeting held with
Korea’s KSD under MOU⑥ September 15-17, 2010

Sibos 2010/CSD Contact Group meeting

12th ACG Cross Training Seminar
October⑦
November

The 12th ACG (Asia Pacific CSD Group) Cross Training Seminar
for ACG members was held in Shanghai, China, hosted by the
China Securities Depository and Clearing Corporation Limited(SD&C). At the JASDEC-led Information Exchange Task Force,
we shared opinions on the challenges pertaining to the gatheringand distribution of corporate action information as well as initiatives to facilitate smooth cross border settlement. At the Legal
Task Force session, JASDEC hosted a presentation on problems
arising from the adoption of applicable laws for cross-bordertransactions.

December⑧

2011⑧ December 2-3, 2010

The 14th ACG General Meeting
The 14th General Meeting of the ACG was held in Mumbai,
India, hosted by the National Securities Depository Limited(NSDL). As the convenor of the working committee discussing
the structural reorganization of the ACG, JASDEC compiled alist of change proposals, and at the General Meeting, members
approved the establishment of an executive committee to planand execute the various activities of the ACG from a mediumterm perspective. The new executive committee is made up ofseven representative organizations; Chairman Takeuchi became
the first chairperson, and JASDEC became the Secretariat of thecommittee. JASDEC was also reelected as the convenor of theInformation Exchange Task Force, with a three-year term.

January

February⑨ April 13-15, 2011

March

11th Conference of CSDs

April

⑨

The 11th Conference of CSDs was held in Cape Town, South Africa, hosted by AMEDA (Africa andMiddle East Depositories Association). JASDEC presented on the theme of “collaboration between
CSDs”, showing how CSDs and CCPs exchange information in the Asia-Pacific region, and introducing
ABMI, ASEAN Trading Link and other such initiatives being undertaken to build links within Asianmarkets. Chairman Takeuchi was a panelist in the final session, “What’s next? Chairpersons and CEOs
reflect on the future of financial markets infrastructure and the effect on CSDs”, and outlined merits anddemerits with respect to risk management brought about by factors such as the standardization of various CSD operations, the centralization of information, and different shareholder and company structures.
The conference also ratified the establishment of the World Forum of CSDs to replace the CSD
Contact Group meetings that had been held irregularly over the past four years. Mr. Mohamed Abdel
Salam of Misr for Central Clearing, Depository & Registry (MCDR), Egypt, representing AMEDA,
became the first Chairman of the Forum. Chairman Takeuchi of JASDEC was selected as its ViceChairman, with JASDEC becoming the forum’s secretariat.

Japan Securities Depository Center, Inc. Annual Report 201139

Asian Bond Markets Initiative (ABMI)◆ Background
The Asian Bond Markets Initiative (ABMI) was adopted by

The financial authorities of the countries participating in

the ASEAN+3 (ASEAN plus China, Japan and Korea) Financethe ABMI have been endeavoring to develop bond markets

Ministers’ Meeting as a measure to tackle the 1997 Asian

within the region to enhance financial intermediary functions

financial crisis. Asian countries have been facing common

and allow savings to be used for investment in the region.

difficulties in the fund procurement required for medium- to

The successful procurement of funds for long-term invest-

long-term investments within the region.

ments in the region would significantly reduce currency andAlthough savings rates are high in the region, capitalmaturity mismatches in regional financing. Under the super-markets are not yet fully developed. In these circumstances,vision of the Finance Ministries and the Central Banks of thethe region had depended heavily on Western financial

ASEAN+3 countries, four Task Forces have been establishedinstitutions for foreign currency-denominated short-termwith the common goal of furthering the development ofborrowings for long-term investments. This caused maturity

well-functioning bond markets with sufficient liquidity inand currency mismatches in financing, which were primary

the region.

factors in generating the Asian financial crisis.

◆ JASDEC involvement in ABMIJASDEC has been taking part (as a representative of Japan) in

In September 2010, Task Force 3 (whose responsibility is

the Group of Experts (GoE), which was established in April

to improve the regulatory framework) established the ABMF

2008 by Task Force 4 (whose responsibility is to improve the(the ASEAN+3 Bond Market Forum) to carry on the work ofbond market infrastructure) to discuss key issues related to

the GoE. JASDEC has participated in ABMF as the Japanesecross-border bond transaction and settlement systems.

representative, and is actively participating in Sub-Forum 2(the study group) as the Co-Vice Chair.

40

Japan Securities Depository Center, Inc. Annual Report 2011

Business Overview — International Relationships◆ JASDEC activities in the ABMF
The ABMF, set up with the objectives of conducting studies toincluded the CSDs in each country, the practice of the global

standardize market practices concerning cross-border bondcustodian in transactions settled across borders, and custo-

transactions in the ASEAN region and to harmonize regula-dial practices for settlements in one’s own country.

tions within the region, began its work with two sub-forums

In our work to promote “Identifying cross-border settle-

held at its inaugural meeting at Tokyo in September 2010.

ment operations,” there are plans to prepare a flow chart

These were: Sub-forum 1, whose main agenda is “Identifying

integrating the bond settlement procedures in each of theregulatory barriers related to bond transactions in general”

countries and to visit those countries in the Asian region to

and Sub-forum 2, whose agenda is “Identifying cross-border

deepen understanding. Further discussions will be held in thesettlement operations.” As a Japanese representative in Sub-months ahead, with the aim of completing the final report byforum 2, JASDEC is actively contributing to the debate held

the end of the year.

at three forum meetings where the topics discussed have[Positioning of ASEAN+3 Bond Market Forum (ABMF)]
ASEAN+3 (ASEAN plus Japan, Korea and China)
Finance Ministers’ Meeting

Task Force 1

Task Force 2

Task Force 3

Task Force 4

Promoting the Issuance ofLocal-Currency-Denominated Bonds
Chaired by Thailand/China

Facilitating the Demand for
Local-Currency-Denominated Bonds
Chaired by Singapore/Japan

Improving
the Regulatory Framework
Chaired by Malaysia/Japan

Improving the Related Infrastructure
for the Bond Markets
Chaired by Philippines/Korea

ASEAN+3 Bond Market Forum (ABMF)
Sub-Forum 1

Sub-Forum 2

Chair: Japan, Vice-Chair: Malaysia

Chair: Korea (KSD), Vice-Chairs: Japan (JASDEC), Indonesia (KSEI)

AgendasSub-Forum 1 (Comprised of self-regulatory organizations, etc.)
Sub-Forum 2 (Comprised of working-level staff of CSDs, etc.)

Technical Working
Group (TWG)

Identifying regulatory barriers related to bond transactions in general
Identifying cross-border settlement operations (standardization of message format, etc.)* Establishment of ABMF was approved at the ASEAN+3 Finance Ministers’ Meeting held in May 2010.

Japan Securities Depository Center, Inc. Annual Report 201141