JAPAN SECURITIES DEPOSITORY CENTER, INC.
ANNUAL REPORT 2002

OUR MISSION
The Japan Securities Depository Center (JASDEC) was established in
December 1984 as a non-profit foundation pursuant to the Law Concerning Central Securities Depository and Book-Entry Transfer of Stock
Certificates and Other Securities (CSD Law), formulated in May thatyear. JASDEC commenced business operations in October 1991 as
Japan’s sole central securities depository and have greatly contributed
to the development and infiltration of securities depository and bookentry transfer system in Japan.
In June 2002, in compliance with the amended CSD Law, effective April 2002, all businesses of JASDEC were transferred to the Japan Securities Depository Center, Inc. (JASDEC Inc.), incorporated in
January 2002. JASDEC Inc. will further contribute to develop securities depository and book-entry transfer system nationwide and provide
smooth, effective and low-cost securities settlement system, improvethe efficiency of the functions of the financial market and endeavor tofurther develop the national economy by enhancing the international
competitiveness of the financial market in Japan.

Contents
Financial Highlights
President’s Message
Feature 1:
Reform of the Securities Clearing and Settlement System
Pre-Settlement Matching System
Feature 2:
Commercial Papers
Delivery versus Payment
Review of Operations
Board of Directors and Auditors
Organization Structure
Financial Statements
List of Participants / Shareholders
History
Corporate Information

1
2
7
7
11
12
14
22
25
26
30
32
33

Japan Securities Depository Center, Inc.

ANUUAL REPORT 2002

FINANCIAL HIGHLIGHTS (JASDEC)

Years ended March 31, 2002 and 2001
Thousands ofYen

Thousands of
U.S.dollars

2002

For the year:
Gross Revenue (before refund)
Income from Fees (before refund):Deposits
Book-Entry Delivery
Withdrawals
Custody
Refund of Fees

2001

2002

¥ 17,454,716 ¥ 14,134,370$ 130,992

504,480
8,990,297
150,532
5,184,338

446,205
6,102,618
143,259
5,681,481

3,785
67,4691,130
38,907(5,810,146)(3,235,322)(43,603)

Total Revenue (after refund)Total Expenditure
Net Income (Loss)¥ 11,644,570 ¥ 10,899,048¥ 11,415,912 ¥ 10,975,991¥0¥(76,943)$$$

87,38985,6730

At Year End:
Total Assets
Total Net Assets¥ 15,826,023 ¥ 14,532,813
3,957,000
3,957,000$ 118,769
29,696

U.S. dollar amounts have been translated, for convenience only, at the rate of ¥133.25=US$1 as of March 31, 2002.

TOTAL REVENUENET INCOME (LOSS)TOTAL NET ASSETS(Millions of yen)

(Millions of yen)

(Millions of yen)

3,000

12,500

5,000

2,500
10,000

4,000

2,000
7,500

3,000
1,500

5,000

2,000
1,000

500

2,500

1,000

0
0

0
1998 1999 2000 2001 2002

1998 1999 2000 2001 2002

1998 1999 2000 2001 20021

Japan Securities Depository Center, Inc.

PRESIDENT’S MESSAGE

Overview
On June 17, 2002, the newly established the Japan Securities Depository Center, Inc. (JASDEC
Inc.) took over all the businesses of Japan Securities Depository Center and started the operations
on the same day. This resulted in a change of corporate governance and we intend to operate thebusinesses that meet and respond to the needs and requests of users appropriately and promptly
and to increase of efficiency of the business management.
Looking back to fiscal 2001, great strides were made in the reform of securities settlement andclearing system in Japan. That year, we decided to change our corporate structure from a foundation to a stock corporation after ten years of operation as the Japan Securities Depository Center. In
June 2001, the Law Concerning Book-Entry Transfer for Short-Term Corporate Bonds was formulated, and the CSD Law was amended to change the legal status of the central security depository.
In the wake of these legislative transformations, we have been pursuing appropriate measures
to provide user-friendly securities settlement and clearing infrastructure and to strengthen thefunctions and security of the system.

Promoting the Greater Use of Depository Services
As of March 31, 2002, the number of shares in our custody reached 191.5 billion shares, or 53.5%of the total number of shares outstanding in Japan. With the custody balance of more than 50% of
the outstanding shares, a long time target, we have been successfully reducing the cost of users,
which encouraged more usage of our services by users.
In terms of public acceptance and infiltration of the depository services in Japan, however, we
still lag behind some other countries where securities depository system have fully been developed
and accepted. We intend to further reduce the users’ cost to increase the amount of securities incustody by maintaining our promotion activities to individual investors as well as institutional investors through the newspapers, broadcasting and other media.

ANUUAL REPORT 2002

2
3

Reforming Securities Settlement System
It is a fundamental requirement to execute the delivery of securities and the payment of funds
securely. In this respect, a delivery versus payment (DVP) system is one of the most importantmeans to reduce the risks involved with settlement of securities transactions. We are now preparing
to implement a DVP system for the settlement of non-exchange transaction deliveries. It is now
scheduled to be implemented by the end of fiscal 2003, and we will facilitate our preparations
including delineation of details of operational processing, setting up of our clearing subsidiary anddevelopment of necessary computer systems.
Demand to eliminate manual operations relating to securities transactions and to automate theentire process of the settlement of securities transactions has been growing stronger over the years.
Introduction of an electronic straight-through processing (STP) is the key component for eliminating risks in manual operations and trimming the operational costs. Implementation of pre-settlement matching system (PSMS) is a step to introduce STP and PSMS has long been sought by theconcerned parties who wish to automatically match the details of the large volume and value of
trades by institutional investors.
In September 2001, after the two years of discussion and system development started in 1999,
we launched the pre-settlement matching system, the 1st phase of the 1st stage for stock transactions by domestic institutional investors. Then, in February 2002, the 2nd phase of the 1st stage
was implemented to include convertible bonds and other types of trades such as initial offerings,
secondary offerings and the trades by non-resident. As PSMS is regarded as an important infrastructure to introduce STP as well as DVP in the future and to shorten the settlement cycles, we will
be promoting and encouraging the market players to participate and further use PSMS.
In November 2001, we started to handle convertible bonds after the years of discussion. As of
March 31, 2002, we held the convertible bonds with volume of ¥8,085.1 billion in our custody,
which represented 88.8% of all convertible bonds in the market.
Furthermore, we started to handle the listed real estate investment trusts (REITs) and exchange
traded funds (ETFs) when the stock exchanges introduced these securities in the market.

Responding to the strong requests from participants and issuers to expand the types of eligible
securities to our operations, we have been discussing since January 2002 the operational procedures and the necessary system developments to initiate business operations for commercial papers (CPs) by the end of fiscal 2002. The implementation of the book-entry transfer system for CPs
in dematerialized form is backed by the Law Concerning Book-Entry Transfer for Short-Term Corporate Bonds, which was formulated in June 2001.
As a next step, we have started to study the handling of corporate straight bonds and investment trust beneficiary securities both in dematerialized form.

Reducing Settlement Risks
When stock exchanges launched the DVP settlement system in May 2001, we upgraded the CPUs
with the anticipation that relatively large part of the night batch processing of the book-entry transfers relating to the stock exchange trades would be largely shifted to the book-entry transfers on thesettlement date on a real time basis. Additionally, we introduced storage facilities in May 2002 to
greatly increase the operational capability to handle beneficial stockholder notification services.
Meanwhile, taking heed of the September 11th terrorist attacks in the U.S., we distributed toour participants the papers specifying the practical measures we will take in case of emergency. In
April 2001, we conducted a training program based on the assumption that a disaster had occurredin Tokyo, and other training programs in February and March 2002, which were based on the
scenario of a massive and long-time network failure resulting from system breakdown caused by thesystem software. More than 80 percent of our participants participated in those programs, attesting
to their deep concern for risk management.
Furthermore, we have reviewed our security policy to strengthen the security of our overallbusiness operations.

Reducing User Expenses
The number of shares in our custody has increased beyond our initial expectations. This enabled us
to reduce custody fees twice in fiscal 2001. Also, we substantially discounted the transfer fees anddepository fees for larger volumes, thereby alleviating users’ financial burdens.
As more income was expected due to the continuing business expansion during the fiscal year,
we rebated operational fees again this year. This resulted in a significant decline in our averagecustody fee rate after the rebate. We also introduced a declining fee schedule for large volumes for
ETFs, the exchange traded funds.
At the beginning of fiscal 2002, we further reduced custody fees and extended additional scalein the declining fee schedule.

ANUUAL REPORT 2002

4
5

Responding to Globalization
Cross-border transactions in securities have been rapidly increasing following financial liberalization worldwide and technical innovations in the telecommunication and IT industries. Meanwhile,“Black Monday”, market crash in 1987 highlighted the importance of risk management in securities settlement and improvement of efficiency of the settlement operations. Responding to theurgent needs of the market, global standards were proposed and well accepted to streamline securities settlement operations in each country. Some part of the securities settlement system in Japanis not fully in compliance with the global standards and there are more than few standing blocks toovercome. We are striving to provide satisfactory solutions to create our own securities settlement
system that is fully in conformity with the global standards.

Shortening Settlement Cycles
At present, the securities transactions on the stock exchanges in Japan are settled on the third
business day from the trade date, on T+3. Settlement on T+3 is now the global standards and somecountries are trying to shorten the settlement cycles, T+2 or T+1. In order to create safe, convenient and globally competitive securities market, we are exerting our efforts to improve the infrastructure for the settlement of securities transactions, paving the way toward the shorter settlement
cycles.
Summing up our business operations and strategies in fiscal 2001, we pledge to continue an
in-depth study to meet the needs and requests from user participants and user customers by adding
greater value to our securities depository system and by increasing the functions with the determination to accomplish the reform of the securities settlement and clearing system in Japan.
June 2002

Yoshinobu Takeuchi
President & CEOJapan Securities Depository Center, Inc.

FEATURE1

ANUUAL REPORT 2002

6
7

F EAT U R E 1

Expansion of services
Reform of the Securities Clearing and Settlement System
In fiscal 2001, great progress was made for the reform of securities settlement system in Japan,
following the report in June 2000 by the First Subcommittee of the Financial System Council,
entitled “Reformation Plans of Securities Settlement Systems in the 21st Century.” Based on thereport, discussion on the legal framework of securities system in the paperless environment waspreceded effectively.
In June 2001, the Law Concerning Book-Entry Transfer for Short-Term Corporate Bonds wasformulated for the issuance of commercial papers in a dematerialized form, and the Law Concerning Central Securities Depository and Book-Entry Transfer of Stock Certificates and Other Securities
was amended to change the legal status of a central securities depository into a corporation.
Furthermore, the unified legislation of the issuance of corporate bonds, government bonds andbeneficial certificates of investment trust, while the Registration Act for Corporate Bonds is to beterminated, was discussed, and the Law Concerning Book-Entry Transfer for Corporate Bonds wasenacted in June 2002 by amending the Law Concerning Book-Entry Transfer for Short-Term Corporate Bonds. Along with this legislation, a clearing organization for securities transactions was legallydefined in the Securities and Exchange Law.
Consequently, all the necessary legislations have been completed to issue all marketable securities on a book entry basis, including stock certificates. Issuance of stock certificates in a dematerialized form is under discussion for legislation in the future.

Pre-Settlement Matching System
JASDEC has started the discussion on the implementation of the Pre-Settlement Matching Systemsince the establishment of the Pre-Settlement Matching System Task Force in July 1999, and has
effectively preceded the discussion and necessary system development. The 1st phase of 1st stageof PSMS for stock transactions by domestic institutional investors became operational in September 2001.
Subsequently in February 2002, PSMS was expanded to include convertible bonds and othertypes of trades such as initial offerings and secondary offerings as well as the trades by nonresident, when the 2nd phase of the 1st stage was implemented.

Japan Securities Depository Center, Inc.

F EAT U R E 1

Concept of Pre-Settlement Matching System
1) STP for the Securities Settlement Environment Typical in JapanAs long as the institutional transactions are concerned, it is quite common that the institutions that
perform investments and the institutions that perform settlement are different entities not only inJapan but also in other countries. However, typical in Japan is that trust banks retain the rights andobligations for the confirmation of the investment. For this reason, PSMS was developed to realize
the straight-through processing (STP) suitable to the specifics of the securities settlement environment in Japan.

2) Establishment of Japanese Standards in Conformity with Global Standards
Securities markets have been globalized so quickly. Until recently, securities settlement systems
used to be constructed on the vernacular architecture of data syntax and codes, which can be onlyused in the domestic market, but settlement systems must be created in the future that incorporate
the factor of connectivity to overseas counterparts. To achieve this, PSMS was developed based on
ISO 15022 for data syntax, BIC for user and financial institution identification codes, and ISIN for
securities identification codes.
POST-TRADE PROCESS FOR NON-RESIDENTS’ TRANSACTIONS>> Overseas
Order
Order

Notice of
Execution

Investment
Manager

Allocation

Order

Broker/DealerConfirmation

Client(PensionFund, etc)

Notice of Execution

Stock
Exchange

Settlement
Instruction

Affirmation

Notice of
Execution

Broker/DealerSettlement Instruction

GlobalCustodianSettlement
Instruction

SubCustodian

PreSettlement
Matching

Settlement

Settlement>> TokyoANUUAL REPORT 2002

893) Matching on Trade Date (T+0 Matching)
While PSMS was implemented under the T+3 environment, this aims to complete the matching of
the trades on the trade date, T+0, to keep pace with the movement of securities industry to shorter
settlement cycle, T+1.
We believe that completion of trade matching on T+0 will help increase the convenience for theinvestment trust management services. To be precise, open-end investment trust is required to
calculate and announce the Net Asset Value (NAV) every day, which should be done accurately andpromptly. The PSMS provides facilities to match the investment instruction data sent by investment trust companies and trade report data sent by securities companies on a real time basis, andthen sends matched data to trust banks. This enables trust banks to smoothly and accurately
calculate the NAV and match such NAV calculated by investment trust companies more quickly andaccurately.

4) Connecting to DVP System
The discussion to implement a delivery versus payment settlement system for the trades other than
the stock exchange transactions is now underway. When the DVP settlement system is implemented,
the matched settlement instruction data in PSMS will automatically be sent to DVP settlement
system, thereby completing the settlement process without any manual interventions.

5) Digitization and Dematerialization
Digitization of trade data and dematerialization or immobilization of securities is the prerequisite
for bringing STP into operation. As a practical step for this development, an amendment to theOrdinance of the Cabinet Office was issued on October 1, 2001, which allows securities companies
to send trade reports to their customers in the electronic or magnetic form through PSMS with thecondition of agreement of customers.

Expansion of PSMS
The 3rd phase of 1st stage of PSMS has been under development, so as to include the futures,
options, government bonds and NAV for investment trusts, which is expected to be in operation inspring 2003.

Japan Securities Depository Center, Inc.

FEATURE2

ANUUAL REPORT 2002

10
11

F EAT U R E 2

New businesses under development
Commercial Papers
The Law Concerning Book-Entry Transfer for Short-Term Corporate Bonds was formulated in June
2001 to respond to growing industry-wide requests for the creation of book-entry transfer system forshort-term corporate bonds, namely commercial papers (CPs), in dematerialized form in Japan.
Following this legislation, the Committee for Reform of the Securities Clearing and Settlement
System of the Japan Securities Dealers Association (JSDA) studied the feasibility of DVP settlement
for CPs at the request of the Japan Business Federation (former Keidanren). JSDA asked JASDEC in
December 2001 to study for achieving a Gross-Gross Type DVP system for CPs.
Responding to the participants’ requests in the market, JASDEC set up the CP Working Group
under the Committee for New Projects in January 2002 and started discussions to implement thesystem requested. In March 2002, JASDEC drew up the outline of book-entry transfer system for
CPs and are now undertaking to draw up the operational scheme and develop the computer systems
necessary to launch the system in 2003.
Two major characteristics have to be highlighted concerning the book-entry transfer system of
CPs: realizing book-entry transfers in dematerialized form and implementing a Gross-Gross TypeDVP system.
First, in this system, physical papers are not issued from issuance through redemption, and theright of the CP holders is recorded and transferred between the accounts of securities companies orbanks opened at JASDEC. Investors, therefore, are required to open an account at such entities,
while issuers are requested to provide JASDEC with a summary of the issuance and the names of
the underwriters.
Second, a book-entry transfer of CPs at JASDEC can be connected with cash settlement at the
Bank of Japan to achieve the settlement of CP trades on a DVP basis. Specifically, JASDEC temporarily records the amount of CPs to be delivered on the memorandum ledger until receiving thenotice of fund transfer from the Bank of Japan, then, executes the book-entry transfer of suchamount from the deliverer’s account to the receiver’s account.

Japan Securities Depository Center, Inc.

F EAT U R E 2

Delivery versus Payment
Delivery versus Payment (DVP), a system for ensuring performance of security deliveries and fund payments,
is essential for reducing settlement risks as well as promoting STP. JASDEC is working on an introduction of a
DVP settlement system for non-exchange transaction deliveries, which are the significant part of the bookentry deliveries at JASDEC.
We plan to introduce a “Gross-Net” scheme. Each book-entry delivery of securities will be processed on a
trade-for-trade (gross) basis while payment of fund will be made on a net basis. The basic framework of ourplan is modeled after the DVP system used by the Depository Trust & Clearing Corporation (DTCC) in the
United States. We aim to build a risk management system that can compare to the best practices in the world.
The DVP system will be run by a JASDEC subsidiary (clearing organization). Under the system, the subsidiary will be the central counterparty for both deliverer and receiver through novation. If a DVP instruction
satisfies all the conditions for executing DVP (executing conditions), securities subject to the delivery aredelivered from the deliverer’s account to the subsidiary’s account. For each participant, all the payable amounts
for receipts of securities and all the receivable amounts for deliveries of securities will be offset and theremaining balance will be paid to or received from the subsidiary. Securities to be received shall be deliveredfrom the subsidiary’s account to the receiver’s account if the receiver fulfilled the payment.
In case a DVP participant fails to make payment, the shortage of fund will be covered by the participant
fund and borrowing from banks to minimize the systemic risk. To limit the size of such a default and to recover
the fund applied to make up the default, net-debit cap and assurance asset will be set for each DVP participant.
The DVP system will be implemented by the end of March 2004. We are making efforts to implement thesystem as soon as possible by further discussing on the details of the scheme and taking the development ofcomputer system into account.

ANUUAL REPORT 2002

DVP SYSTEM FOR NON- EXCHANGE
TRANSACTION DELIVERIES
Gross-Net Type>> Security Deliveries

JASDEC
Participant A

3

3

2

2

JASDEC
Subsidiary

Participant B
557Participant C

Participant X

7Participant Y

Participant Z

Netting calculation for fund settlement
Transfer of data to BOJ>> Fund Payments
Participant C

Participant A

7

3

C’s
Account

Netting
result6

Settling
Bank D

6

Settling
Bank D
X’s
Account2

Settling
Bank E

Settling
Bank E

Subsidiary

Participant
B

3

A’s
Account

7

Participant
Z

1

Y’s
Account

5

Bank of Japan
Participant X

Participant Y*Approval of subsidiary’s account at BOJ by BOJ is necessary.

Netting
result2

1213

Japan Securities Depository Center, Inc.

REVIEW OF OPERATIONSParticipants and Accounts
The securities depository and book-entry transfer system involves JASDEC, its participants, participants’ customers and issuing companies.
Entities eligible to become JASDEC participants are stipulated by the CSD Law, and include
securities companies, banks, trust banks, insurance companies, securities finance companies,
stock exchanges and the Japan Securities Dealers Association (JSDA). Investors use the system via
customer accounts opened on their behalf by participants. Participants may open up to 99 subaccounts with JASDEC.
As of March 31, 2002, 290 participants held 477 accounts with JASDEC, representing lossesof 6 in the number of participants and gains of 24 in the number of accounts opened, comparedwith fiscal 2000.

Issuing Companies
Participating to JASDEC system is voluntary, and JASDEC is, therefore, required to have consent of
issuing companies to handle their shares at JASDEC.
As of March 31, 2002, 3,610 issuers of public companies in Japan have consented, up 112
companies from the previous year.

Participants by Category
3

11

8

48

220

Securities companies

220 (75.9%)

Banks

48 (16.5%)

Life and non-life insurance companies

8(2.8%)

Securities finance companies

3(1.0%)

Stock exchanges, etc.

11(3.8%)Total

290 (100%)ANUUAL REPORT 2002

14
15

Deposits and Withdrawals
Participants may deposit their own shares and those of their customers (with their consent) withJASDEC. Customers may only deposit shares with JASDEC indirectly through a participant.
Deposited share certificates are taken into custody and records of all deposits are entered in theparticipant accounts at JASDEC as well as in the accounts set up for customers by participants. The
deposit of shares is entirely voluntary, and participants and customers may withdraw those sharesat any time. Like deposit requests, customers’ withdrawal requests must be filed through a participant.
In fiscal 2001, a total of 56,215 million shares were deposited, an increase of 8,890 million
shares, or 18.8% from the previous year. Shares withdrawn totaled 21,727 million, a year-on-yearincrease of 1,702 million shares, or 8.5 % from the previous year.

De p o s its a n d Withdraw als(Millions of shares)

Withdrawal ratio

60,000

Deposits

50,000Withdrawals

54.0%
46.5%

40,000

40.0%

42.3%
38.6%

30,00020,00010,000
0

1998

1999

2000

2001

2002

Japan Securities Depository Center, Inc.

REVIEW OF OPERATIONSJASDEC
Account of participant A
Own shares

Customer's shares+100,000 shares+3,000 shares–1,000 shares

Deposit ofown 100,000
shares

Deposit ofcustomer’s
3,000 shares

Request forwithdrawalof customer's
sharesWithdrawal ofcertificate for
1,000 shares tocustomer

Securities Company A

Own shares

Customer aaccount

Customer b
account+1,000+2,000

Deposit of
1,000 shares–1,000
Request forwithdrawal ofshares

Deposit of
2,000 shares

Customer a

Custody

Customer caccount

Customer b

Withdrawal ofcertificate for
1,000 shares

Customer cShares deposited by participants are stored collectively by JASDEC and are not segregated byparticipant or by customer. In accordance with the CSD Law, participants and their customers arelegally regarded as having co-ownership of the shares in the proportions stated in their JASDEC
accounts or participant accounts, respectively.
The re-registration of share certificates in the name of JASDEC is nominal, and JASDEC’s rights
are limited to conducting administrative procedures. Shareholder’s rights, such as the right to claim
dividends and residual assets, vote, and request the resignation of directors or auditors, rest withthe beneficial shareholders (see the section on Beneficial Shareholder Notification).
Although deposited shares are kept collectively by JASDEC, JASDEC provides separate accounting for shares owned by participating firms (own shares) and their customers (shares received
from customers for safekeeping). This provides legal protection for the shares held on behalf ofcustomers in the event of bankruptcy by a participant.
As of March 31, 2002, shares held in custody totaled 191,562 million shares, increased
34,488 million shares, or 22.0 % from the previous year. Ratio of shares held in custody to shares
outstanding increased 11.2 %, to 53.5 %, topped 50% mark in February, our long-time numeral
target. Compared with other major countries where securities depository systems have fully been
accepted, however, there is still room to improve the proportion of shares in custody, and we willfurther try to reduce the cost of operations and to continue wide-ranged promotion activities.

S h a re s in C us tody
(Millions of shares)

Custody ratio

200,000

Shares in custody

150,000
53.5%
42.3%

100,000

34.2%
28.8%
22.5%

50,000

0

1998

1999

2000

2001

2002

ANUUAL REPORT 2002

16
17

Uncertification of Shares
In Japan, shareholders may request issuers to replace their shares in an uncertificated form.
As a nominal shareholder, JASDEC is entitled to request this procedure under the CSD Law. By
exercising this right, JASDEC is able to rationalize administrative procedures and economize on
space, while reducing the risk of losing physical share certificates.
Elimination of physical share certificates also offers advantages for issuing companies. The
cost of issuing new share certificates and administrative costs related to stock splits or changes ofcompany name are reduced.
As of March 31, 2002, JASDEC requested issuing companies to replace 95,557 million shares,
an increase of 21,972 million shares, in uncertificated form, representing 49.9 % of all shares
held in custody with JASDEC, up 3.1 % from the previous year.

Portion of Shares Uncertificated(Millions of shares)

Portion of shares uncertificated100,000

Uncertificated shares
49.9%

80,00046.8%

60,00041.8%

40,00039.7%

20,000
36.2%

0

1998

1999

2000

2001

2002

Japan Securities Depository Center, Inc.

REVIEW OF OPERATIONS

Exchange Trade Transfers and Non-Exchange Trade Transfers
Non-Exchange

Trust Bank
(Buyer)

Securities
Company B

Exchange Trade Transfers

Stock
Exchange

Non-Exchange

Securities
Company A

Bank(Seller)

Trade Transfers

Trade Transfers

Book-Entry Transfer
When a participant or customer trades shares held in custody by JASDEC, or transfers such sharesfor collateral or other purpose, delivery is effected by book entry transfer between accounts. JASDEC
offers two types of book-entry transfers: exchange trade transfers and non-exchange trade transfers.
Exchange trade transfers are transfers of shares between participants as a result of trades
executed on stock exchanges or over-the-counter market. Book-entry transfers for other purposes
are non-exchange trade transfers. Regulations of stock exchanges and JSDA require that trades in
JASDEC-eligible issues executed in their respective markets shall be settled by book-entry transfers
between participant accounts with JASDEC.
The stock exchanges and Jasdaq Market Inc., operator of JASDAQ system established by JSDA,
issue transfer instructions for the settlement of their trades directly to JASDEC. In the case of anon-exchange trade transfer, the seller issues instructions to JASDEC.
Non-exchange trade transfers are most commonly used by institutional investors and non-resident investors, who keep shares in their accounts with custody bank participants.
In order to settle their trades executed on the stock exchanges or in the over-the-counter market, shares are transferred by book-entry between the custody bank participant and the securities
company participant.
In fiscal 2001, exchange trade transfers recorded 239.9 billion shares, up 16.9 % from theprevious year. Non-exchange trade transfers rose 17.2 % to 337.0 billion shares and accounted
58.4 % of aggregate book entry transfers.
The number of exchange trade transfers in fiscal 2001 was 21.5 million, up 40.3%, while thatof non-exchange trade transfers, which generally involve transfers of large amount of shares, was14.6 million, up 12.2%.
Book-Entry Transfers(Millions of shares)

Non-exchange trade transfer ratio

400,000

Exchange trade transfer
58.4%

300,000

57.7%
55.9%
54.7%

200,000
53.4%

100,000

0

1998

1999

2000

2001

2002

Non-exchange trade transfer

ANUUAL REPORT 200218
19

Beneficial Shareholder Notification Flow
Issuing company (Transfer agent)
Registration into
JASDEC’s nameJASDEC

Customer nameBeneficial
Shareholder List

Beneficial
shareholder
notification

Beneficial
shareholder names

Deposit ofsharecertificatesBeneficial Shareholder Notification

Shareholder List

JASDEC’s name

Report ofbeneficial
shareholders
Deposit ofsharecertificatesParticipants(securities company, etc.)

Exerciseof rights

Dividends
and notices

Matching ofshareholders

Exercise of rights
Dividends Transfer
and notices to individual
title

Shareholders(beneficial shareholder)

Shareholders outside
this system

Under the securities custody and book-entry transfer system in Japan, issuers shall be informed of
the names of beneficial shareholders to facilitate the distribution of dividends and any other rights
directly to beneficial shareholders and beneficial shareholders shall exercise their rights directly tothe issuers. Accordingly, JASDEC prepares and provides issuers with beneficial shareholder data.
JASDEC’s beneficial shareholder notification service includes the collection of information on beneficial shareholders as of the record date in accordance with reports from participants, and thenotification of this information to issuers. The issuers draw up beneficial shareholder lists on abasis of this data and send notice of shareholder meetings and other information directly to thebeneficial shareholders. Beneficial shareholders thus receive dividends directly from the issuers,
and exercise their voting rights directly to the issuers.
When new shares are distributed to beneficial shareholders, such as through a stock split,
JASDEC receives new stock allocation data from the issuer or its transfer agent, and notifies suchstock allocation data to all concerned participants. JASDEC and the participants then increase thebalance in their participant and customer account ledgers on a basis of this data.
JASDEC issued 47.8 million notifications in fiscal 2001, up 14.3% from fiscal 2000, representing 367.1 billion shares, up 19.4%. Reflecting an increase in shares in custody, notificationsof beneficial shareholders on which record date ended March 2002 rose 2.3, million, up 12.5 %,to 20.8 million notifications, which represented 175.7billion shares, an increase of 31.0 billion
shares, up 21.5 % from the year before, to record the highest figures since JASDEC’s businessinitiation.

Beneficial Shareholder Notification(Thousands of notifications)(Millions of shares)

50,000500,000

40,000400,000

30,000300,000

20,000200,000

10,000100,000

0

0

1998

1999

2000

2001

2002

Notified beneficial shareholders
Notified sharesJapan Securities Depository Center, Inc.

REVIEW OF OPERATIONSConvertible Bonds
Responding to the needs and the requests from the participants and market, JASDEC expanded its
services to include convertible bonds (CBs) in November 2001. With substantial numbers of CBs
deposited since the beginning of the services, reflecting the size of the CB market in Japan, thenumber of issues we handled at the end of March 2002 was 553 and the amount of the CBs in
custody was ¥8,085.1 billion, representing 88.8 % of the amount outstanding.
From the start of the services in November 2001 to the end of March 2002, the amount ofdeposited CBs totaled ¥9,467.6 billion and the amount withdrawn totaled ¥1,382.4 billion. The
amount of exchange trade transfers was ¥1,016.1 billion, and that of non-exchange trade transfers
was ¥5,627.6 billion.
During the same period, JASDEC processed ¥870.8 billion of principal and interest paymenton the CBs in our custody.

Vo l u m e o f C B s i n C u s t o d y
Custody Vol.

(Billions of yen)

10,000No. of Issues((86.2%)

8,000(88.8%)
73.5%

6,000
(51.5%)(55.4%)

4,000
656

655

652

651
553

2,000

0

Nov. 26

Nov. 30

Dec. 31

Feb. 28 ’02

Mar. 31 ’02) Custody RatioANUUAL REPORT 2002

20
21

Depository Services of Other JASDEC-Eligible Securities
Exchange Traded Funds (ETFs)
In July 2001, JASDEC started to provide the depository services for ETFs pegged with TOPIX and
the Nikkei Stock Price Average (Nikkei 225). During the period from July 2001 to March 2002,
703.9 million units were deposited while 50.8 million units were withdrawn. As a result, units heldin custody totaled 691.8 million, representing 14 issues at the end of March 2002. During thesame period, the number of units of exchange trade transfers was 371.3 million, and that of nonexchange trade transfers was 2,048.0 million.

Real Estate Investment Securities (REITs)
In September 2001, JASDEC started to deal with REITs. During the period from September 2001
to March 2002, 861,391 units were deposited and 101,707 units were withdrawn. Reflecting
these transactions, units held in custody totaled 759,684 units, representing 4 issues at the end of
March 2002. During the same period, exchange trade transfers recorded 395,236 units while nonexchange trade transfers amounted to 968,055 units.

Preferred Investment Bonds of Financial Institutions Established by Cooperative
Associations
In December 2000, JASDEC started to handle preferred investment bonds of financial institutions
established by cooperative associations. During fiscal 2001, 28,431 units were deposited and7,532 units were withdrawn. At the end of March 2002, preferred bonds held in custody recorded
210,528 units, representing 1 issue. During fiscal 2001, exchange trade transfers was 67,018
units, non-exchange trade transfers 62,085 units.

Japan Securities Depository Center, Inc.

MANAGEMENTBOARD OF DIRECTORS

Yoshinobu Takeuchi

Hiromi Murai

Masao Yagi

Katsuro Kanzaki

Tatsunori Imagawa

Fujio Ido

Mamoru Kikuichi

Yoneo Sakai

Masaya Shikama

ANUUAL REPORT 2002

Masaru Takei

Hideo Watanabe

Kamezo Nakai

Nobuyoshi Nakano

Toshitsugu Shimizu

Kunihisa Hama

Youichi Fukae

AUDITORS

Takashi Daigo

Takashi Kusama

Masari Ugai

22
23

Japan Securities Depository Center, Inc.

BOARD MEMBERS AND AUDITORS

President & CEO

Yoshinobu Takeuchi

Managing Directors Hiromi Murai
Masao Yagi

Directors

Fujio Ido

Director, Senior Executive Officer, The Sumitomo Trust & Banking Co., Ltd.

Tatsunori Imagawa Senior Managing Director, The Bank of Tokyo-Mitsubishi, Ltd.
Katsuro Kanzaki

Professor, Faculty of Law, Himeji Dokkyo University

Mamoru KikuichiManaging Director, Japan Securities Dealers Association

Yoneo Sakai

Managing Executive Officer, Mizuho Corporate Bank, Ltd.

Masaya Shikama

Executive Director, UBS Warburg (Japan) Limited

Toshitsugu Shimizu Executive Officer, Tokyo Stock Exchange, Inc.
Masaru Takei

General Manager, Tokyo Electric Power Company

Kamezo Nakai

Managing Director, The Nomura Securities Co., Ltd.

Nobuyoshi Nakano Managing Director, Nikko Salomon Smith Barney Limited
Kunihisa Hama

Lawyer

Youichi Fukae

Senior Executive Officer, UFJ Trust Bank Limited

Hideo Watanabe

Executive Officer, Daiwa Securities SMBC Co., Ltd.

Standing Auditor

Takashi Daigo

Auditors

Masari Ugai

Vice Chairman, Japanese Bankers Association

Takashi Kusama

Director & Senior Executive Officer, Shinko Securities, Co., Ltd.

ANUUAL REPORT 2002

ORGANIZATION STRUCTURE

24
25

Japan Securities Depository Center, Inc.

FINANCIAL STATEMENTS (JASDEC)
Balance Sheets
March 31, 2002 and 2001

Thousands of
Yen

2002
AssetsCurrent Assets:
Cash and Deposits
Accounts Receivable
Advance Payment
Securities
Other
Fixed Assets:
Capital Assets
Other Fixed Assets:
Building and Structures
Furniture and Tools
Security Deposits
Computer Software
Other
Total Fixed Assets
Total Assets
Liabilities
Current Liabilities:
Short-term Loan Payable
Accounts Payable
Accrued Income Taxes
Other
Fixed Liabilities:
Long-Term Debt
Other
Total Liabilities

¥

2001

¥

17,1552,358,614
14,886
2,042,027
98,7544,531,436

2002$

14,74024,586604—
239,932

3,019,000

3,019,000

22,657

66,7012,228,692
374,061
4,774,486
42,0907,486,030
10,505,030¥ 15,826,023

69,2762,136,300
355,234
3,266,326
1,155,241
6,982,377
10,001,377¥ 14,532,813

500
16,7262,807
35,831316
56,18078,837$ 118,769¥¥$

9,000,000
2,454,394
228,658
79,71911,762,771—
106,252
106,252¥ 11,869,023—
3,944,447—
74,386
4,018,833

67,542
18,4201,716
598
88,276

6,433,570
123,410
6,556,980¥ 10,575,813

$

—
797
797
89,0733,019,000¥3,019,000$

22,657

938,000—
938,000¥ 3,957,000¥ 15,826,023

1,014,943(76,943)938,000¥ 3,957,000¥ 14,532,813

Net Assets
Capital Assets¥
Other Net Assets:
Retained Earnings brought Forwardfrom the Preceding Term
Net Income (Loss) for the Current Term
Total Net Assets
Total Liabilities and Net Assets

1,964,037
3,276,134
80,522—300
5,320,993

Thousands of
U.S.dollars

7,039
—
7,039
$ 29,696$ 118,769

U.S. dollar amounts have been translated, for convenience only, at the rate of ¥133.25=US$1 as of March 31, 2002.

ANUUAL REPORT 2002

Statements of Revenue and Expenditure
Years ended March 31, 2002 and 2001

Thousands of
Yen

2002
RevenueFund Operations
Account-Opening Fees
Income from Fees (before Refund):Deposits
Book-Entry Delivery
Withdrawals
Custody
Other
Refund of Fees
Income from Fees (after Refund)
Other Income
Total Revenue (A)Revenue before Refund (A’)
Expenditure
General Administration Expenses
Business Expenses:
Computers
Outsourcing Services
Stock Name Transfer Expenses
Other

¥

5,340
37,600Thousands of
U.S.dollars

2001
¥

6,823
38,800

2002
$

40
282

504,480
8,990,297
150,532
5,184,338
2,567,495
17,397,142

446,205
6,102,618
143,259
5,681,481
1,679,441
14,053,004

3,785
67,4691,130
38,907
19,268130,560(5,810,146)
11,586,996
14,634¥ 11,644,570¥ 17,454,716(3,235,322)
10,817,682
35,743¥ 10,899,048¥ 14,134,370(43,603)
86,957110$ 87,389
130,992¥¥$

1,348,850

1,157,436

10,123

3,145,294
2,723,130
1,729,789
424,453
8,022,666
2,038,310
6,086

3,081,891
2,678,035
1,881,970
265,933
7,907,829
1,117,697
793,029

Total Expenditure (B)¥ 11,415,912
Net Income (Loss) Before Income Taxes (A)-(B) 228,658
Provision for Income Taxes
228,658
Net Income (Loss)¥—Net Income Before Income Taxes
before Refund (A’)-(B)¥ 6,038,804¥ 10,975,991(76,943)—¥(76,943)$

85,673
1,716
1,716
—

¥

$

45,319Depreciation
Other Expenses

3,158,379

23,604
20,436
12,982
3,185
60,207
15,297
46$

U.S. dollar amounts have been translated, for convenience only, at the rate of ¥133.25=US$1 as of March 31, 2002.

26
27

Japan Securities Depository Center, Inc.

Notes to Financial Statements
NOTES TO THE STATEMENTS OF REVENUE AND EXPENDITURE
1. Japan Securities Depository Center (JASDEC) is a non-profit foundation and does not operatea profit-making business as defined by Japanese tax law.
2. The fee charged to participants for opening the initial account with JASDEC is ¥1 million, andthat for additional sub-accounts is ¥300,000 each.

NOTES TO THE BALANCE SHEETS
1. The capital assets appearing under “Fixed Assets” consist of fixed bank deposits and Money Management Fund.
2. Cumulative depreciation charges for the other fixed assets are as follows:

Thousands of
Yen

2002
Building and structures
Furniture and tools
Other
Total

¥

63,454
2,344,159
2,832¥ 2,410,446

Thousands of
U.S.dollars

2001¥

217,637
3,727,628
2,266¥ 3,947,531

2002
$

$

476
17,592
21
18,089

3. Short-term loan payable and long-term debt as of March 31, 2002 and 2001 consist of the follows:
Thousands of
Yen

2002

Thousands of
U.S.dollars

2001

2002

Short-term debt:
Japan Securities Depository Center Inc.
Banks

¥ 2,400,000
6,600,000

¥

—
—

$

18,01149,531¥ 9,000,000

¥

—

$

67,542¥¥ 6,433,570$—

Long-term debt:
Members of the Stock exchangesof Tokyo, Osaka and Nagoya—

ANUUAL REPORT 2002

28
29

Report of Independent Accountants

Chairman of the Board of Directors
Japan Securities Depository Center
We have audited the accompanying balance sheets of Japan Securities Depository Center(JASDEC) as of March 31, 2002 and 2001, and the related statements of revenue and expenditure for the years then ended, all expressed in Japanese Yen. Our audits were made in accordance with auditing standards generally accepted in Japan and, accordingly, included such testsof the accounting records and such other auditing procedures as we considered necessary in thecircumstances.
In our opinion, the financial statements referred to above present fairly the financial positions of
JASDEC as of March 31, 2002 and 2001 and the results of its operations for the years thenended in conformity with accounting principles generally accepted in Japan for Public-Service
Corporation and Business Corporation , and with the Articles of Association of JASDEC.

ChuoAoyama Audit Corporation
Tokyo, JapanMay 18, 2002

Notice to Readers:
The accompanying financial statements are not intended to present the financial positions of the JASDEC andresults of its operations in accordance with accounting principles and practices generally accepted in countries andjurisdictions other than Japan. The standards, procedures and practices used to audit such financial statements arethose generally accepted and applied in Japan.

Japan Securities Depository Center, Inc.

LIST OF PARTICIPANTS / SHAREHOLDERSTOTAL:285
Securities Companies* Ace Securities Co., Ltd.
* Aioi Securities Co., Ltd.
* Aizawa Securities Co., Ltd.
* Akakiya Securities Co., Ltd.
* Alps Securities Co., Ltd.
* Ando Securities Co., Ltd.
* Angel Securities Co., Ltd.
* Ark Securities Co., Ltd.
* Awa Securities Co., Ltd.
Axes Japan Securities Co., Ltd.
* Bansei Prime Capital Securities
Co., Ltd.
* Banyo Securities Co., Ltd.
* Bright Securities Co., Ltd.
* Century Securities Co., Ltd.
* Chuo Securities Co., Ltd.
* Cosmo Securities Co., Ltd.
* Daikumamoto Securities Co., Ltd.
* Daiman Securities Co., Ltd.
* Daisei Securities Co., Ltd.
* Daitoku Securities Co., Ltd.
* Daiwa Securities Co., Ltd.
* Daiwa Securities SMBC Co., Ltd.
DLJ direct SFG Securities Inc.
* Dojimakanto Securities Co., Ltd.
* E. Trade Securities Co., Ltd.
* Eiwa Securities Co., Ltd.
* FIRSTMAKE SECURITIESCO., LTD.
Get Securities Co., Ltd.
* Gifu Dai-ichi Securities Co., Ltd.
* H. S. SECURITIES Co., Ltd.
* Hikari Securities Co., Ltd.
* Himawari Securities, Inc.
* Hinode Securities Co., Ltd.
* Hiraoka Securities Co., Ltd.
* Hirota Securities Co., Ltd.
* Ichiyoshi Securities Co., Ltd.
Imamura Securities Co., Ltd.
* Ise Securities Co., Ltd.
Issei Securities Co., Ltd.
ITM Securities Co., Ltd.
ITOCHU Capital Securities Ltd.
* Iwai Securities Co., Ltd.
* Izumi Securities Co., Ltd.
* Japan Asia Securities Co., Ltd.
* Japan Bond Trading Co., Ltd.
* Japan Cross Securities Co., Ltd.
* Japan Electronic Securities Co., Ltd.
* Jet Securities, Inc.
* Joko Securities Co., Ltd.
* Jonan Securities Co., Ltd.
* Jujiya Securities Co., Ltd.
* JVIC SECURITIES CO., LTD.
* Kabu. com Securities Co., Ltd.
* Kadoya Securities Co., Ltd.

* Kagawa Securities Co., Ltd.
* Kaneju Securities Co., Ltd.
* Kaneyama Securities Co., Ltd.
* Kaneyoshi Securities Co., Ltd.
* Kanzaki Securities Co., Ltd.
* Kimura Securities Co., Ltd.
* Knight Securities Japan Ltd.
* Kobe Securities Co., Ltd.
* Kokufu Securities Co., Ltd.
Kokusai Securities Co., Ltd.
* Kotobuki Securities Co., Ltd.
* Kurokawakitoku Securities
Co., Ltd.
* Kyokuto Securities Co., Ltd.
Kyosei Securities Co., Ltd.
* Kyowa Securities Co., Ltd.
* Maeda Securities Co., Ltd.
* Maruchika Securities Co., Ltd.
* Marudai Securities Co., Ltd.
* Marufuku Securities Co., Ltd.
* Maruhachi Securities Co., Ltd.
* Maruko Daika Securities Co., Ltd.
* Marukuni Securities Co., Ltd.
* Marusan Securities Co., Ltd.
* Maruwa Securities Co., Ltd.
* Matsui Securities Co., Ltd.
* Matsusaka Securities Co., Ltd.
* Meiko National Securities Co., Ltd.
* Meiwa Securities Co., Ltd.
* Merrill Lynch Japan Securities
Co., Ltd.
Mirai Securities Co., Ltd.
* Mita Securities Co., Ltd.
* Mito Securities Co., Ltd.
Miyako Securities Co., Ltd.
* Mizuho Securities Co., Ltd.
* Monex, Inc.
* Murosei Securities Co., Ltd.
* Musashi Securities Co., Ltd.
* Nagano Securities Co., Ltd.
* Naito Securities Co., Ltd.
* Nakaizumi Securities Co., Ltd.
* Nara Securities Co., Ltd.
* Naruse Securities Co., Ltd.
* NCS Securities Ltd.
NIHON KYOEI SECURITIESCO., LTD.
* Niigata Securities Co., Ltd.
* Nikko Beans, Inc.
* Nikko Cordial Securities Inc.
Nippon First Securities Co., Ltd.
* Nippon Global Securities Co., Ltd.
* Nishimura Securities Co., Ltd.
* Nishiwaki Securities Co., Ltd.
* Nissan Securities Co., Ltd.
Nissho Iwai Securities Co., Ltd.
Nittan Broker's Securities Co., Ltd.
* Norinchukin Securities Co., Ltd.
* Nozomi Securities Co., Ltd.

* Odawara Securities Co., Ltd.
* Okachi Securities Co., Ltd.
* Okasan Securities Co., Ltd.
* Okinawa Securities Co., Ltd.
One Asia Securities Co., Ltd* Orient Securities Co., Ltd.
* Orix Securities Co., Ltd.
* Otsuka Securities Co., Ltd.
* P.S.I. Securities Co., Ltd.
* Panta Rhei Securities, Co., Ltd.
* Port Satellite Securities. Co., Ltd.
Privee Zurich Securities Co., Ltd.
Prudential Financial Advisors
Securities Co., Ltd.
* Retela Crea Securities Co., Ltd.
Rokuwa Securities Co., Ltd.
* Sakamoto Hokuriku Securities
Co., Ltd.
* Sakura Friend Securities Co., Ltd.
* Sanei Securities Co., Ltd.
Sanjo Securities Co., Ltd.
* SANKO SECURITIES Co., Ltd.
* Sankyo Securities Co., Ltd.
* Sasayama Securities Co., Ltd.
* Shinbayashi Securities Co., Ltd.
* Shinko Securities Co., Ltd.
* Shin-Ogaki Securities Co., Ltd.
Shinsei Securities Co., Ltd.
* Shinwa Securities Co., Ltd.
SHIZUGIN TM SECURITIESCO., LTD.
* Shizuoka Tokai Securities Co., Ltd.
* Shonai Securities Co., Ltd.
* Sieg Securities Co., Ltd.
Sparx Securities Co., Ltd.
* Star Futures Securities Co., Ltd.
Starts Securities Co., Ltd.
* Super Sieg Securities Co., Ltd.
* Taicom Securities Co., Ltd.
* Takagi Securities Co., Ltd.
* Tama Securities Co., Ltd.
* Tamaki Securities Co., Ltd.
* THE ASAHI RETAILSECURITIES CO., LTD.
* The Kosei Securities Co., Ltd.
* The Miki Securities Co., Ltd.
* The Mizuho Investors Securities
Co., Ltd.
* The Nakahara Securities Co., Ltd.
* The Nomura Securities Co., Ltd.
* The Tachibana Securities Co., Ltd.
* Tobu Securities Co., Ltd.
* Tokai Tokyo Securities Co. Ltd.
Tokyo - Mitsubishi Securities
Co., Ltd.
Tokyo-Mitsubishi Personal
Securities Co., Ltd.
Tokyo-Mitsubishi TD Waterhouse
Securities Co., Ltd.

ANUUAL REPORT 2002

* Toyo Securities Co., Ltd.
TRADERS SECURITIESCO., LTD.
* Tsukamoto Securities Co., Ltd.
* Tsuyama Securities Co., Ltd.
UFJ Capital Markets Securities
Co., Ltd.
* UFJ Tsubasa Securities Co., Ltd.
* UNICOM SECURITIES CO., LTD.
* Usuki Securities Co., Ltd.
* Utsumiya Securities Co., Ltd.
* Utsunomiya Securities Co., Ltd.
West wood Capital, LLC* WORLD NICHIEI Securities
Co., Ltd.
* Yahata Securities Co., Ltd.
* Yamagata Securities Co., Ltd.
* Yamagen Securities Co., Ltd.
* Yamamaru Securities Co., Ltd.
* Yamani Securities Co., Ltd.
* Yamawa Securities Co., Ltd.
* YOKOHAMA securities co., LTD.
* Yutaka Securities Co., Ltd.
ABN Amro Securities (Japan)
Limited* Banc of America Capital Markets Japan, Inc.
* Barclays Capital Japan Limited* Bear Stearns (Japan) Limited* BNP Paribas
Securities(Japan)Limited
Carswell-T.I.R., Limited
Cazenove & Co., (Japan) Ltd.
* Citicorp International Securities
Ltd.
* Commerz Securities (Japan) Co.,
Ltd.
Core Pacific - Yamaichi Securities
Co., Ltd.
Credit Agricole Indosuez Securities(Japan) Limited* Credit Lyonnais Securities Europe
Switzerland AG.
* Credit Suisse First Boston Securities(Japan) Limited* Deutsche Securities Limited. Tokyo
Branch* Dresdner Kleinwort Wasserstein
Ltd.
Fidelity Brokerage Services (Japan),
LLC* Goldman Sachs (Japan) Limited* HSBC Securities(Japan)Limited
HVB Capital Asia Limited
Hyundai Securities Co., Ltd.
ING Securities Japan Limited* Instinet Japan Limited* J.P.Morgan Securities Asia Limited
Jefferies (Japan) Limited* KBC Securities Japan

Lehman Brothers Japan Inc.
* Morgan Stanley Japan Limited
Morgan Stanley Nippon
Securities Limited* Nikko Salomon Smith Barney
LimitedRBC Dominion
Securities(Japan)Limited
SAMSUNG SECURITIESCO., LTD.
Sassoon Securities Japan Ltd. Tokyo
BranchSociete Generale Securities (North
Pacific) Ltd.
* UBS Warburg (Japan) Limited* WestLB Securities Pacific Limited
Banks
AOZORA BANK, LTD.
Mizuho Bank, Ltd.
* Mizuho Corporate Bank, Ltd.
* SUMITOMO MITSUI BANKINGCORPORATION* The Asahi Bank, Ltd.
* The Bank of Tokyo-Mitsubishi, Ltd.
* The Bank of Yokohama, Ltd.
* The Daiwa Bank, Limited
The Hiroshima Bank, Ltd.
* THE NAGANO BANK, LTD.
* The Tokyo Tomin Bank, Limited
Tokyo Bankers Association* UFJ Bank Limited
BNP PARIBAS PRIVATE BANK(JAPAN) LIMITED
Citibank, N.A.
SG Private Banking (Japan) LimitedStandard Chartered Bank
The Hongkong and Shanghai
Banking Corporation Limited
Trust Banks and Other Financial
Institutions
Asahi Trust and Banking Co., Ltd.
* Japan Trustee Services Bank, Ltd.
* Mitsui Asset Trust and Banking
Company, Limited
Mizuho Asset Trust Bank, Ltd.
NikkoCiti Trust and Banking
Corporation
ORIX Trust and Banking
Corporation
Shinkin Trust Bank, Ltd.
Shinsei Trust and Banking Co., Ltd.
* The Chuo Mitsui Trust andBanking Company, Limited
The Kyoto Shinkin Bank
* The Master Trust Bank of Japan,
Ltd.
* The Mitsubishi Trust and Banking
Corporation❖ Overseas CSDs participating in JASDEC through JSCC;
Euroclear France, The Central Depository (Pte) Limited (Singapore)

30
31

The MizuhoTrust & Banking Co.,Ltd.
The Nomura Trust and Banking
Co., Ltd.
* The Norinchukin Bank
* The Norinchukin Trust & Banking
Co., Ltd.
* The Sumitomo Trust & Banking
Co., Ltd.
* Tokyo Shoken Credit Cooperative* Trust & Custody Service Bank, Ltd.
* UFJ Trust Bank Limited
Barclays Global Investors Japan
Trust & Banking Co., Ltd.
Cititrust and Banking Corporation
Credit Suisse Trust and Banking
Co., Ltd.
Deutsche Trust Bank Limited
J.P.Morgan Trust Bank, Ltd.
* JSF Trust & Banking Co., Ltd.
State Street Trust and Banking
Company, Limited
UBS (Trust and Banking) Limited
Insurance Companies* DAIDO LIFE INSURANCECOMPANY
Mitsui Sumitomo InsuranceCo., Ltd.
Nippon Life Insurance Company
Sompo Japan Insurance Inc.
The Dai-Ichi Mutual Life Insurance
Company
The Meiji Mutual Life Insurance
Company* THE TAIYO MUTUAL LIFE
INSURANCE COMPANYThe Tokio Marine & Fire InsuranceCo., Ltd.
Stock Exchanges and Others* Central Tanshi Co., Ltd.
* Chubu Securities Finance Co., Ltd.
* Daiko Shoken Business Co., Ltd.
* Fukuoka Stock Exchange* Japan Securities Agents, Ltd.
* Japan Securities Clearing
Corporation ❖* Japan Securities Dealers Association* Japan Securities Finance Co., Ltd.
Jasdaq Market, Inc.
* Nagoya Stock Exchange, Inc.
* Osaka Securities Exchange, Inc.
* Osaka Securities Finance Co., Ltd.
* Sapporo Securities Exchange* Tokyo Securities Transfer AgentCo., Ltd.
* Tokyo Stock Exchange, Inc.
* Shareholder(as of July 1, 2002)

Japan Securities Depository Center, Inc.

HISTORY

MAY 1984 The Law Concerning Central Securities Depository and Book-Entry Transfer (CSD Law) was
passed, and later enforced in November 1984.
DEC. 1984 Japan Securities Depository Center (JASDEC) was founded as a non-profit foundation undera permit granted by the Minister of Finance and the Minister of Justice (competent
ministers) pursuant to Article 34 of the Civil Code.
MAY 1985 JASDEC was designated as a depository under the CSD Law by the competent ministers.
JUL. 1986 JASDEC instituted its business regulations with the approval of the competent ministers, andimplemented them on August 1 of the same year.
OCT. 1988 JASDEC decided to inaugurate depository services in stages lasting from October 1991
(Phase 1), through October 1992 (Phase IV).
FEB. 1989 JASDEC installed its mainframe computer at its computer center in Tokyo.
SEP. 1990 Development of software for use in the depository systems was completed.
OCT. 1990 Pursuant to the CSD Law, the competent ministers designated the following securities as
those eligible to be handled by the depository system(1) share certificates listed on any stock exchanges in Japan.
(2) share certificates registered with, or designated by, Japan Securities Dealers Association
as over-the-counter stocks(3) share certificates to be issued after the date of designation, which fall in the range
specified above.
AUG. 1991 With the authorization of the competent ministers, JASDEC entrusted part of its business to
the Japan Securities Clearing Corporation.
OCT. 1991 JASDEC began offering its depository services in the Tokyo area (Phase 1) in accordance with
its phased implementation plan.
APR. 1992 JASDEC started to provide the beneficial shareholder notification system on a complete basis
OCT. 1992 JASDEC began providing comprehensive depository services, covering all listed and OTC
stocks (Phase IV).
JUN. 1993 The U.K. Securities and Futures Authority approved JASDEC as an eligible foreign custodian.
AUG. 1993 The U.S. Securities and Exchange Commission issued a no-action letter to exempt JASDEC
from Section 17(f) of the Investment Company Act of 1940 and Rule 17f-5(c) (2) (iii) .
JUN. 1997 The German Bankers Association approved JASDEC as an eligible foreign custodian.
MAY 2000 JASDEC implemented its new securities custody and book-entry transfer system.
SEP. 2000 JASDEC constructed a back-up center in Osaka.
MAY 2001 JASDEC launched the system for DVP settlement of the exchange trades in Tokyo and Osaka
JUN. 2001 The Law Concerning Central Securities Depository and Book-Entry Transfer (CSD Law)
was amended and became effective April 2002.
SEP. 2001 JASDEC implemented Pre-Settlement Matching System.
NOV. 2001 Committee for Reform of Securities Clearing and Settlement System(JSDA) published thereport on “Demutualization Framework of JASDEC”.
JASDEC started handling of corporate convertible bonds.
JAN. 2002 Japan Securities Depository Center Incorporated (JASDEC Inc.) was established.
FEB. 2002 Custody ratio recorded over 50%.
JUN. 2002 JASDEC transferred its businesses to JASDEC Inc. and dissolved.
JASDEC Inc. began securities depository and book-entry transfer operations.

ANUUAL REPORT 2002

32
33

CORPORATE INFORMATION

Company Name:Japan Securities Depository Center, Inc.

Date of Incorporation:

January 4, 2002

Date of Operations Begun:

June 17, 2002

Capital:¥4.25 billion (paid-in capital: ¥8.5 billion)

Common Stock Issued:

8,500 shares

Number of Shareholders:207

Number of Employees:

71

Additional Personnel:

224 (working for entrustees)
125 (working on outsourced systems development and operations)Registered Head Office

5th Floor, Daini-Shoken Kaikan Bldg.
1-1, Nihombashi-Kayaba-cho 2-chome
Chuo-ku, Tokyo 103-0025, Japan
Phone: (81) 3-3661-0161
Facsimile: (81) 3-3661-2810
http://www.jasdec.com

Operations Offices
Tokyo Office:6th Floor, Daini-Shoken Kaikan Bldg.
1-1, Nihombashi-Kayaba-cho 2-chome, Chuo-ku, Tokyo 103-0025

Osaka Office:6-10, Kitahama 1-chome, Chuo-ku, Osaka 541-0041

Nagoya Office:3-17, Sakae 3-chome, Naka-ku, Nagoya 460-0008

Fukuoka Office:14-2, Tenjin 2-chome, Chuo-ku, Fukuoka 810-0001

Sapporo Office:14-1, Minamiichijo-Nishi 5-chome, Chuo-ku, Sapporo 060-0061(as of June 30, 2002)

Japan Securities Depository Center, Inc.

Printed in Japan on recycled paper