ProgressSociety
CHANGE

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

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

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

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

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

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

Japan Securities Depository Center, Inc.
ANNUAL REPORT 2008

Highlights

7

Message from the President

8 — 11

Special Feature on Dematerialization

12 — 19

Corporate Governance

20 — 23

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

28 — 33

Book-Entry Transfer System for Investment Trusts

34 — 37

DVP* Settlement Services for NETDs**

38 — 41

Pre-Settlement Matching System (PSMS)***

42 — 45

Custody Services for Foreign Stocks

46 — 49

International Relations

50 — 51

Analysis of Business Performance andFinancial Results

52 — 53

Financial Section
Consolidated Financial Statements and Notes
Report of Independent Auditors

54 — 66
67

History

68 — 69

Corporate Data

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

6

Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Highlights

JASDEC, as Japan’s only central securities depository (CSD), operates
and manages an infrastructure indispensable for securities transactions. By
ellectronically processing transfer of ownership rights between accounts,
we are able to streamline trading transactions, as well as ensure execution ofmoney settlements by linking our system with the Bank of Japan Financial
Network System and other systems.

Shares in Custody

320 billion
sharesJASDEC provides stable and secure depository
and administration services for stock certificates entrusted by investors through securities
firms.

(As of March 31, 2008)

Custody Ratio

84.3%(As of March 31, 2008)

Shares Transferredby Book–Entry
Transfer
1,105 billion
sharesAs a central depository, JASDEC offers security and convenience. The percentage of sharesin custody represents over 80% of all shares
listed on Japanese stock exchanges.

At JASDEC, shares are traded through bookentry transfers. There is no need to change thenames of shareholders in the share registry at
the time of securities trades.

(Fiscal Year 2007)

Japan Securities Depository Center, Inc. ANNUAL REPORT 20087

Message from the President

8Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

JASDEC is accelerating efforts to complete a
new book-entry transfer system prior to dematerialization of stock certificates in January
2009.
JASDEC is aggressively working to develop a new
book-entry transfer—dematerialization of stock
certificates—for securities settlement system reforms.
Acknowledging our public role as an organization
responsible for market infrastructure, we intend to proactively address fundamental changes in domestic andforeign capital markets, as well as operate the businessfor the needs of market participants. By providing ahighly reliable, convenient, and efficient securities
settlement system, we wish to improve the functionsof the securities market, thereby contributing to thedevelopment of society.

Japan Securities Depository Center, Inc. ANNUAL REPORT 20089

Message from the President

Since the launch of the securities depository and book-entry transfer system forstock certificates issued by listed companies in 1991, we have expanded our services
with various products such as corporate bonds, investment trusts and foreign
stocks. We have also successively upgraded our business functions, including thecommencement of PSMS (Pre-settlement matching system) and DVP settlement
systems for NETDs (non-exchange transaction deliveries) to provide highly reliable,user-friendly and efficient settlement services. On top of these developments, we are
currently promoting preparations for dematerialization of stock certificates for listedcompanies toward implementation in January 2009, as a further significant step forthe reform of securities clearing and settlement system in Japan. As an infrastructure
supporting securities settlement, it is our mission to facilitate the new systemsmoothly.
In fiscal 2007 ended March 31, 2008, the subcommittee for dematerialization ofstock certificates continued to review the practical transition procedures, including
administrative transactions after the dematerialization. In November 2007, wepreannounced the user fee schedule under the new system. In March 2008, we held
briefings for issuers to explain the transition process to the new system. For systemdevelopment relating to the dematerialization, we began testing of the overall system
in March 2008, in advance for preliminary operations regarding the shareholders’data system scheduled to begin in September 2008.
In this fiscal year 2008 ending March 31, 2009, we are completing businessregulations for the new book-entry transfer system of stocks following the dematerialization. We will also conduct full-scale testing of the system, and endeavor toensure that the dematerialization of stock certificates could be implemented smoothly
in January 2009.
In April 2007, JASDEC jointly hosted the 9th Conference of Central Securities
Depositories (CSD9). CSD conferences are held once every two years. The 1st
CSD Interim Meeting was also held in April 2008 in Tokyo. In these meetings,
the exchange of information and opinions on international themes pertaining tosecurities clearing and settlement systems were conducted. We will continue to work
for strengthening cooperation with overseas CSDs with a view to establishment ofoperational linkages, thereby proactively addressing the ongoing globalization ofcapital markets. As Japan’s only central securities depository, we are committed toproviding highly reliable, user-friendly, and efficient infrastructure for securities
clearing and settlement.
We would like to thank all of our users, participants, and investors for theircontinuing support and cooperation.

Yoshinobu Takeuchi
President & CEO

10 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Japan Securities Depository Center, Inc. ANNUAL REPORT 200811

Special Feature on Dematerialization

The introduction of a leading-edge system willlead to the further development of securities
markets in Japan.

Dematerialization is scheduled for January 2009
The joint-stock company system was introduced into Japan
more than 100 years ago. Stock certificates have long represented ownership rights of shareholders. The function of stock
certificates, however, is soon to be eliminated, and physicalcertificates will be phased out.
In January 2009, the stock certificates of listed companies
in Japan will become null and void. In turn, electronic records
registered on computer systems will prove share ownership.
This process is referred to as dematerialization of stock
certificates. As an organization responsible for developing andmaintaining Japan’s stock clearing and settlement system,
JASDEC has been cooperating with other relevant institutions
for the conversion to the new system.
In this special feature, we will explain why the dematerialization of stock certificates is needed and its merits, as well as
provide an overview of the new book-entry transfer system.

12 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Why dematerialize stock certificates?
Stock certificates, with their watermarked paper and delicate ink, are part of
the traditional world of stock ownership. The weight and texture of the certificates in their hands remind shareholders of the value of their rights. The
paper certificates, however, require the cost of printing, the security needed
to ensure their safekeeping, and the insurance required at the time of transfer,as well as the risks associated with their loss, theft or forgery. So long as
stocks exist as physical certificates, they involve inherent costs and risks.
Dematerialization of stock certificates can eliminate such costs andrisks. Under the new system, shareholders’ rights are recorded electronically on the ledger of the book-entry transfer accounts. This system totally
removes the risk of forgeries or loss (due to the lack of information regarding
their place of storage) at the time of inheritance. For issuing companies,
dematerialization of stock certificates not only results in cost reduction, butalso improves the management of shareholder ledgers and allows for theeasy recognition of the composition of shareholders, enabling the companies
to use shareholder information effectively for IR activities and flexible
capital policy.
In the 1990s, following the burst of Japan’s economic bubble, thebankruptcy of large financial institutions caused a temporary halt in securities settlements, revealing various problems in Japan’s securities clearing
and settlement system. Since then, it has taken 10 years to reform thesystem; JASDEC, a key player of the reform, introduced a Delivery versus
Payment (DVP) system that links the delivery of stocks with payments and a
Straight-through-processing (STP) system, where entire trade processes andpayment transactions are processed electronically without manual handling.
In addition, we introduced book-entry transfer systems for dematerializedcommercial papers, corporate bonds, and investment trusts. In January
2009, dematerialization of stock certificates will be commenced, as a further
significant step for the securities clearing and settlement systems reform.
Such initiatives provide higher levels of efficiency for system users, thereby
lowering administrative costs and dramatically reducing the number of errors
by manual processing.

October

1991

JASDEC commenced depository and book-entry transfer system initially for
50 stocks listed on the Tokyo Stock Exchange.

October

1992

JASDEC began full-scale services of depository and book-entry transfer.

September 2001

JASDEC launched its Pre-Settlement Matching System (PSMS) for domestic trades bydomestic institutional investors.

November 2001

JASDEC started handling convertible bonds (CBs).

March

2003

JASDEC inaugurated its electronic book-entry system for dematerialized commercial paper (CP).

May

2004

JASDEC commenced DVP settlement services for NETDs.

January

2006

JASDEC debuted its book-entry transfer system for corporate bonds.

May

2006

JASDEC launched its depository and book-entry transfer system for foreign stocks.

January

2007

JASDEC introduced its book-entry transfer system for investment trusts.

January

2008

JASDEC commenced its dematerialized Exchange-Traded Funds (ETFs) book-entry
transfer system.

January

2009

JASDEC will implement dematerialization of stock certificates.

Japan Securities Depository Center, Inc. ANNUAL REPORT 200813

Special Feature on Dematerialization

The New System and JASDEC’s Role
Under the current depository and book-entry transfer system, JASDEC, as the sole provider of central
securities depository, accepts orders for securities
deposits and withdrawals. JASDEC also holds the
securities in custody and operates the book-entry
transfer of the securities traded. In the event thatshareholders, through securities companies, banks
and other participants of the depository and bookentry transfer system, deposit their stock certificates with JASDEC, the certificates are managed in
the ledger of book-entry transfer accounts provided
by the participants. Under the current system,
shareholders are allowed to keep stock certificatesoutside of the depository and book-entry transfer
system. Therefore, issuing companies are required
to keep two kinds of books: one of shareholders
and the other of beneficial shareholders. This creates
the additional task of identification of shareholders’names on both books ahead of the record date.
After conversion to dematerialization ofstock certificates, stock certificates will become
invalidated, being replaced by electronic records

on the customer accounts at account management
institutions such as securities companies and banks.
The new system will consolidate two separatebooks of shareholders at issuing companies into asingle book of shareholders. When a shareholder
has accounts at more than one account management
institution, name identification (which is currently
carried out by individual issuing companies) will
be conducted in JASDEC’s system. Under the new
system, shareholders information which is alreadyidentified by JASDEC will be delivered to issuing
companies as “General Shareholders Notification”
sooner than under the current system. It will greatly
streamline the administrative procedures at issuing
companies.
Moreover, the new system allows for a
multitiered account structure for account management institutions, which is not recognized under thecurrent system, and thus, further innovations in thesystem can be expected.

Current Depository and Book-Entry
Transfer System

New Dematerialized Book-Entry
Transfer System

Request for

Issuing company

Issuing company

Book of shareholders
Book of beneficial shareholders

Book of shareholders
General Shareholders

registration

Notice ofof name transfer

beneficial shareholders

Notification

JASDEC
Request for registrationof title transfer

Ledger ofparticipants’accounts

JASDEC

Account transfer

Stocks(deposits)

Ledger ofparticipants’accounts

Request forwithdrawal

Stocks(deliveries)

StocksParticipantsParticipants(Hold own stock
certificates or entrusts
them to securities companies)(securities companies, banks, etc.)(securities companies, banks, etc.)

Shareholders outside
the current depository andbook-entry transfer system

Stocks(deposits)

Request forwithdrawal

Stocks(deliveries)

Customers

Customers(beneficial shareholders)(beneficial shareholders)

14 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Transfer
Account

Account transfer

Direct Account Management Institution(securities companies, banks, etc.)

Transfer
Account

Direct Account Management Institution(securities companies, banks, etc.)

Indirect Account Management Institution(Indirect AMI)

ParticipantsParticipantsParticipants(Shareholders)(Shareholders)(Shareholders)Enhancing the flexibility of corporate financing policies
electronically in JASDEC’s database. JASDEC
will consolidate the management of the data which
is currently tracked by each issue and each custodian, respectively. Under the new system, General
Shareholders Notification can be sent to issuing
companies within three business days after therecord date, thereby streamlining administrative
procedures to identify shareholders more quickly
and efficiently.
Moreover, under the new system, issuing
companies are able to request JASDEC for
General Shareholders Notification, thereby
promptly recognizing the composition of theirshareholders. Thus, it leads to greater flexibility
for issuing companies for their IR activities andcorporate finance policy formulation.
In addition, issuing companies are able
to request JASDEC to submit information onwhether a certain individual or organization is on
Transfer Account Book. Shareholders, for theirparts, are entitled to request JASDEC to send

The stock market is by far Japan’s largest
securities market, both in terms of the number ofparticipants and the value of trading. The market
comprises a broad spectrum of participants,
including approximately 4,000 listed companies,
and around 50 million shareholders. To convert
this large market to a fully electronic system, large
investment was required. The dematerialization ofstock certificates, however, provides tremendous
efficiencies, much more than the investment. By
taking advantage of the opportunities offered bythis new environment, JASDEC is preparing avariety of new services.
Until now, issuing companies have had tobear substantial administrative costs for nameidentification, delivery of dividend payments, andprocedures involving corporate actions, such as
capital increase and exercise of voting rights.
In contrast, with the dematerialization ofstock certificates, names and addresses of a totalof 50 million shareholders’ data will be recorded

Outline of Greneral Shareholders Notification
Issuing company

Data transfer
Paper document

Book of shareholders
Comparison by shareholder reference code

Notification data after name identification(Character data)

Stock balance data after name identification(Numerical data)

JASDEC
interlink
Notification data

Data edit

Name identification
Participant information

Participant information

Participant information

Participant information

Shareholders’ information (standardized Chinese character data)
Data input
Account Management
Institution (AMI)

Data input
Account Management
Institution (AMI)

Data input
Account Management
Institution (AMI)

Daily stockbalance data
(Numerical data)

Data input
Account Management
Institution (AMI)

Participants (Shreholders)Japan Securities Depository Center, Inc. ANNUAL REPORT 200815

Special Feature on Dematerialization

notifications to the relevant issuing companies toconfirm the number of shares they hold, thereby
allowing them to exercise their rights as minority
shareholders.
The dematerialization of stock certificatesthus streamlines not only administrative tasks
of issuing companies but also shareholders’procedures for the exercise of their rights.

More convenient, efficient dividend payments
shareholders’ accounts at financial institutions
once they designate the accounts via JASDEC toissuing companies.
On top of the previous system, shareholders
also receive dividends through their accounts at
account management institutions of their securities.
In such cases, the issuing companies can pay
the total amount of dividends collectively to theaccount management institutions which deliver thedividends to each shareholder’s account, respectively. This new framework of dividend

By the dematerialization of stock certificates,
dividend payments also become more convenientand efficient. Under the current system, dividends
are paid through bank transfer into shareholders’accounts at financial institutions or using dividend
warrants sent to shareholders. However, thedividend warrants are occasionally lost, and thedividend payment is not properly completed.
After implementation of new system, in addition
to existing procedures, shareholders could receive
dividends from issuing companies throughDividend payment method under dematerialized system
Current system
Payment to a shareholder
submitting adividend warrant

Added options for shareholders after dematerialization

Payment through bank transfar

Mediation of designation of dividend receiving
accounts

Method for proportionate allocation ofdividends based on the number of shares(including bank account registration to receive dividends)

Issuing companies (Transfer Agents)
Intermediary services
CalculatingBankof beneficiary-designation the proportionate transfer
allocation
for dividend paymentson behalf of dividend-paying
companies

Intermediary servicesof beneficiary-designation
for dividend paymentson behalf of dividend-paying
companies
Dividend warrant

Beneficiary-designationBank
form for receiving
transfer
accounts of dividend
payments

Banktransfer

JASDEC
Beneficiary-designation
form for receiving
accounts of dividend
payments

Shareholder A

Shareholder B

Financial institution

16 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Shareholder C

Financial institution

JASDEC
Beneficiary-designation
form for receiving
accounts of dividend
payments

Shareholder
D

Account management
institution

Shareholder
E

ShareholderFpayment service would reduce cost and administrative procedures for issuing companies.
In this way, dematerialization of stock certificates would consolidate the management of a totalof 50 million shareholders and increase efficiency
for notification to shareholders by issuing companies and dividend payments.
Other than the new services we have describedabove, the new systems have possibilities for
improving the relationship between issuing

companies and shareholders. JASDEC will continue to further improve convenience for shareholders, issuing companies, and account management
institutions.

Promotion for shareholders to promptly deposit stock certificates withJASDEC through participants in custody under the new depository system
are being held by individuals, while another 12 billion stock certificates are being held by companies
in their vaults, respectively. These stock certificatesshould be deposited with JASDEC through participants by the time of the dematerialization. If thesestock certificates are not deposited with JASDEC
by the time of dematerialization, through accountmanagement institutions, and the shareholders’names are registered on the Book of Shareholders,issuing companies will open special accounts forthese shareholders. Therefore, these shareholders
will not lose their status as shareholders. But, if
shareholders kept stock certificates without registering their own names until implementation dateof the dematerialization, issuing companies would
open the special accounts by names registered on

JASDEC has been developing the new system
in collaboration with related parties, including
account management institutions, issuing companies, stock exchanges, the Bank of Japan, andregulatory authorities. JASDEC are now taking thefinal stage of the preparations by drawing texts ofvarious regulations and manuals, and conducting
test runs of the system.
The remaining task is to keep every shareholder informed about dematerialization of stock
certificates. As of March 31, 2008, the percentageof shares in custody represented 84.3% of all outstanding shares listed on Japanese stock exchanges,
but some 46 billion stock certificates are not yet
deposited for participants, according to surveys in
March 2008. Of them, 13 billion stock certificates

Balance of stock certificates in custody(Millions of shares)

Shares in custody

400,000% Custody ratio
72

81

84

64

300,000
54

58

42

200,000

30,44429

21,9084

6

34262,128

23

14,108100,000

8

13
46,919077

1761,74784,443 108,064

129,774 157,074

191,562 203,181

320,090
281,914 303,382

228,201(FY)

Japan Securities Depository Center, Inc. ANNUAL REPORT 200817

Special Feature on Dematerialization

Book of Shareholders. After the dematerialization,such shareholders would have been involved incomplicated process to register their own names
and change the shareholders’ status. (In somecases, shareholders could actually lose their rights
to those shares.)
In order to avoid troubles caused by shareholders who rush to deposit their stock certificatesin the last minutes of the dematerialization,
JASDEC and regulatory authorities have asked
issuing companies and securities companies to send
leaflets to shareholders urging them to deposit theirstock certificates as soon as possible. Financial
institutions and some public organizations arealso appealing to shareholders for early depositby using posters and pamphlets. To publicize theissue of dematerialization among shareholders,

we conducted information meetings all over Japanand utilize media channels (television, radio,
newspapers and the newsletters of municipal
governments). We are also making efforts to raiseawareness of issuing companies regarding shares
held in their vaults, and are requesting prompt
deposit of these shares.

Valuable infrastructure in Japan’s society
Dematerialization of stock certificates will transform Japan’s securities markets. In the markets forinvestment trusts and corporate bonds where fully
dematerialized systems already started ahead ofthe equities market, new products which utilize the
new infrastructure have been introduced. As thescale of the equities market is much larger than thatof other securities, a number of new products and18 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008services can be expected to be launched rapidly.
Dematerialization of stock certificates will serve asa key infrastructure for society, thereby benefiting
not only the securities business but also Japan’s
economy.

Schedule for dematerialization of stock certificates and sale of stocks under the new system(Until the date of enforcement)

Case A

Case BFor stock certificates heldin securities companies as custody

For stock certificates held
at home in safe

Shareholders have already agreed to deposit stock
certificates with JASDEC

Shareholders intend to deposit stock certificates withsecurities companies as custody until the enforcement date

Shareholders intend to deposit stocks certificateswith JASDEC until the enforcement date1

Shares are registered in theBook of Shareholders under shareholders’ own nameShareholders will register their own namesby the enforcement date

At the time of sale of stocks

Special accounts 2 are opened
under the names of shareholders at
financial institutions designated byissuing companies, and the sharesare registered in the Transfer
Account Book.

Shareholders cansell their stocks
without
troublesome
procedures.

To sell stocks, shareholders needto transfer their shares from thespecial accounts to otheraccounts opened under their own
names at securities companies orother financial institutions.

Warning

At the time of transfer

Stocks are registered
for accounts held atsecurities
companies.

In an exceptional case,registered persons whosenames are in the special
accounts, sold the shares,
the rights of beneficial
shareholders may be lost.

Special accounts2 are opened atfinancial institutions designatedby issuing companies with theregistered name recorded in theBook of Shareholders

It is impossible to sell shares that are registered in thespecial accounts under the names of other persons. To
secure shareholders’ rights, it is necessary to ask theissuing companies to open special accounts in theirnames, and then to transfer these shares from otherpersons’ special accounts to your accounts3.

1

In a special two-week period which ends two weeks plus one business day before the enforcement date, a provision has been madeenabling securities companies and other financial institutions to entrust stocks in their custody to JASDEC without approval of shareholders. (Following the entrustment of these stocks to JASDEC, securities companies and other financial institutions must contact
the shareholders involved without delay.) After this special period is over, shareholders will be prohibited by law from requesting
securities companies and other financial institutions to deposit or withdraw shares. For this reason, it is critical to arrange for prompt
deposit.

2

In standard practices, shareholders open accounts at financial institutions by submitting application forms. To open special accounts,
however, issuing companies have to apply to financial institutions for opening special account on behalf of shareholders.

3

Ways in which requests for share ownership can be made to issuing companies: 1) Submit a request jointly with persons whosenames are registered in the special accounts; 2) submit a request simultaneously with an order issued by qualified authorities for thetransfer of shares from the special accounts to the persons acquiring those shares; and 3) any other means provided for by the relevant
Finance Ministry ordinances.

Japan Securities Depository Center, Inc. ANNUAL REPORT 200819

Corporate Governance

Our Basic Policy on Corporate Governance
As Japan’s only central securities depository, JASDEC
basically operates its business with a social obligation
to provide a highly secure, efficient, and convenient
infrastructure for securities clearing and settlement. Our
principal policy on corporate governance requires us toensure that our systems meet the wide-ranging needs ofour clients, which include participants (securities companies, banks, and other users of our book-entry

transfer services) and investors. We also make sure that
our activities promote highly corporate transparency andthat our business operates with fairness and accountability, in line with the public needs of our function. As
an organization responsible for creating and operating
infrastructure of securities clearing and settlement inJapan, we strive to earn and maintain a solid reputation for
reliability.

Overview of implementation of corporate governance practices
Framework for management structure and corporate
governance to exercise business judgements, manage
operations and implement audits
Corporate Structure
Board of Directors The Board of Directors comprises 19
members and is basically structured to achieve a balanced
approach to business with user-oriented views, as wellas business-oriented ideas on maintaining operational
neutrality and fairness. To fully reflect the opinions ofusers in our operations, ten of the 14 external directors are
selected from JASDEC participants. The remaining four
external directors belong to issuing companies and relatedorganization, academia and the legal profession.
In principle, the Board meets once a month to decidebasic management policies and discuss other key issues.

Board of Auditors JASDEC has adopted a corporate
auditor system, as stipulated in Companies Act. The Board
of Auditors is made up of three auditors, two of whomare selected from eligible participants (one each from asecurities company and a bank) and all three (including
an auditor who is serving on a full-time basis) are external
auditors.
The Board of Auditors has a regular meeting eachmonth. In line with auditing plans and the basic policies
established by the Board of Auditors, auditors also attend
important meetings, including those of the Board of
Directors and will perform audits of directors by assessing
the status of services and assets to ascertain the validity
and reliability of directors in executing their respective
responsibilities.
To ensure that audits are effective, auditors areworking closely with directors, through communications
including meeting with the representative directors.

20 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Business Operational Committees To fully reflect theneeds of system users in our operations, the Board of
Directors established the Business Operational Committee.
The Committee independently examines important issues
related to the business of JASDEC, based on queries fromthe Board of Directors, and has eight subcommittees under
its control.
Each subcommittee is responsible for a specificsegment of operations, and comprises members who are
actually involved in the field. JASDEC applies the opinions
provided by each subcommittee to various operational issues
that will facilitate early realization of securities clearing
and settlement system reform in Japan. JASDEC properly
posts summaries of discussions and other information by
the committees on its website to foster greater operationaltransparency.
As a key infrastructure for the securities market, we are
increasingly focusing on an extremely high level of fairness
and accountability in our activities. To achieve this end,
we established the Advisory Committee, which comprises
experts in financial and securities systems. The committee
advices JASDEC’s president from a broaden perspective
about wide-ranging issues of securities clearing and settlement system operations.
JASDEC DVP Clearing Corporation (JDCC),JASDEC’s wholly-owned subsidiary, maintains a businessphilosophy similar to that of JASDEC. JDCC has also set
up a committee for reviewing important issues regarding
DVP operations to reflect the needs of users of the DVP
settlement system for NETDs. In addition, JASDEC’s Boardof Directors received reports regarding issues decided by
JDCC’s Board of Directors to ensure consistency in theactivities of the two companies.
An outline of JADSEC’s management structure andcorporate governance systems is presented next page.

Overview of JASDEC’s Management Structure and Corporate Governance Framework
General Shareholders’ Meeting
Appointments/
Dismissals

Appointments/Dismissals

Appointments/
Dismissals

Audit onoperation

Board of corporate auditors(Three including one standing auditor)
Auditing

Audit onoperation

Corporate auditors’
assistants

Board of directors(five full-time, 14 outside)

Subcommittees
Consultation
Opinions,
reports

Appointment/
Supervision

Existing BusinessCP
PSMS* (Domestic Trade)
PSMS* (Non-Residents’ Trade)
Corporate bonds
Investment trust
Dematerialization of Equities
Foreign stocks

President & CEO

Accounting auditors
Auditing

Business Operations Committee

Risk Management
Committee
Monitoring

Conveying
information

Compliance OfficeInternal audit

Departments

Risk Management System
JASDEC has set up a Risk Management Committee,
chaired by the president. It promotes to strengthen overallrisk management, and regularly monitors internal control
systems for various risks.
Internal Audits, Corporate Audits, and Accounting Audits
JASDEC established the Compliance Office and issteadily reinforcing its internal audit by practical survey
based on the audit plan to ascertain the validity of business
operations. For corporate audits, standing auditor routinely
attends important meetings, such as those of the Board of
Directors and the Executive Committee (comprising managing directors) and examines circulars intended to getapprovals of decisions by persons in charge. The standing
auditor performs audits in accordance with the auditing
plans established by the Board of Auditors, and reports
other corporate auditors with updates on the progress ofauditing activities at the meeting of corporate auditors,
which is scheduled to take place monthly.
Auditors serving on a part-time basis attend Board of
Directors’ meetings and check the responsibilities carriedout by directors. They also assess the legality by reviewing
reports from the full-time auditor on auditing activities.
JASDEC assigns staff specifically to assist corporate
auditors in their audits.
Corporate auditors perform audits in close cooperation with the Company’s accounting auditors. This
includes hearing reports from accounting auditors on
auditing plans and the results of the audits.
JASDEC has two certified public accountants who
perform accounting audits for JASDEC in the capacityof accounting auditor under Companies Act: Yohei Kishi
and Naoto Saito (designated partners under Article 34,

AdviceAdvisory Committee

Paragraph 10-4 of the Certified Public Accountant Law).
They are employed by Ernst & Young ShinNihon, a member firm of Ernst & Young Global, and execute accounting
audits, including checks of financial documents, basedon the Companies Act. Mr. Kishi and Mr. Saito areassisted in their accounting audit by seven certified public
accountants and 13 others (junior accountants and otherassistants).
We recognize that no items of particular regard, suchas serious irregularities or instances of illegal behavior,have been found through the execution of accounting
audits.
Directors’ and Corporate Auditors’ Limit of Liability
To fully demonstrate the skills involved in successfully
executing the responsibilities of directors and corporate
auditors, and to retain top-level professionals, limits havebeen set on liability for damages incurred by directors andcorporate auditors.
Resolutions on Election/Dismissal of Directors
The election of directors by resolution at the general
meeting of shareholders is conducted in the presence ofshareholders representing no less than one-third of voting
rights held by eligible shareholders, and directors areelected by a majority vote of said shareholders.
The dismissal of directors by resolution at a general
meeting of shareholders is conducted in the presence ofshareholders representing no less than one-third of voting
rights held by eligible shareholders, and directors are
dismissed on a vote of no less than two-thirds of voting
rights held by said shareholders.

Japan Securities Depository Center, Inc. ANNUAL REPORT 200821

Board Members and Auditors (As of July 1, 2008)

President & CEO

Yoshinobu Takeuchi

Board of Directors

President, JASDEC DVP
Clearing Corporation

Japan Securities Depository Center, Inc.

Director

Director

Director

Director

Director

Junichi Kitamura

Masakazu Kubota

Masahiko Koyanagi

Takashi Sato

Koichi Suzuki

Managing Director,
Head of Operations,
Nikko Citigroup Limited

Managing Director,
Japan Business Federation

Executive Officer
Japan Securities Dealers Association

Managing Executive Officer,
Mizuho Corporate Bank, Ltd.

Director and Senior
Executive Officer,
Chuo Mitsui Asset Trustand Banking Company, Ltd.

Director

Director

Director

Director

Director

Shigeyuki Maeda

Kenichi Miki

Hironaga Miyama

Eiko Morita

Taihei Yuki

Professor of Law,
Professional School of Law (Law School),
Professional Course in Law
Gakushuin University

Senior Executive Officer,
Daiwa Securities SNBC Co., Ltd.

Senior Executive Officer,
Tokyo Stock Exchange, Inc.

Director,
Head of Operation
Deutsche Securities Inc.

Managing Director,
Mitsubishi UFJ Trustand Banking Corporation

22 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Managing Director

Managing Director

Managing Director

Managing Director

Shoji Murata

Shigeru Omae

Seikichi Ihara

Yoshinori Seyama

Managing Director,
JASDEC DVP Clearing
Corporation

Managing Director,
JASDEC DVP Clearing
Corporation

Managing Director,
JASDEC DVP Clearing
Corporation

Managing Director,
JASDEC DVP Clearing Corporation
Director, Tosho System Service Co., Ltd.

Director

Director

Director

Director

Masaru Takei

Hiroshi Tanaka

Kunihisa Hama

Ryusaburo Harasawa

Managing Director,
Tokyo ElectricPower Company

Executive Managing Director
Representative EO
Compliance Division, Internal
Administration Supervisor
Nomura Securities Co., Ltd.

LawyerManaging Director,
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.

Auditors

Standing Auditor

Auditor

Auditor

Akemi Sasaki

Takeshi Kusakabe

Hiroshi Kobayashi

Auditor, JASDEC DVP Clearing
Corporation
Auditor, Tosho System Service Co., Ltd.

Advisor,
Shinko Securities Co., Ltd.

Director and General Manager,
Planning Dept., Investment Banking
Unit,
Sumitomo Mitsui Banking Corporation

Japan Securities Depository Center, Inc. ANNUAL REPORT 200823

Business Overview

We are making steady progressin preparations for our planned
launch of the new system next year.

Yoshimasa Oba
Director
General Administration Dept.

Custody and Book-Entry Transfer System
for Stock Certificates
24 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Looking ahead to transition to dematerization of stock
certificates, we are streamlining transaction procedures.
Under the depository and book-entry transfer
system for stock certificates, depository of securities is centralized in JASDEC, Japan’s only central
securities depository. The settlement of securities is
processed through book-entry transfer in accounts
at JASDEC or participants, without handling ofactual stock certificates.

With dematerialization of stock certificatesin January 2009, (see the Special Feature on“Dematerialization” which starts on page 12), a
new book-entry transfer system starts. Under the
new system, stock certificates will no longer bedeposited or withdrawn, but instead, ownership ofstocks shall be determined by electronic records
in the computer system of JASDEC and accountmanagement institutions.

Stock Certificates
Number of Eligible Issuing Companies/Shares in Custody(Companies)

Number of companies

4,000
2,654

2,565

3,000

2,804

3,626

3,616

3,498

3,366

3,287

3,228

3,116

2,977

3,666

3,758

3,952

3,838

3,948

2,000
1,000
0

Custody balance
Number of uncertificated shares
Custody ratio (%)(Million shares)

400,000
300,000
200,000

21,908100,0004
030,4448

684,443 108,064

Uncertificated partof shares incustody

23

6,663

17,961 30,581

44,05954,22673,58595,557 105,490

100
80

157,756

34

29

84

81

77

64

58

42
17

281,914 303,382 320,090

72
54

13

228,201 262,128

129,774 157,074

61,747

46,91914,108

191,562 203,181

173,456

192,117

128,577

211,037

Uncertificatedpart of shares incustody

60
40
20
0

(FY)

Uncertificated shares in custody are ones that JASDEC has offered not to possess shares certificates to issuing companies.

Deposits and Withdrawals
Number of shares deposited
Number of shares withdrawn
Withdrawals to deposit ratio (%)(Million shares)

60,00044,17546.5

40,00053,21745,38036,23440.1

42.3

12,510(FY)

21,72745,83837,348

9,649

12,328
7,491

53.0

60

35,912
31,52530,775
20,771

31.9

33.0

28.5

40,55751.2

34,97621.4

10,52480

49,84033,78625,875

38.6
19.8

14,52420,00069.0
37,49427.6 20,025

20,553

056,21547,325

15,913
15.1
6,907

21.6

16,7

40.2
24,611
14,445 20.8

5,135

5,321

40
18,331
16,708

20

3,820
0

Note: The number of shares indicated by the dotted line excludes the amount in shares deposited primarily because of a stock split, stocks for transfer, share exchanges, or as a result of a merger.
(Not available prior to fiscal 1999.)

Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

25

Custody and Book-Entry Transfer System for Stock Certificates

Ahead of dematerialization of stock certificates,
we inaugurated book-entry transfer system forexchange traded funds (ETFs) in January 2008. ETF
is an investment trust that tracks stock price index, andis traded on stock exchanges. Composition of ETFs
requires a notification to specify index to be linked with.
In accordance with increased such notification, new
ETFs have been introduced, and the numbers of ETFs
are increased. The convenience of ETF transactions,improved by the book-entry transfer system, has also
contributed to their growth.

In fiscal 2007 ended March 31, 2008, along withpreparations for the new system, we were working to
improve the efficiency of administrative operations in
the current system and expand our services.
Part of our efforts to enhance efficiency, especiallyfor exchange of information between JASDEC andissuing companies, includes the use of a JASDEC
site set up within the Target which has been used
for data distribution to participants. Through the
JASDEC site, JASDEC began providing information toissuing companies from December 2007, and issuing
companies are able to submit various applications
to JASDEC from February 2008. This enables us tocreate a secure and efficient framework for sending andreceiving information, thereby reducing the burden of
administrative operations at issuing companies.

Book-Entry Transfer for Stock CertificatesParticipants and Accounts (as of March 31, 2008)
Participants by category

Number of accounts by category

Life &
non-life insurancecompanies
7 (3%)

Securities financecompanies
7 (1%)
Stock exchanges &others29 (4%)

Life &
non-life insurancecompanies
9 (1%)

Securities finance companies
3 (1%)
Stock exchanges& others
14 (5%)

Banks, etc.
35 (12%)

Total
companies

Total

Banks, etc.
181 (26%)

Securities
companies
227 (79%)286

Securities
companies
476 (68%)702

accounts

Note: “Banks, etc.” include The Norinchukin Bank, Tokyo Shoken Shinyou Kumiai, andTokyo Bankers Association. “Stock exchanges & others” 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)Book-entry transfers(Billion shares)

Stock exchanges, etc.
Non-exchange transaction deliveries (NETDs)

800

727.6
632.4
514.1

600
400
107.6
122.7
91.9
51.3
32.2

200
0

638.1

125.7

125.9

148.9

151.5

170.6
51.1

75.6

(FY)

26 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

113.0

205.0
248.3

192.8

205.2
279.0

442.7

239.2
308.9

355.0
225.8

312.0

338.6

421.1

373.9

378.1

Convertible Bonds (CBs)/Corporate Bonds with Subscription Warrants to New
Shares account balance and number of issues
Balance in custody
Number of issues(Billion yen)

(Issues)

4,302

5,000

300

2,604
207
1,689

2,000

158

1,540

117

1,545
116

146

1,000

0

1,550

1,408

1,559

115

1,537

115

1,530 1,453
114
114

1,460

1,451
103

103

1,460
104

1,459
104

200

1,451
104

1,408

102

96

96

100

Apr. May

(FY)

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan. Feb.

0

Mar.

Exchange Traded Fund (ETF) account balance and number of issues
Account unit balance
Number of issues(Million units)

5,000(Issues)

38

38

40

4,000
1,993
3,000

1,708
18

1,627

1,927

16

14

2,000

2,010

2,073

14

2,098

2,226

2,091

1,951

1,934

1,901

14

14

14

14

15

15

1,940

1,966

2,016

2,029

17

17

17

17

30
17

2,010

20
10

1,000
0

Apr. May

(FY)

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan. Feb.

0

Mar.

Real Estate Investment Trusts (REITs) account balance and number of issues
Account unit balance
Number of titles 6,785(Thousand units)

10,000(Issues)

43

8,000

6,875

7,602
44

5,177

43

7,027
43

7,168

7,150
43

43

7,185
43

7,303

7,485

7,487

7,487

7,546

7,602

43

44

44

44

44

44

60
44

34

3,450

6,000

6,914

40

2,359
18

4,000

14

20

2,000
0

Apr. May

(FY)

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan. Feb.

0

Mar.

Number of inquiries to the Securities Information Tracing System (SITRAS) (daily average)(Number of inquires)

160,572

200,000

67,81786,709100,000

68,22678,53460,71667,73582,57569,04070,731

63,16063,56379,06463,65485,57074,61760,91950,0000(FY)

Apr. May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan. Feb. Mar.

Japan Securities Depository Center, Inc. ANNUAL REPORT 200827

Business Overview

Providing necessary funds toexactly where needed. Acting a corerole in the Japanese economy.

Hiroshi Ikegami
Director
Bond and Commercial Paper Dept.

Book-Entry Transfer System for Corporate Bonds andCommercial Papers
28 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

For more seamless and secure financing
In March 2003, we launched a book-entry transfer
system for dematerialized commercial paper (CP)and for corporate bonds in January 2006. In eachsystem, custody procedures—issuance, transfer(trading), and redemption—proceed based on thebalance recorded in transfer account books. In addition, all transactions related to issuance, transfer
and redemption of CP and corporate bonds, can beprocessed through the Bank of Japan’s Financial
Network System by DVP settlement system. By
linking the book-entry transfer system with our
PSMS (pre-settlement matching system (see page43)), we realize straight-through processing (STP),
which fully automates the entire process—including trade matching, and fund securities settlement.

Regarding participation in the JASDEC Bookentry Transfer System, we set up a multilayer holding structure for account management institutions(AMI) to address diverse needs of participating
investors and financial institutions. Direct AMI can
open an account directly at JASDEC, and indirect
participation is possible by opening an account at
an AMI. Another option for indirect participationis through the opening of an account at an indirect
AMI.
Interest payments inherent to corporate bonds
are made to holders of the rights indirectly, paid
into their accounts, after being passed on frompaying agents to AMI acting as the recipients, inaccordance with the multilayered structure.

Flowchart for book-entry transfer for Corporate Bonds (in the case of DVP)
Trade

Seller(provider)

Buyer(recipient)

JASDEC
Affirmation of trade

Affirmation of trade

Affirmation

Notice of settlement
matching status

Settlement matching
Settlement matchingsystemNotice of settlement
matching status

Settlement
parties

Settlement
Notice of recording

Notice of recording

parties

Securities transfers
Book-entry transfer systemfor corporate bonds

Securities transfer
noticeSecurities transfer
noticeNotice of receipt
completion

Payment instruction
Payment request

Fund
settlementcompany

Notice of receipt
completion

Bank of Japan
Payment instruction

Fund
settlementcompany(as of the end of March 2008)

Japan Securities Depository Center, Inc. ANNUAL REPORT 200829

Book-Entry Transfer System for Commercial Papers

Supporting finance activities of corporate entities, with a balance exceeding ¥20 trillion.
Commercial paper (CP) was originally drawn asa promissory note by operating companies as ameans for procuring short-term funds. The risks
involved in transfer and deposit of notes for large
amounts, as well as burden of documentary stamptax, have prompted requests for an electronic
book-entry system that eliminates the needs forpaper certificates. Thus, it became our first fully
electronic book-entry transfer system for dematerialized CP. Since the launch of the system five years
ago, all CP issued in Japan has been handled in thissystem. As of March 31, 2008, the total amountof CP using the system and the balance for the CP
reached ¥20 trillion (the record was a balance of¥23 trillion at the end of 2007) and 5,759 issues,
respectively, and the use of the system continues togrow. In October 2007, JASDEC began handling
CP for real estate investment trusts (REIT CP).
To improve market transparency, JASDEC
actively discloses information of settlement figures.
With regard to CP, the balance by issuer category
on a weekly basis has been disclosed in January
2008.

Balance of commercial paper by issuer category (Weekly)(Million yen)

Issuers(as of the end ofmonth/week)

Total
Numberof issues

AccountbalanceSecurities companies
Numberof issues

Accountbalance

Note:
SPCs include SPCs set up overseas
Others include securities finance companies, insurance companies, investment firms,
and Foreign companies (excluding SPCs).

30 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Banks
Numberof issues

AccountbalanceBusiness companies
Numberof issues

Accountbalance

SPCs
Numberof issues

Accountbalance

OthersNumberof issues

AccountbalanceParticipants of book-entry transfer for CP (as of the end of March 2008)
Issuing/
payingagents20

Issuers473
companies

Indirect
AMIs
11Participants(Direct AMIs)
67

JASDEC

Participants(CP holders)Fund settlement corporations 146

CP
Account balance and number of issues
Account balance
Number of issues(Trillion yen)

30

5,848

18.6

20

6,129

19.0

5,759
20.3

6,114

19.5

5,840 6,066
20.0

5,892

21.1

5,865 6,055

21.8

21.8

5,890

5,875

21.3

21.3

21.8

6,146
22.7

5,859 5,764

5,759(Issues)
7,000
6,000

22.4

22.1

20.3

5,000
4,000
3,000

10

1,314
257

2,000
4.9

1,000

1.4
0

(FY)

Apr. May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan. Feb. Mar.

0Working to further enhance system security
Settlement amount of issuance, transfer, andredemption of CP handled by JASDEC’s bookentry system exceeds ¥5 trillion per day, andmore than ¥10 trillion at the end of each month.
To achieve a higher level of security and prevent
disruptions of system operation in natural disasters
and other emergencies, we have established abackup center, along with our Business Continuity
Plan. We will continue making strenuous efforts tofurther enhance the security of our systems.

To ensure transparency and fairness of theCP market, we will upgrade the level of settlement
statistics data, as well as expand the products of
securities to help the market grow and respond touser requirements.

Japan Securities Depository Center, Inc. ANNUAL REPORT 200831

Book-Entry Transfer System for Corporate Bonds

Completing conversion of already-issued corporate bonds to thebook-entry transfers system, the balance exceeded ¥240 trillion.
The book-entry transfer system handles various
types of bonds, regardless of whether through public offerings or private placements. They include
corporate bonds, municipal bonds, bonds issued byinvestment firms, specified bonds issued by special
purpose companies (SPCs) and others, bonds ofspecial corporations, such as semi-government
and local government bodies, and Samurai bonds(yen-denominated bond issued by non-Japanesecompanies in Japan). Two years have passed since
the system was introduced, and the number ofbonds handled totaled 72,817 issues as of the endof March 2008, with the transaction balance of¥241 trillion. Conversion to a book-entry transfer
system for bonds issued prior to the introductionof the new book-entry transfer system (physicalbonds and registered bonds) was completed by theend of 2007, and nearly all outstanding bonds havebeen managed in the new system. Currently, almost
all of corporate bonds newly issued in Japan are
handled in this system.
With regard to Samurai bonds, issuance washalted in early 2006 over concerns that U.S. withholding tax would be imposed on Samurai bonds
issued by U.S. companies. However, imposition of
the U.S. withholding tax was avoided, and issuance
was resumed in January 2007, thereby marking thelargest issuance of Samurai bonds since 2000.
At the end of 2007, a new tax exemption

system of municipal bonds was introduced for nonresidents. As a long-awaited incentive for foreign
investors to invest in Japanese bond market, tax
exemption to nonresidents on the interest accrued
for corporate bonds has been requested. But the
tax exemption only for the interest on municipal
bonds was approved. As of the end of March 2008,¥100 billion worth of the approximately ¥60 trillion
worth was applied to this tax exemption system.
In May 2007, we conducted a survey toassess the convenience of the book-entry systemfor corporate bonds for users. According to thesurvey results, 60-70% of bond issuers recognized
reductions in costs for issuance and administration.
The majority of direct AMIs also indicated lower
costs for transfers as well as reduced burden of
administrative procedures involved in book-entry
transfer and payment of interest/repayment ofprincipal. In addition, the majority of agents anddirect AMIs gave high marks to the pre-settlement
matching system. We also received requests andsuggestions for enhancing the convenience of thesystem. We will use this feedback to make steady
improvements.

New issuances of Samurai bonds(Billion yen)

3,000

Samurai bonds issued by U.S. companies
Other Samurai bonds
Book-entry transfer for
corporate bonds commenced

2,000

1,174

1,018

513
415
0

(FY)

32 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

U.S. withholding tax
system impediment

287

1,000
503

601

Impedimentremoved/Function
halted on overseas
money markets

541

1,194

1,453

Book-entry transfer system for Corporate Bonds participants (as of the end of March 2008)
Issuing/
payingagents206

Issuers
2,262 companies
andorganizations

Participants(Direct AMI)
85

JASDEC

Indirect
AMI
379

Participants(Bondholders)

Indirect
AMI
7

Fund settlement corporations 14

Corporate Bonds
Outstanding balance and number of issues
Outstanding balance
Number of issues(Trillion yen)300

72,817(Issues)
65,81966,419 67,469

198.3

203.6

68,079 68,824

70,682 71,009

71,513 72,287 72,400 72,488

72,817

242.4

241.0

80,00065,456
241.0

200

181.3

208.4

212.8

217.9

224.7

230.8

237.4

240.8

242.1

60,00040,000100

19,27020,000
6.4

0

(FY)

Apr. May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan. Feb.

Mar.

0Working to enhance convenience, security and efficiency of our
book-entry transfer systems
We will continue our efforts to ensure the smooth
operation of the book-entry transfer system forcorporate bonds and improve convenience, security
and efficiency for further expanding corporate andmunicipal bonds markets. To promote globalization of Japan’s financial capital market, we will

expand the system for offering tax exemptions tononresidents. We will also collaborate to upgrade
infrastructure for the Asian securities market,
including expansion of the Asian bond market byproviding JASDEC’s system know-how.

Japan Securities Depository Center, Inc. ANNUAL REPORT 200833

Business Overview

Trust us to protect yourvaluable assets

Shinji Suzuki
Director
Investment Trust Dept.

Book-Entry Transfer System for Investment Trusts
34 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

A faster, safer approach to investment trusts
Book-entry transfer system for investment trusts
is an electronic computer system of managing
beneficial rights of investment trusts*1.
Under the system, launched on January 4,
2007, beneficial certificates issued to beneficiaries
are dematerialized, and beneficial rights arerecorded electronically in the accounts of transfer
account books. This facilitates prompt creation,
extinction and transfer of beneficial rights, andlowers costs of issue and custody of physicalcertificates as well as risks of loss, theft or fraud.
In the transfer account books managed by
JASDEC, beneficial rights of investment trusts arerecorded in two kinds of sub accounts for JASDEC
participants (Account Management Institution(AMI), namely securities companies, banks orother fund distributors*2). One is “Self account” forbeneficial rights held by JASDEC participants. The
other is “Customer account” for the aggregate number of beneficial rights held by the beneficiaries
who have opened the accounts with AMI.
Beneficial rights held by respective

beneficiaries whose beneficial rights are recordedin customer accounts, are recorded in transfer
account books managed by AMI (“multilayer
structure”). AMIs are able to open accounts inother AMIs, not in JASDEC. They are called
indirect AMIs.
When orders are placed by investors withAMIs and fund distributors, AMIs make electronic
applications to JASDEC through the trustors (issuers of the investment trusts), enabling that bookentry transfer, creation or extinction of beneficial
rights shall be recorded in transfer account books
held at JASDEC and AMIs.
*1 “Investment trust managed by trustor”: A contract based investment
trust with three parties of trustor, trustee company (trust bank, etc)
and the beneficiary (investor in the investment trust). It accounts for alarge share of total investment trusts in Japan.
*2 Entities who open accounts on behalf of other persons.

Basic model of book-entry transfer system for investment trusts
Investors

Flow of funds
Flow of data

(Beneficiary)

Private vendor financial network systems/Fax

Issuers

Fund
distributors(Trustors)(securities firms,
banks, insurancecompanies, etc.)

AMI

Fund settlement
corporations
Participant ofBank of Japanfinancial network
systemJASDEC

Trustees

Bank of Japan
Japanese Bankers
Association financial
network system

Fund settlement
corporations
Participant ofBank of Japanfinancial network
systemJapan Securities Depository Center, Inc. ANNUAL REPORT 200835

Book-Entry Transfer System for Investment Trusts

Strong support from users
as fund settlement corporations of the Bank ofJapan financial network system, which handles
DVP settlement. Fund settlement systems in thebook-entry transfer system for investment trusts
include DVP settlement (using the Bank of Japanfinancial network system) and non-DVP settlement(using the Japanese Bankers Association financial
network system for online fund settlement among
financial institutions).
In the case of DVP settlement, JASDEC
links the book-entry of beneficial rights with fundsettlement on the computer system to eliminate thetime gap between fund settlement and subscriptionof rights, thereby reducing settlement risk. Use of
the DVP settlement, which involves less settlement
risk, has been increasing steadily among systemusers. In fiscal 2007, 23% of transactions used
DVP settlement. By value, the percentage rose to59%.

Since the system launched on January 4, 2007,nearly all trusts in the category of “investment
trusts managed by trusters” are handled by thesystem. At the end of fiscal year 2007 (ended
March 31, 2008), total number of the investment
trusts rose to 5,603 (3,091 publicly-offered and
2,512 privately-placed investment trusts), up 519
from the end of the previous fiscal year.
The account balance of principal also
increased to ¥105 trillion (¥75 trillion in publiclyoffered investment trusts and ¥30 trillion in
privately-placed investment trusts), an increase of¥12 trillion. All of 78 issuing and 12 trustee companies involved with investment trusts managed
by truters are now using the system. The numberof JASDEC participant companies (direct AMIs)
who have opened accounts with JASDEC and thenumber of indirect AMIs reached 186 and 701,
respectively.
45 institutions are participating in the system

Book-Entry Transfer for Investment Trusts
Account balance and number of funds
Account balance
Number of issues (as of the end of term or month)(Trillion yen)

150

5,084

5,603

5,114

105.9
93.1

94.8

5,141
96.9

5,204
99.3

5,224

5,277

101.4

102.2

5,325

5,367

5,424

5,466

5,501

5,556

5,603

103.2

103.9

104.8

105.6

106.1

106.2

105.9

(Funds)
6,000

100

4,000

50

2,000

0

Apr.

(FY)

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

0

Note: Transactions of less than 1 trillion shares are rounded to the nearest 1 trillion.

Account balance is sum of principal

Purchase and Redemption Transaction (Daily average)(Transactions)
8,000

Purchase
Redemption

6,000

5,254
5,249
4,953
4,765

5,487
4,995
4,780
4,319

5,738
5,729
5,385
5,232
5,081

4,839
4,774

4,901
4,788
4,816
5,366
5,041
4,816
5,601
5,407
5,310
5,275
5,122
4,753
4,723

4,000

2,000

0

(FY)

Apr.

36 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Book-entry transfer for Investment Trusts
Participants(as of March 31, 2008: Numbers in parenthesis show the numbers at the start of system)

Issuers 78 (73)

Trustees 12 (12)JASDECJASDEC Participants 186 (179)Fund settlement corporations 45 (45)Participants in Bank of Japan financial network system

Designated fund distributors

383 (369)
Indirect AMIs 701 (657)

Indirect AMIs

JASDEC Participants
Banks andinsurancecompanies
116 (16%)

Total

701

Others8 (4%)
Financial institutions
for smallbusinesses*
8 (4%)

Total

Securities
companies
95 (14%)

Investment trust
management companies
6 (3%)
Banks andinsurancecompanies
44 (24%)186

Financial institutions
for small businesses*
490 (70%)

Securities
companies
120 (65%)*Sinkin banks, Credit cooperatives, Agricultural cooperatives, Labor banks, etc.

For further improvement of the system
By the Amendment of the Trust Law enacted on
September 30, 2007, consolidation (merger) ofinvestment trusts became possible. JASDEC set up
practical procedures for the merger, and, on thisbasis, the operation rules have been amended. In
addition, amendment of the Law Concerning Bookentry Transfer of Corporate Bonds and Stocks, etc.,
has enabled the split and merger of beneficial rights
in 2009, and JASDEC has set up an outline of theprocessing methods and published it.
In fiscal year 2008 (ending March 31, 2009),

ahead of the amended Law Concerning Book-entry
Transfer of Corporate Bonds and Stocks, etc., weare taking necessary measures, such as adding
functions to computer system and amending
operational rules, to make the split and merger ofbeneficial rights available. And also by analyzing
results of a questionnaire survey to system users
carried out in February 2008, JASDEC continues
further efforts to improve the book-entry transfer
system for investment trusts.

Japan Securities Depository Center, Inc. ANNUAL REPORT 200837

Business Overview

Providing secure and reliable
services

Joji Okuma
Director
Business Administration Dept.
JASDEC DVP Clearing Corporation

DVP Settlement Services for NETDs
38 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Improving the security and reliability of non-exchange transactiondeliveries (NETDs)
DVP Settlement Services for NETDs means transfer and settlement for non-exchange transactiondeliveries. Transactions using the DVP settlement
services for NTEDs largely consist of trading byinstitutional investors of Japan and overseas for the
trading of Japanese stocks and other securities.
Up to now, in non-exchange trades, transfers
and fund settlement have generally been separately
processed, and exposed to principal risk — the riskthat a counterparty who delivers securities does notreceive the payment, and vice versa. DVP transfer
system reduces these risks by linking stock-certificate
transfers with payments on the system, thereby
achieving secure and reliable settlement. When
JASDEC also facilitates STP (Straight-throughprocessing) which electronically automates all theprocesses related to administrative procedures.
The DVP transfer system has been operated
since May 2004 by JASDEC DVP Clearing
Corporation (JDCC), a wholly-owned subsidiaryof JASDEC. Participants who are in JASDEC’s
securities custody and book-entry transfer systemand prefer the DVP system have to register forparticipation in the DVP system, as well as receive
the approval from JDCC. To manage risks ofparticipants rigorously, JDCC requests participants
to provide, as collateral, assets with carrying value
exceeding the total amount of accounts payable(assured assets), and sets a limit for the total of
accounts payable reflecting financial records ofeach participant (Net Debit Cap).
The DVP Settlements for NETDs are
conducted by the gross-net type DVP model.
Securities are transferred on gross basis from theseller’s account to buyer’s account through JDCC’s
accounts. Meanwhile, payment is done as a lumpsum on a net transaction basis at each settlementday, through a current account held with JDCC
under the Bank of Japan financial network system.

Reducing principal risk by using the DVP settlement method(as of March 31, 2008)

Delivery of securities
SellerTransfer of securities and payment carried out separately

Buyer

Payment of settlement amount
Use of DVP settlement
Account delivery through JDCC
Seller’s
account

Securities
certificate data

Account of
JASDEC DVP Clearing Corp.

Securities
certificate data

Buyer’s
account

Stock-certificate delivery 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 2008

39

DVP Settlement Services for NETDs

As DVP system becomes widespread, number of users increases
The DVP settlement services for NETDs mainly
covers securities handled by JASDEC under its
depository and book-entry transfer system. In
fiscal 2007, a regulatory framework was set up
for handling Japanese Deposit Receipts (JDR)
and commodity ETF products in the DVP transfer
system.
In March 2007, JASDEC compiled a reporton “Recommendations for central counterparties”
suggested by the Committee on Payment andSettlement Systems (CPSS) of the Bank forInternational Settlements and the special committeeof the International Organization of Securities
Commissions (IOSCO). Last August, the English
version was released. The report demonstrates thatJDCC satisfies global standards of transparency,

risk management systems and financial fundamentals for clearing counterparty.
At the end of fiscal year 2007 (ended March
31, 2008), participants in the DVP service totaled
60 companies (16 banks and 44 securities companies). As the system become widely used, average
daily volume of transfers under the system in fiscal
2007 increased by 6,524 year on year basis to87,185. As JDCC gained economies of scale fromvolume growth, ¥12 for every ¥30 spent commission per DVP transfers was returned to participants
as rebates from the commission revenues in fiscal
2007. In April 2008, commission per transaction
using the DVP settlement was lowered by ¥5 to¥25.

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

200,000

67,25559,660150,000

100,000
80,661

87,18571,22370,74563,18462,461

82,63164,241

87,69061,78083,76680,28966,294

69,18872,14170,18974,82760,48892,84787,33097,40287,49986,95096,922

86,21074,53750,000

0

(FY)

Apr.

May

Jun.

Jul.

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

40 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

DVP Settlement for NETDs
Fund settlement (Daily average)
Total of payments
Total value of net settlement payments
Rate of reduction (Total value of net settlement payments/Total of payments × 100)

(Billion yen)

2,500

40.0

2,000

1,684

1,804

1,923

2,041

1,974

1,961

1,911

1,794

1,741

1,747
1,539

1,742

1,646

30.0

1,525

1,500
20.0
1,000

11.0

10.2

9.5

11.5

10.4

227

186

9.7

10.7

9.0

13.4

10.3

11.6

10.2

8.8

196

202

167

153

10.0

500
0

10.4

184
(FY)

184

176
Apr.

183
May

Jun.

Jul.

198
Aug.

177

165
Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

203
Mar.

0

Securities covered: stock certificates, convertible bonds, investment securities, preferred securities, beneficiary certificates of investment trusts
Total of payments is the total amount used for execution of security transfers
Total value of net settlement payments is the total amount used for account settlement on a net transaction basis

Dematerialization of stock certificates will increase
convenience for users
With dematerialization of stock certificates inJanuary 2009, further increase in use of the DVP
for NETDs is expected. JDCC is taking this opportunity to further increase customer convenience. On
top of launching the services for foreign stocks andother instruments previously not covered by thesystem, we will address transforming statementsof balances of collateral deposited by DVP participants with JDCC into electric records.
For cash entrusted as collateral (deposits
received for clearing), with the dematerializationof stock certificates, any increase or decrease insums provided by participants will be reflected on
the same day, instead of the following day, andredemption of the collateral will be also processed
immediately upon participants’ request. We willcontinue promoting efficiency of fund operations
for participants.
With regard to frameworks for amount of
payment limit under the net settlement system
by individual participants, we are examining
appropriate standards, based on discussions withparticipants, and interest-rate levels.

Japan Securities Depository Center, Inc. ANNUAL REPORT 200841

Business Overview

The world’s fastest PSMS

Shunichiro Unno
Deputy Director
Business Planning Dept.

Pre-Settlement Matching System (PSMS)
42 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Providing matching services through advanced technology
Matching services are needed for institutional
investors’ transactions as the wide range oforganizations such as investment trust managementcompanies, investment advisory companies, securities companies and trust banks are involved andthe huge amount of transaction data is exchanged
among them. In the past, matching was done manually by faxes or telephone calls. Now, the process
is being computerized and automated. JASDEC
provides matching services using the highly
advanced computer systems named Pre-Settlement
Matching System (PSMS).
For domestic transactions, PSMS provides
both trade matching service and settlement matching service. The former service is used between
investment trust management companies/investment advisory companies and securities companies
to reconcile the contents of each trade such as
traded securities, price, volume, date and otherdetails. The latter service is used between trustbanks and securities companies to reconcile theaccount numbers and other details before they settle
the trade. In the trade matching, data sent fromboth sides are matched centrally on PSMS (central
matching), which is faster and more accurate thanthe prevailing overseas method in which data goesback and forth between the parties involved. In
the settlement matching, settlement instructions
are automatically generated and matched in PSMS
using a Standing Settlement Instructions Databasein which account numbers and other details havebeen preregistered and the matched settlement
instructions are automatically sent to each transfer
system at the same time.
With transactions by non-residents, settlement
instructions sent by sub-custodians which arereceived from global custodians are centrally
matched with corresponding data sent by securities
companies on PSMS.

PSMS (for non-resident transactions)
Overseas
Order

GlobalcustodiansJapan

Settlement instruction

Settlement instruction

Settlement instruction

Subcustodians

Notice ofmatching status

Investment
managers

Securities
companies

Notice ofexecution
Matching

Settlement instruction

Order

Notice ofexecution

Pre-settlement Settlement instruction Securities
matching
companies
systemNotice ofmatching status
Request for DVP transfer

Linkage with book-entry transfer systems for Stocks and CBs,
Corporate Bonds and CPs (excluding Japanese Government Bonds)

Notice ofexecution

Order

Stock
exchanges

Japan Securities Depository Center, Inc. ANNUAL REPORT 200843

Pre-Settlement Matching System (PSMS)

Input/output transactions hit record daily highFor securities clearing and settlement, three days
after a trade (T+3 settlement) is currently thenorm. JASDEC’s goal is completion of matchingon the day of the trade (T+0 matching), to enable
settlements on the following day of the trade(T+1 settlement). As for the domestic trades atpresent over 99.9% of the trades are matched on
T+0 by adopting central matching. With open-end
investment trusts, it is necessary to calculate the net
asset value day by day, so T+0 matching greatly
facilitates their management.
Since launching PSMS in September 2001,
JASDEC has been increasing the range of asset
class and services PSMS covers. In October
2007, we launched matching services for stock

lending/borrowing transactions. By expanding therange of system users, we have made this service
available not only to financial institutions but also
to industrial companies if they are qualified as designated investors under the Financial Instruments
and Exchange Act.
In line with our expansion of the range ofasset class, services and system users, the numberof users has been increasing annually. In fiscal
2007, the number of input/output transactions roseto the all-time record high (daily average basis) of
1,337,934. As of March 31, 2008, users numbered
525.

Centralized matching method for three parties (domestic transactions)
Securities exchanges
Notice of execution

Investment
trust management/
advisory
companies

Order

Order
Notice of execution
Allocation

Pre-settlement
matching system
Investment instruction
Notice of matching status

Trade report

Trade matching
Notice of matching status

Investment instruction and trade report

Notice of trade report affirming status

Affirmation/
Disaffirmation

Notice of trade reportaffirming status

SSI

Trust banks

Notice of matching status

Settlement
matching

Notice of matching status

Request for DVP transfer

Linkage with book-entry transfer systems for Stocks and CBs,
Corporate Bonds and CPs (excluding Japanese Government Bonds)

44 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Securities
companies

Total number of PSMS input/output instructions using the PSMS system (Daily average)(Thousand)

1,500

1,362
1,154

1,236

1,465

1,421
1,313

1,321

1,312

Apr.

May

Jun.

1,372
1,250

1,245

1,435

1,463

1,408

1,308

1,200
900
600
300
0

(FY)

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

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

International Standardization
The internationalization of securities markets is
proceeding rapidly. We have created a system
tailored to meet unique needs in Japan, but which
also works in conformity with international
standards. In future, to improve market participants’ efficiency and increase the number of theparticipants, we believe it will be necessary toconsider creating a system which lends itself tointernational standards at all times and also havedirect connection overseas. In fiscal 2007, JASDEC
launched a project to achieve full conformity withinternational standards.
With regard to message formats, introduction of ISO20022, which is the next generation
format to replace the current ISO15022, is underdiscussion globally. JASDEC became a memberof a group of the International Organization forStandardization where ISO20022 is discussed, andas such we ensure that conditions prevailing inJapan are reflected in it. With regard to networks,
our aim is to introduce the SWIFT network which
is widely used overseas while running existing systems in parallel, enabling users to choose between
them.
Introduction of the SWIFT network will, we
believe, enable smooth overseas connectivity, further increasing users’ convenience and the numberof the participants. By expanding the range of asset
class and services handled by PSMS and steadilybuilding conformity with international standards,
we are contributing to still greater efficiency inJapan’s securities markets.

Japan Securities Depository Center, Inc. ANNUAL REPORT 200845

Business Overview

Providing worry-free settlements
for foreign share transactions

Kazuhiro Nishimukai
Director
International Dept.

Custody Services for Foreign Stocks
46 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Serving convenient, safe and reliable settlement for foreign stocks
from dividend-payment handling bank. JASDEC
also undertakes necessary procedures regarding
dividend taxation for local tax authorities to ensure
reduced tax rates under taxation agreements withthe countries concerned.
Voting rights at general meetings of shareholders can also be exercised by the beneficial
shareholders through instructions issued to
JASDEC.
JASDEC thus provides infrastructure andservices necessary for reliable settlement for trading activities of foreign stock certificates, smooth
exercise of shareholder rights and error-free receipt
of dividends and other payments.
We plan to introduce new systems andservices in January 2009, including a highly
convenient system for foreign stocks which enablestransfer settlements using DVP for NETD as wellas provides participants’ dividend payment data.

In addition to Japanese stock certificates listed on
the domestic stock exchanges, since April 2006,
JASDEC has offered services of custody, transfer
and ownership rights processing for foreign stocks.
Generally, foreign stock certificates aredeposited with central securities depositories orcustodians in each country where issuing companies were established. Settlements of transactions at
the stock exchanges in Japan are conducted throughtransfer accounts among participants in JASDEC.
JASDEC entrusts dividend payments torelevant share-handing service organizations.
Information of shareholders (beneficial shareholders) at the record date for dividend is transferredto share-handling service organizations by the
JASDEC participants through JASDEC. Basedon the information, the share-handling service
organizations calculate the amount of dividends,
and, following the calculation results, dividends
are paid directly to the beneficial shareholders

Overview of the new system relating to foreign stocks (effective in January 2009)
Foreign stocks
Share-handling services organization (trust banks)

Notice ofbeneficial
shareholders

Beneficial
shareholder
reportDividend
information

Overseas
CSDs/custodian banks

Stockexchange
DVP

Dividend
information

Shareholder notice host(handling of information concerningbeneficial shareholders, dividends etc.)

Collateralmatching

Japan Securities Clearing Corporation

Notice ofbalance

Account transfer host (settlement)

Standard
non-DVP
transfer

Standard
DVP transfer

Foreign stock(communication
server with foreign
CSDs/banks)

Local
custody/transfer

AMIs (Securities firms and banks)

Beneficial shareholders of foreign stock certificates etc.

Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

47

Custody Services for Foreign Stocks

Supporting smooth implementation of triangular share exchange
In January 2008, Citigroup Inc. (Citigroup)of the United States acquired Nikko Cordial
Corporation through a triangular share exchange*,
following liberalization of such transaction by anamendment of the Corporate Law in May 2007.
This was the first case in which two companies
listed on Japanese securities exchange wereinvolved in a cross-border share exchange. Afteran announcement of the share exchange in October
2007, JASDEC held meetings with all parties
involved and discussed mechanisms ensuring thesmooth implementation. In the triangular merger,
JASDEC focused on the fast and efficient transaction of share exchange through JASDEC, by allotting shares of Citigroup to shareholders of Nikko
Cordial, as well as recording the shareholders’entries in the Citigroup’s Book of Shareholders.

At the end of March 2008, the total number of foreign stocks handled by JASDEC was 31. In recent
years, foreign companies have come to regard
Japan as a major market for their financing. There
have been listings only on the Tokyo or Osaka
securities exchanges (no overseas listing), and also
listing in Japan of ETFs (Exchange-Traded Funds)
for overseas stocks. We expect further diversification of products and increase of trading volume forforeign stocks handled by us.
Considering these situations, JASDEC isdeveloping business alliances with other central
securities depositories (CSDs), which have similarfunctions to JASDEC in overseas markets. In
November 2007, we entered into a business alliance with Korea Securities Depository, targetingcustody business relating to listing of Koreanstocks on the Japanese securities exchanges. Basedon this partnership, we launched services for ETF
of the South Korean stocks in the same month. In
addition, in March 2008, we made amendment ofrules to enable custody services for foreign securities ETFs.

*A merger through exchange of stocks, in which shareholders of thetarget company are entitled to receive shares of the parent company of thesurviving entity. In a triangular merger, the target company becomes awholly-owned subsidiary of the surviving company, which the acquiring
company forms as a subsidiary company.

Foreign stocks
Number of issues/Balance in accounts(Thousand shares)
150,000

Balance in accounts
Number of issues(Issues)
40

32

31

31

111,656
100,00031

31
110,585

109,929

98,271

92,86830
20

50,00010
0Nov.

48 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Dec.

Jan.

Feb.

Mar.

0

Number of shares deposite/Withdrawal
Number of shares deposite
Number of shares withdrawal(Thousand shares)

70,0009,020

67,346
16,4996,217

29,801

21,9596,161 4,807

4,730

2,500

5,899

2,221
1,888

2,000
1,403
1,500

1,103

1,000

0

(FY)

506

333

227

500

118

76

Apr.

May

Jun.

Jul.

Aug.

349
46

318
69

Sep.

Oct.

496
217
Nov.

Dec.

337

448

332

Jan.

Feb.

Mar.

Note: Transactions of less than 1 thousand shares are rounded up/down to the nearest thousand shares.

Account transfer
Non-exchange transaction transfer
Exchange transaction transfer(Thousand shares)

50,00049,995
16,10938,34815,493

11,489
8,665

8,000

6,817
5,820
5,074

6,000

4,569

4,461

4,000

2,988

2,825

4,119

3,589

3,286
1,918
1,170 1,306

2,000

1,574

1,354

Oct.

Nov.

3,556
2,994
2,358

3,387

Dec.

Feb.

2,445 2,151

430
0

(FY)

Apr.

May

Jun.

Jul.

Aug.

Sep.

Jan.

Mar.

Note: Transactions of less than 1 thousand shares are rounded up/down to the nearest thousand shares.

Promoting system reform and preparations for new system rollout
In fiscal 2008, we are proceeding with preparations
for system reform and launch of operations fora new system in January 2009. In addition, toincrease investment opportunities for investors inJapan, we continuously work to provide a broadarray of products.

Japan Securities Depository Center, Inc. ANNUAL REPORT 200849

International Relations

Co-host for 9th Conference of CSDs
JASDEC seeks and maintains strong partnerships
with central securities depositories (CDSs) aroundthe world. With overseas CDSs, JASDEC sets
up business relationships to deposit foreign stock
certificates. But that is not all. Collaborative
arrangements with overseas CSDs — exchange of
information and opinions concerning approaches toglobal issues in securities clearing and settlement,
compilation of the case studies, and transmissionof the know-how — have major significance forour operations. CSDs around the world thus meet
regularly at global or regional conventions forfurther communications.
In April 2007, JASDEC, Japan Securities
Clearing Corporation (JSCC), Korea Securities
Depository (KSD) and Taiwan Depository &Clearing Corporation (TDCC) co-hosted the 9th
Conference of CSDs in Seoul, South Korea. 216
participants from 97 CSDs and depository-related
institutions around the world gathered. The conferences are held once every two years. At the 9th

Conference, opinions on various topics, such as
promoting DVP and STP and new business ideas,
were actively discussed.
In September 2007, the Asia-Pacific CSD Group(ACG), consisting of CSDs and other organizationsin the Asia-Pacific region, held its 11th General
Meeting in Beijing. The general meeting of ACG
is held once every year. JASDEC drew strong
interest from overseas CSDs for its presentation on
demanterialization of stock certificates planned in
January 2009.
In November 2007, JASDEC hosted the Asian
region convention of the International Securities
Services Association (ISSA) in Tokyo. ISSA isan organization of institutions such as custodianbanks, clearing organizations, central depositories,
stock exchanges, securities companies, and asset
managers.

The First CSD Interim Meeting in Tokyo

MOU signing ceremony with CDC Pakistan

International Relations
50 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

With Mr. Muhammad Hanif CEO of CDC

Expanding partnerships with CSDs around the world
In April 2008, JASDEC hosted the first Interim
CSD Meeting. The interim meeting, of which
JASDEC proposed to hold during the previous
year’s CSD general meeting, is held in years when
there is no CSD general meeting, as a forum forrepresentatives of regional CSD associations. At
the Meeting, representatives of CSD groups fromfive regions around the world gathered. At a timeof rapid change in securities markets, this event
served as an important forum for exchange of
opinions and information.
In April, JASDEC signed an informationexchange cooperation agreement Memorandum ofUnderstanding with Central Depository Company
of Pakistan Ltd, in Tokyo. To date, JASDEC

signed similar agreements with DTCC, TDCC,
KSD and SD&C.* In addition, in May, JASDEC
signed cooperation agreements in Mumbai with
Central Depository Services (India) Limited andNational Securities Depository Limited of India.
To strengthen our capacity to distribute a broad
range of information, including updates on ourbusiness activities, we launched a quarterly publication of “JASDEC NEWSLETTER” in English
and Japanese in July 2008.
To further development of our products andservices, JASDEC has a lot to learn from overseas
experts. JASDEC will continue to actively seek
partnerships with CSDs around the world.
*DTCC (2003): U.S. Depository Trust and Clearing Corporation
TDCC (2004): Taiwan Depository & Clearing Corporation
KSD (2005): Korea Securities Depository
SD&C (2005): China Securities Depository and Clearing
Corporation limited

Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

51

Analysis of Business Performance and Financial Results

Business Overview
Fiscal 2007 Review
In the first half of the fiscal 2007, ended March 31,
2008, the corporate sector of the Japanese economy
benefited from buoyant external demand reported
good results. Capital investment maintained an
upward trend, while an improvement was also seenin the employment conditions. In the latter half,
however, the employment situation showed a lossof improvement momentum. By the fiscal year end,
faced with negative factors such as downside risks
in the U. S. economy, a surge in the price of crudeoil, and a sharp appreciation of the yen against theU. S. dollar, the corporate sector, which has been
the primary driver of growth, began to show signs
of weakness, and the recovery of the Japanese
economy eventually appears to be pausing.
In the Japanese securities markets, both thestock and corporate bond markets maintained
steady performance during the first six months in
response to solid fundamentals of the corporate sector. In the second half of the fiscal year, however,Japanese stock prices were affected by sparked
concerns in global financial markets in the wake of
the U. S. sub-prime loan crisis. The Nikkei Average
declined sharply, closing below the psychological¥12,000 level for the first time in two years andseven months.
Meanwhile, Tokyo Stock Exchange witnessed
active trading with average daily trading volume
of over two billion shares. Driven by the volume
growth, the number of shares handled by bookentry transfer system under JASDEC depository
and the custody balance increased steadily.

52 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Financial Results
Operating Income
As a result, income from account transfer
operations, on a consolidated basis, posted ¥13,603
million (up 5.1% year-over-year). The custodybalance also increased steadily, and income from
custody operations came to ¥5,781 million (up3.9% year-over-year). Operating income prior tocommission rebates was ¥28,027 million (up 8.2%
year-over-year) and commission rebates amounted
to ¥2,005 million (down 40.0% year-over-year).
Consequently, operating income amounted to¥26,022 million (up 15.3% year-over-year).
Operating Expenses
Operating expenses for fiscal 2007 amounted to¥21,729 million (up 21.5% year-over-year), due
to an increase of cost for the dematerialization ofstock certificates, which requires upgrading ofcomputer systems.
As JASDEC provides securities clearing
and settlement infrastructure, the depreciation
expenses relating to system maintenance amounted
to ¥12,578 million, which accounted for 57.9% of
total operating expenses.
Net Income
Net income for fiscal 2007 amounted to ¥1,547
million (down 41.6% year-over-year). Earnings per
share was ¥182,082.62.

Financial Conditions
Total assets as of March 31, 2008, on a consolidated basis, were down by ¥1,197 million from theprevious year-end, to ¥54,839 million. This was
mainly due to a reduction in designated assets forclearing funds for deposited at our consolidated
subsidiary JASDEC DVP Clearing Corporation for
securing safe settlements under the DVP settlement
system, although tools and furniture, as well as
development of software in progress of dematerialization for stock certificate were increased. The
assets and liabilities pertaining to participants’funds are presented as designated assets for clearing
funds and deposits received for clearing funds,
respectively. The balance was ¥29,884 million.
Net assets at the fiscal year-end stood at¥17,897 million, an increase of ¥1,207 million
year-over-year. This was mainly due to the increase
in retained earnings.
Net cash provided by operating activities
during this financial year, on a consolidated basis,came to ¥8,061 million, which includes income
before income taxes of ¥2,613 million, depreciation
and amortization of ¥5,604 million, and income tax
payments of ¥1,789 million.
Net cash used in investing activities amounted
to ¥11,128 million, mainly as a result of capital
investment for system of dematerialization forstock certificates. Net cash provided by financing

activities amounted to ¥2,060 million, as cash
outflow on dividend payments was more than offset
by short-term bank borrowings.
As a result of the foregoing, cash and cash
equivalents as of the fiscal year-end stood at ¥1,816
million, down by ¥1,007 million from the previous
year.
As Japan’s only central securities depository,
JASDEC maintains stable development of financial
operation with sound financial conditions and a
sufficient level of operating cash flow, in order toachieve its public mission of providing reliable
and certain infrastructure of securities clearing andsettlement.

Financial results (on a consolidated basis)(Million yen)

Operating income
Income from operation(Million yen)
4,000

30,00026,022
21,74520,000Net income
Net income per share( Yen )
400,000

365,197.98(Million yen)

Total assets
Net assets

80,000 73,585

311,995.13

68,517

3,121

22,5593,000

300,000

2,651

19,00356,03760,00054,839182,082.62
2,000

200,000

40,000100,000

20,0007th ( businessterm ( 001,547
121,511.06

10,000

1,050
4,777

4,635

5th

6th

4,368

1,000

11,46014,352

16,68917,8976th

7th ( businessterm (

1,805
0

4th

7th ( businessterm (

0

4th

5th

6th

4th

5th

Japan Securities Depository Center, Inc. ANNUAL REPORT 200853

Consolidated Financial Statements
Consolidated Balance Sheets (As of March 31, 2007 and 2008)¥ (thousands)$(thousands)(Note 4)
2008

2007

2008

¥ 2,824,047
3,455,111
154,648
34,715,413
286,80941,436,030¥ 1,816,676
3,072,097
156,655
29,884,895
356,531
35,286,855$ 18,132
30,663
1,564
298,2823,558
352,199

Less: Accumulated depreciation
Total Property and Equipment

823,700
5,481,521
790,457
7,095,680(3,957,153)
3,138,527

1,125,677
9,018,616—
10,144,293(6,262,276)
3,882,017

11,23590,015—
101,250(62,504)
38,746

Intangible Assets, Net:
SoftwareConstruction in progress (Software)
Other intangible assets
Total Intangible Assets

8,816,461
1,915,654
11,676
10,743,792

7,171,014
6,586,807
14,882
13,772,704

71,57465,743
149
137,466

Investment and Other Assets:
Investment securities
Long—term refundable lease deposits
Long—term prepaid expenses
Deferred income taxes (Note 11)
Total Investment and Other Assets—
435,50259,829223,650
718,982336,647
514,775
109,154937,233
1,897,811

3,360
5,138
1,089
9,355
18,942¥ 56,037,333¥ 54, 839,389$ 547,353

ASSETS
Current Assets:
Cash and cash equivalents
Accounts receivable — trade
Deferred income taxes (Note 11)
Designated assets for clearing funds (Note 3)
Other current assets
Total Current Assets

Property and Equipment:
Buildings
Tools and furniture
Construction in progress

Total Assets

The accompanying notes are an integral part of these statements.

54 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008¥ (thousands)
2007

2008

$ (thousands)(Note 4)2008

LIABILITIESCurrent Liabilities:
Accounts payable – trade

1,923,856¥ 1,556,483$ 15,535—

2,400,000

23,954

Income taxes payable

938,458

931,071

9,293

Allowance for employees’ bonuses

180,870

178,909

1,786

Allowance for executives’ bonuses

20,30020,300203

Consumption tax payable

6,842

4,030

40

Deposits received for clearing funds (Note 3)

34,715,413

29,884,895

298,282

Other current liabilities

1,399,711

629,274

6,281

39,185,453

35,604,964

355,374

114,409148,155

1,479

48,12041,160411—

827,700

8,261—

320,356

3,197

162,529

1,337,372

13,34839,347,982

36,942,336

368,722

Short—term borrowings (Note 5 and 8)

Total Current Liabilities¥

Long—term Liabilities:
Allowance for employees’ retirement benefits(Note 9)Allowance for executives’ retirement benefits
Allowance for loss on cancellation of agreement for entrusted
operations
Allowance for loss on movement of computer
Facilities
Total Long—term Liabilities
Total Liabilities
NET ASSETS
Shareholders’ Equity:
Common stock
Authorized: 10,000 shares
Issued: 8,500 shares
Capital surplus
Retained earnings
Total Shareholders’ Equity
Total Net Assets
Total Liabilities and Net Assets

4,250,000

4,250,000

42,4194,250,000
8,189,350

4,250,000
9,397,052

42,41993,793

16,689,350

17,897,052

178,631

16,689,350¥ 56,037,333

17,897,052¥ 54,839,389

178,631$ 547,353

The accompanying notes are an integral part of these statements.

Japan Securities Depository Center, Inc. ANNUAL REPORT 200855

Consolidated Financial Statements
Consolidated Statements of Income (For the years ended March 31, 2007 and 2008)

2007

2008

$(thousands)(Note 4)2008

¥ 22,559,853¥ 26,022,586$ 259,732

198,609
1,772,775
62,3974,850
5,087,273
2,623,715
1,645,092
3,871,462
459,776
601,997
1,559,951
17,887,901
4,671,951

206,673
1,822,149
81,945—
6,974,215
2,597,821
1,286,788
5,604,745
509,500
720,881
1,925,132
21,729,855
4,292,730

2,063
18,187818—
69,61025,92912,84355,941
5,085
7,195
19,215
216,886
42,846

125

272

2

38,936——(38,377)(28,500)

111,385
21,375(3,637)(49,391)
—

1,111
213
(36)
(493)
—

(8,876)(45,763)(7,576)(16,041)

(75)
(160)

(185,093)(590,625)(5,895)—(827,700)(8,261)—
113(267,435)
4,404,515(320,356)
3,304(1,678,991)
2,613,739(3,197)
33(16,758)
26,088

1,787,090(34,532)¥ 2,651,958

1,781,626(715,589)¥ 1,547,702

17,782(7,142)$ 15,448¥ (thousands)

Operating Income
Operating Expenses:
Executives’ compensation and bonuses
Salaries and bonuses
Severance costs for employees (Note 9)
Executives’ retirement benefits
Maintenance for systems
Outside services
Registration fees
Depreciation and amortization
Rent
Advertisement
OthersTotal Operating Expenses
Income from Operations
Other Income (Expenses):
Interest income
Operational revenue on the designated assets
for clearing funds
Equity in earnings of the affiliate
Interest expenses (Note 8)
Commitment fees
Commission fees
Fees for fund operation of designated assets
for clearing funds
Loss on disposal of fixed assets
Non—recurring depreciation of property andequipment（Note 10）
Provision for loss on cancellation ofagreement for entrusted operations
Provision for loss on movement of computer
Facilities
Others, net
Total
Income before Income Taxes
Income Taxes (Note 11)
Current
Deferred
Net Income

U.S.Dollars(Note 4)Yen
Per Share (Note 16)
Net income – primary
Dividends
Weighted—average number of common
stock shares outstanding (in shares)¥ 311,995.13
40,000¥ 182,082.62
40,000

8,500

8,500

$

1,817
399

The accompanying notes are an integral part of these statements.

56 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Consolidated Statements of Changes in Net Assets (For the years ended March 31, 2007 and 2008)¥ (thousands)
Number ofcommon stock
sharesCommonstock

Capitalsurplus8,500¥ 4,250,000¥ 4,250,000

Cash dividends

—

—

—

(297,500)(297,500)(297,500)

Bonuses to executives

—

—

—

(17,200)(17,200)(17,200)

Net income for the year

—

—

—

2,651,958

2,651,958

2,651,958

Balance as of March 31, 2007

8,500

¥ 4,250,000¥ 4,250,000¥ 8,189,350

Cash dividends

—

—

—

(340,000)(340,000)(340,000)

Net income for the year

—

—

—

1,547,702

1,547,702

1,547,702

Balance as of March 31, 2008

8,500

¥ 4,250,000¥ 4,250,000

Balance as of March 31, 2006

Retainedearnings

Total
shareholders’equityTotal
net assets¥ 5,852,092 ¥ 14,352,092 ¥ 14,352,092¥ 16,689,350 ¥ 16,689,350¥ 9,397,052 ¥ 17,897,052 ¥ 17,897,052$ (thousands) (Note 4)
Number ofcommon stock
sharesCommonstock

CapitalsurplusRetainedearnings

Total
shareholders’equityTotal
net assets

8,500$ 42,419$ 42,419$ 81,738$ 166,576$ 166,576

Cash dividends

—

—

—

(3,393)(3,393)(3,393)

Net income for the year

—

—

—

15,44815,44815,448

Balance as of March 31, 2008

8,500

$ 42,419$ 42,419$ 93,793$ 178,631$ 178,631

Balance as of March 31, 2007

The accompanying notes are an integral part of these statements.

Japan Securities Depository Center, Inc. ANNUAL REPORT 200857

Consolidated Financial Statements
Consolidated Statements of Cash Flows (For the years ended March 31, 2007 and 2008)$ (thousands)(Note 4)¥(thousands)

Cash Flows from Operating Activities:
Income before income taxes
Depreciation and amortization
Non-recurring depreciation of property and equipment
Increase (decrease) in allowance for employees’ bonuses
Increase in allowance for executives’ bonuses
Increase in allowance for employees’ retirement benefits
Decrease in allowance for executives’ retirement benefits
Increase in allowance for loss on cancellation of agreement for
entrustment of operations
Increase in allowance for loss on movement of computer
facilities
Interest income
Interest expenses
Foreign exchange loss
Equity in earnings of the affiliate
Loss on disposal of property and equipment
Loss on disposal of intangible assets
Decrease in accounts receivable-trade
Increase (decrease) in accounts payable-trade
Increase in other assets
Decrease in other liabilities
Executives’ bonuses
Sub-totalInterest and dividends received
Interest paid
Income taxes paid
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities:
Payments for purchase of investment securities
Payments for purchase of property and equipment
Proceeds from sales of property and equipment
Payments for purchase of intangible assets
Payments of guarantee money deposits received
Proceeds from refund of guarantee money deposits
Net Cash Flows Used in Investing Activities
Cash Flows from Financing Activities:
Short-term borrowings
Repayment of short-term borrowings
Cash dividends paid
Net Cash Flows (Used in) Provided by Financing Activities
Effect of exchange rate changes on cash and cash equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year

2007

2008

¥4,404,515
3,871,462
185,093
51,316
20,30034,900(12,720)¥ 2,613,739
5,604,745
590,625(1,961)—
33,746( 6,960)$ 26,088
55,941
5,895
(19)
—
336
(69)

—

827,700

8,261

—
(125)
—
91
—
19,273
26,489170,875
52,306(134,823)(253,334)(17,200)
8,418,423
125—(2,377,489)
6,041,058

320,356( 272)
3,637
556(21,375)
9,297
6,744
383,014(367,373)(137,867)(5,311)—
9,853,041
272(3,101)(1,789,007)
8,061,204

3,197
(2)
36
5
(213)
93
67
3,823
(3,666)(1,376)(53)—
98,3442(31)(17,856)
80,459—(1,564,250)
75(3,224,463)(33,578)
62,980(4,759,235)(315,272)(3,975,197)—(6,758,275)(79,273)—(11,128,018)(3,147)(39,676)—(67,455)(791)—(111,069)——(297,500)(297,500)(91)
984,231
1,839,815¥2,824,047

3,360,000(960,000)(340,000)
2,060,000( 556)(1,007,370)
2,824,047¥ 1,816,676

33,536(9,582)(3,393)
20,561(5)(10,054)
28,186$ 18,132

2008

The accompanying notes are an integral part of these statements.

58 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Notes to the Consolidated Financial Statements
1. Basis of Presenting the Consolidated Financial
Statements
The accompanying consolidated financial statements
have been compiled from the accounts maintainedby Japan Securities Depository Center, Inc. (“theCompany”) and its subsidiary in accordance with theprovisions set forth in the Financial Instruments andExchange Act in conformity with accounting principles
and practices generally accepted in Japan, which
are different in certain respects as to the applicationand disclosure requirements of International Finance
Reporting Standards. Certain items presented in
the consolidated financial statements filed with the
Director of the Kanto Local Finance Bureau in Japan
have been reclassified for the convenience of readers
outside Japan.

2. Summary of Significant Accounting Principles(1) Consolidation
The consolidated financial statements include theaccounts of Japan Securities Depository Center,
Inc. and its wholly-owned subsidiary, JASDEC
DVP Clearing Corporation (hereafter, “JDCC”)
which is the only subsidiary of the Company.
JDCC operates under a fiscal year ending on March
31, which is the same as that of the Company.

(2) Cash and cash equivalents
Cash and cash equivalents include all highly liquid
investments, with original maturities of threemonths or less, which are readily convertible to
known amounts of cash and are so near maturity
that they present only an insignificant risk ofchanges in value because of changes in interest
rates. Cash and cash equivalents in the consolidatedbalance sheets and consolidated statements of cash
flows are identical.

(3) Application of equity method
By acquiring 20% of outstanding shares of Tosho
System Services Co., Ltd. (hereafter, “TSS”) on
May 18, 2007, the equity method is applied to TSS.

(4) Property and equipment
Depreciation for buildings, excluding improvements, is computed on the straight-line method.
Depreciation for other capital assets is computed on
the declining-balance method.

The main estimated useful lives are as follows:
Buildings
3-49 years
Tools and furniture
2-15 years(Change in accounting principle)
The Company and its subsidiary have changed thedepreciation method for property and equipment
acquired on or after April 1, 2007 to the method
based on the amended Corporate Tax Law.
As a result of this change, income from operations
and income before income taxes decreased by ¥325
million each, and net income decreased by ¥193
million, from the amounts which would have beenrecorded under the previous method.
(Additional information)
Regarding property and equipment acquired on or
before March 31, 2007, the differences between
their residual values and memorandum values (¥1)
are depreciated in accordance with the amended
Corporate Tax Law. Specifically, when the net
book value of an asset reaches 5% of its acquisition
cost, which was considered to be residual value
before this change, in a certain fiscal year, thedifference between such residual value (5% of theacquisition cost) and the memorandum value ofsuch asset is depreciated in an equal amount over
5 years from the next fiscal year. This change will
have only minor impact on income form operations
and income before taxes.

(5) Intangible assets
Costs of software for internal use are capitalized
and amortized on the straight-line method over theestimated useful life of 5 years. Other intangible
assets are amortized using straight-line method
over the period registered by the Corporate Tax
Law. Software regarding physical stock certificates,
which will become redundant after dematerialization of stock certificates, is estimated to be useful
until January 2009, the date which all interested
parties have set as the target for the commencementof dematerialization.

(6) Allowance for bonuses
Allowance for employees’ bonuses and allowancefor executives’ bonuses are provided for bonuses
to employees and executives attributable to each

Japan Securities Depository Center, Inc. ANNUAL REPORT 200859

fiscal year based on an amount expected to pay,
respectively.

(7) Severance indemnity benefits
The Company has a severance indemnity plan
covering all employees who meet the eligibility
requirements of the Company’s retirement
regulations. The Company records allowancefor employees’ retirement benefits based on
the amount that would be payable if all eligible
employees voluntarily terminated their employment
with the Company at the balance sheet date.
Retirement benefits payable to directors andstatutory auditors are estimated as allowance for
executives’ retirement benefits at the amountcomputed based on the Company’s internal rules
and regulations on these benefits. The executives’retirement benefits plan was abolished on June20, 2006. Allowance for executives’ retirement
benefits was accrued until the plan abolishment as
an amount to be paid to those executives who had
been in service since the plan was introduced.

Statement No.5)”, and “Implementation guidance
for Accounting standards for presentation of Net
Assets in the Balance Sheet (Accounting Standardsof Japan Guidance No.8)” both issued by the
Accounting Standard Board of Japan on December
9, 2005.
The amounts corresponding to the conventional“Shareholders’ equity” in the balance sheet is¥16,689,350 thousand ($166,577 thousand).
“Net assets” in the balance sheets for this year ispresented according to the revision of “Regulations
Concerning the Terminology, Form and
Presentation Methods of Consolidated Financial
Statements” dated on April 25, 2006. Furthermore,
the Company presented its net assets in the balance
sheets using the new presentation as of March 31,
2005 and 2006.

(12) Consumption taxes

Estimated expenses are provided based on loss
on cancellation of entrusted operations due todematerialization of stock certificates.

The consumption taxes withheld by the Company
and its subsidiary on sales and the consumption
taxes paid by the Company and subsidiary on its
purchases of goods and services are not included in
the amounts of the relevant accounts in the accompanying statements of income. The consumption
taxes withheld and paid are recorded as an asset ora liability, as the case may be, and the net balanceis shown in the balance sheets.

(9) Allowance for loss on movement of computer facilities

3. Assets and Liabilities Held for Sound
Settlement System Operation and Management(8) Allowance for loss on cancellation of agreement for entrusted operations

Estimated expenses are provided based on the estimated restoration costs and other related relocation
costs to be paid upon the movement of computer
facilities.

(10) Finance leases
In the normal course of business, the Company
enters into lease agreements. Finance lease agreements, except for those agreements where theownership of the leased assets is transferred to theCompany, are accounted for as operating leases.

(11) Accounting standard for presentationof Net Assets in the Balance Sheet
Effective from the year ended March 31, 2007,
the Company has applied “Accounting standards
for presentation of Net Assets in the Balance
Sheet (Accounting Standards Board of Japan

60 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

In order to secure the Delivery Versus Payment(“DVP”) for Non-Exchange Transaction Deliveries(“NETDs”) settlement system, JDCC, a consolidated
subsidiary of the Company, receives cash or securities
as collateral from the DVP participants whom JDCC
officially acknowledge as a party who undertakes
securities obligations in accordance with the provisions
set forth in JDCC’s general provisions in accordancewith Article 156, Paragraph 7-1, of the Financial
Instruments and Exchange Act (Law No. 25, 1948).
JDCC manages cash and securities entrusted by the
DVP participants as clearing funds defined in Article
156-11 of the Financial Instruments and Exchange Act
separately from other assets in accordance with JDSS’s
general provisions and Article 7 of the cabinet ordinance related to securities clearing agencies (Cabinet
Ordinance No. 76, 2002).

(1) Participant fund specified assets andparticipant funds under management
Under the DVP for the NETDs settlement system,
when JDCC accepts DVP participants’ obligations
to counterparties, the DVP participants involved in
the transactions shall assume the same obligations
to JDCC.
JDCC requires each DVP participant to establish
a participant fund in excess of the minimum
amount set forth in JDCC’s general provisions
to ensure that the respective obligations of DVP
participants are covered. The aggregate amount ofminimum participant funds required by JDCC’s
general provisions as of March 31, 2007 and 2008was ¥15,000,000 thousand ($149,715 thousand). In
the event a DVP participant defaults on the required
payment obligations of the DVP for the NETDs
settlement system, JDCC shall take deposits fromthe participant fund of this DVP participant tofulfill its obligations to other DVP participants.
The participant funds entrusted to JDCC will be
managed as money trusts, in line with the statedgeneral provisions of JDCC.
These money trusts are evaluated at cost, just as
available-for-sale securities with no market value.
Assets and liabilities pertaining to participant
funds are presented as designated assets for clearing assets and deposits received for clearing funds,
respectively.

(2) Collateral securities
Under the DVP for the NETDs settlement system,
DVP participants are able to entrust marketablesecurities listed in JDCC’s general provisions(hereafter, “collateral securities”) to ensure thatobligations to JDCC are met.
When a DVP participant fails to meet its obligations to JDCC, JDCC is authorized to dispose of
the entrusted collateral securities by selling themin securities markets or through other methods
deemed appropriate by JDCC.
As of March 31, 2007 and 2008, the market valueof collateral securities entrusted to JDCC was¥141,106,397 thousand and ¥235,795,655 thousand($ 2,353,484 thousand), respectively.

¥100.19=U.S. $1, the rate of exchange as of March
31, 2008, has been used in translation. The inclusionof such amounts is not intended to imply that Japanese
yen have been or could be readily converted, realized
or settled in U.S. dollars at this or any other rate.

5. Commitment Line and Overdraft Contracts
To ensure agile and stable fund-raising, the Company
concludes commitment line agreements (¥12,000,000
thousand ($119,772thousand) in total) and overdraft
contracts (¥5,000,000 thousand ($49,905 thousand) intotal) with three banks. To prepare for a possible deficiency of funds due to a default by DVP participants,
JDCC has concluded commitment line agreements(¥45,000,000 thousand ($449,146 thousand) intotal) with three banks, as part of a liquid fund forcompleting fund settlement on the required day. ¥ nil
and ¥2,400,000 thousand ($23,954 thousand) of thecommitment line were utilized by the Company as ofMarch 31, 2007 and 2008, respectively.

6. Net Assets
The Corporate Law of Japan provides that an amountequal to 10% of the amount to be distributed as
distributions of capital surplus (other than the capitalreserve) and retained earnings (other than the legal
reserve) be transferred to the capital reserve andthe legal reserve, respectively, until the sum of thecapital reserve and the legal reserve equals 25% of
the common stock account. Such distributions can bemade at any time by resolution of the shareholders, orby the Board of Directors if certain conditions are met,
but neither the capital reserve nor the legal reserve isavailable for distributions.

7. Lease Transactions
Finance lease transactions, other than those in which
the ownership of the leased asset is transferred to thelessee, are accounted for as operating leases. The
following table shows the amounts which would havebeen recorded as financial leases as of March 31, 2007
and 2008 and for the years then ended:

4. US Dollar Amounts
Amounts in U.S. dollars are included solely for theconvenience of readers outside Japan. The rate ofJapan Securities Depository Center, Inc. ANNUAL REPORT 200861¥ (thousands)
2007
Tools and furniture:
Acquisition cost
Accumulated
depreciation
Net book value
Software:Acquisition cost
Accumulated
depreciation
Net book value

2008$ (thousands)
2008¥267,272 ¥2,497,402$ 24,926(202,929) (697,698)¥ 64,343 ¥1,799,703(6,964)$ 17,962¥— ¥ 608,081$ 6,069¥—(297,240)— ¥ 310,841(2,967)$ 3,102

Lease obligations
including interest
thereon :Due within one year
Due over one year
Total
Finance leasecharges
Depreciation
expenseInterest portion¥ 50,985 ¥ 565,538
15,261 1,564,035¥ 66,247 ¥2,129,573$ 5,644
15,611$ 21,255¥ 56,377 ¥ 474,604$ 4,737

54,142
1,574

468,042
16,477

4,671
164(Note) Methods applied in computation of the above
data are as follows:
Depreciation: Straight-line method with zero residual
value over the lease contract period
Interest: Computed as the difference between the leaseobligations and the acquisition cost, allocatedover the lease contract period based on theinterest rate method

8. Borrowings
Short-term borrowings comprised loans from bankswith a weighted average interest rate of 1.3% perannum. The Company had short-term borrowings of¥2,400,000 thousand ($23,954 thousand) as of March
31, 2008.

9. Allowance for Severance Indemnities for
Employees
Allowance for employees’ retirement benefits on

62 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

March 31, 2007 and 2008 represented the amountthat would be payable for the Company if all eligible
employees voluntarily terminated their employment at
the balance sheet dates. Severance costs for employeescharged to income for the years ended March 31, 2007
and 2008 amounted to ¥62,397 thousand and ¥81,945
thousand ($ 817 thousand), respectively.

10. Non-recurring Depreciation of Fixed Assets
Non-recurring depreciation of fixed assets was caused
by depreciation, as a result of the decision to movecomputer sites.
¥ (thousands)

Buildings
Tools and furniture
Software
Long-term prepaid
expenses$ (thousands)

2007¥185,093——

2008¥ 37,956
308,800
243,360

2008
$ 379
3,082
2,429

—
¥ 185,093

507¥ 590,625

5$ 5,895

11. Income Taxes(1) Deferred tax assets

12. Note to the Consolidated Statements of
Changes in Net Assets

The following table shows the breakdown ofdeferred tax assets:¥ (thousands)
2007
2008
Deferred tax assets:
Allowance for
employees’ bonuses

73,433

72,637(1) Outstanding stock$ (thousands)
2008

725

Enterprise tax
payable68,527

71,293712

Accrued social
insurance premiums
Business facility tax

9,171
3,515

8,557
4,166

85
42

Allowance for
employees’ retirement benefits

46,45060,151

600

Allowance for
executives’ retirement benefits

19,536

16,710167

Excess depreciationof fixed assets

Excess amortizationof deferredcharges for tax
purposes
Deferred tax assets

Increase

Ordinary
8,500
—
share
Type of March 31,
stocks2007
Increase
Ordinary
8,500
—
share

Decrease

March 31,
2007

—

8,500

Decrease

March 31,
2008

—

8,500

(2) Treasury Stock
Not applicable.

(3) Stock Subscription Rights and Other
Securities
Not applicable.

1 Payment of the dividends
137,528

377,206

3,765
Resolution—

336,0463,354—

130,064

1,298

Allowance for loss
on movement ofcomputer
facilities

March 31,2006(4) Dividends

Allowance for loss
on cancellation ofagreement
for entrusted
operations

Type ofstocks

20,135

17,053

170¥378,299 ¥1,093,888$10,918(2) Reconciliation between the nominal
statutory income tax rate and the effective
income tax rate
The difference between the statutory tax rate andthe effective tax rate for the years ended March 31,
2007 and 2008 is less than 5% of the statutory tax
rate, thus the note is omitted.

Total of
Revenue Dividends Dividend
Type ofof¥per Share Record Effective
Stocks Dividends (thousands)
¥
Date
Date

Ordinary General
Shareholders Ordinary Retained
March 31, June 22,¥ 340,000 ¥ 40,000
Meeting
Share Earnings
2007
2007
(June 21, 2007)

2 Dividends for which record date belongs to the year
ended March 31, 2008 and for which effective date
will belong to the year ending March 31, 2009

Resolution

Total of
Revenue Dividends Dividend
Type ofof¥per Share Record Effective
Stocks Dividends (thousands)
¥
Date
Date

Ordinary General¥ 340,000¥ 40,000 March 31, June 24,
Shareholders Ordinary Retained($ 3,393
2008
2008
Meeting
Share Earnings($ 399)thousand)(June 23, 2008)

13. Stock Option
Not applicable.

Japan Securities Depository Center, Inc. ANNUAL REPORT 200863

14. Segment Information(1) Business segment
Disclosure is omitted because the Company operates a single business unit, the central securities custody and bookentry transfer system.

(2) Geographic Information
Disclosure is omitted because the Company has neither overseas consolidated subsidiaries nor overseas branches forthe years ended March 31, 2007 and 2008.

(3) Overseas sales
Disclosure is omitted because the Company does not have any overseas sales for the years ended March 31, 2007
and 2008.

15. Related Party Transactions
The material transactions of the Company with related companies or individuals, excluding transactions with the consolidated subsidiary that are eliminated in the consolidation, and those disclosed elsewhere in these financial statements,
for the years ended March 31, 2007 and 2008 are as follows:(1) Directors
As of March 31, 2007
Title

Name

Business

Transactions

Amount¥ (thousands)

Account

Ending Balance¥ (thousands)

Director

Toshitsugu
Shimizu(Note 2 (1))

Director of the Company
President and CEO of Japan
Securities Settlement &Custody, Inc.

Outsourcing¥622,184

Accounts
payable-trade¥217,764

Director

Kouichiro
Miyahara(Note 2 (2))

Director of the Company
President and CEO of Japan
Securities Settlement &Custody, Inc.

Outsourcing¥1,776,408

Accounts
payable-trade¥123,113(Note) 1 The transaction amounts above exclude consumption tax. However, the ending balances include consumption tax.
2 Terms and conditions(1) These amounts represent transactions for the period from April 1, 2006 to June 30, 2006 because Toshitsugu Shimizu resigned from the Board of Directors of theCompany on June 20, 2006, and ending balance is the amount as of June 30, 2006.
(2) These amounts represent transactions for the period from July 1, 2006 to March 31, 2007 because Koichiro Miyahara was assigned to the Board of Directors of
the Company on June 23, 2006.
(3) The terms and conditions of the above transactions are on an arm’s-length basis.

As of March 31, 2008
Title

Name

Business

Transactions

Amount¥ (thousands)

Account

Ending Balance¥ (thousands)

Director

Koichiro
Miyahara(Note 2 (1))

Director of the Company
President and CEO of Japan
Securities Settlement &Custody, Inc.

Outsourcing¥639,952($6,387
thousands)——

Director

Hironaga
Miyama(Note 2 (2))

Director of the Company
President and CEO of Japan
Securities Settlement &Custody, Inc.

Outsourcing¥1,730,028($17,267
thousands)

Accounts
payable-trade¥33,063($330
thousands)(Note) 1 The transaction amounts above exclude consumption tax. However, the ending balances include consumption tax.
2 Terms and conditions(1) These amounts represent transactions for the period from April 1, 2007 to June 30, 2007 because Koichiro Miyahara resigned from the Board of Directors of theCompany on June 21, 2007, and ending balance is the amount as of June 30, 2007.
(2) These amounts represent transactions for the period from July 1, 2007 to March 31, 2008 because Hironaga Miyama was assigned to the Board of Directors of
the Company on June 25, 2007.
(3) The terms and conditions of the above transactions are on an arm’s-length basis.

64 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

(2) Principal shareholder and its subsidiaries
As of March 31, 2007

CapitalNames ofcompanies¥
Address (thousands)

Principal
business

RelationshipAmountPercentage(Note 1)of owner- Directors
holdingEndingship with
Descriptions balancevoting concurrent
Business¥
positions relationship Transactions (thousands) (Note 2) ¥(thousands)
rightsTosho System
Design, develService Co.
Koto-ku,
opment andLtd.
¥100,000
Tokyo
Maintenance(Subsidiary ofof softwareother affiliates)—

Japan Securities
Clearing
Chuo-ku,¥1,700,000
Corporation
Tokyo(Subsidiary ofother affiliates)

Clearing
securities—

Custody &¥300,000 settlement of
securities—

Japan Securities
Settlement &Chuo-ku,
Custody, IncTokyo(Subsidiary ofother affiliates)

Accounts
payabletrade¥19,316

Accounts
payableother¥8,221

One

Accounts
Commission Commission¥3,877,255 receivableincome
incometrade¥462,939

One

Outsourcing Outsourcing ¥2,398,593

Accounts
payabletrade¥123,113—

Purchase ofsoftware,Purchase of¥1,456,738
maintenance of softwaresystems, etc.

(Note) 1. These transaction amounts above exclude consumption tax. However, the ending balance includes consumption tax.
2. The terms and conditions of the above transactions are on an arm’s-length basis.

As of March 31, 2008

CapitalNames ofcompanies¥
Address (thousands)

Principal
business

Tokyo Stock¥11,500,000
Exchange, Inc. Chuo-ku,($114,781(Subsidiary of Tokyo
thousands)
other affiliates)

Exchangeof financial
instruments

Japan Securities
Clearing¥1,700,000
Chuo-ku,
Corporation($16,967
Tokyo(Subsidiary of
thousands)
other affiliates)

Clearing
securities

RelationshipAmountPercentage(Note 1)of owner- Directors
holdingEndingship with
Descriptions balancevoting concurrent
Business¥
positions relationship Transactions (thousands) (Note 2) ¥(thousands)
rights—(Note 3)—

One

Secondmentof staffs,
Purchase of ¥315,272
lease ofinvestment($3,146
computer sites, securities thousands)
etc.

One

Commission Commission
incomeincome¥4,154,800($41,469
thousands)——¥384,800
Accounts($3,840
receivablethousands)
tradeJapan Securities Depository Center, Inc. ANNUAL REPORT 2008

65

(Note) 1. These transaction amounts above exclude consumption tax. However, the ending balances include consumption tax.
2. The terms and conditions of the above transactions are on an arm’s-length basis except for the transaction of the investment security. Acquisition cost of the investment security was based on book value of net assets.
3. Tokyo Stock Exchange Group, Inc. succeeded the holding of the Company’s stocks from Tokyo Stock Exchange, Inc. due to reorganization effective October 1, 2007,
and replaced Tokyo Stock Exchange, Inc. as a principal shareholder of the Company. As such, these amounts represent transactions for the period from April 1, 2007
to September 30, 2007. Tokyo Stock Exchange, Inc. held 21.82% of the Company’s outstanding shares on September 30, 2007.

(3) Subsidiaries and affiliates
As of March 31, 2008
Relationship
CapitalNames ofcompanies¥
Address (thousands)

Principal
business

Tosho System¥100,000
Design &Koto-ku,
Service Co. Ltd.
($ 998development ofTokyo(An affiliate)
thousands)
softwareAmountEndingPercentage Directors(Note 1)balanceof owner- holding
Descriptions
ship with concurrent
Business¥¥voting right positions relationship Transactions (thousands) (Note 2) (thousands)
Directly
holds
20%

Two

Purchasing¥1,491,226
softwarePurchase of($14,883
and system
softwarethousands)
maintenanceAccounts
payableother¥240,008($2,395
thousands)(Note) 1. These transaction amounts above exclude consumption tax. However, ending balance includes consumption tax.
2. The terms and conditions of the above transactions are on an arm’s-length basis.

16. Earnings Per Share
The basis for calculating earnings per share for the years ended March 31, 2007 and 2008 is as follows:$ (thousands)¥ (thousands)
2007

2008

2008

Net income as reported in the consolidated statements of income¥2,651,958¥1,547,702$15,448

Net income pertaining to common stock shareholders¥2,651,958¥1,547,702$15,448

8,500

8,500

—

Weighted-average number ofcommon stock shares outstanding (in shares)

66 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Report of Independent Auditors

The Board of Directors and Shareholders ofJapan Securities Depository Center, Inc.
We have audited the accompanying consolidated balance sheets of Japan Securities Depository
Center, Inc. and its subsidiary as of March 31, 2007 and 2008, and the related consolidated
statement of income, changes in net assets, and cash flows for the year in the period ended March
31, 2008, all expressed in yen. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on
our audit. The consolidated financial statements of Japan Securities Depository Center, Inc. andits subsidiary for the year ended March 31, 2007 were audited by other auditor whose report dated
June 21, 2007, expressed an unqualified opinion on those financial statements.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Japan Securities Depository Center, Inc. and its subsidiary at
March 31, 2008, and the consolidated results of their operations and their cash flows for the year
then ended in conformity with accounting principles generally accepted in Japan.
As described in Note 2. (4), effective for the year ended March 31, 2008, Japan Securities
Depository Center, Inc. and its subsidiary changed the method of depreciation.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect tothe year ended March 31, 2008 are presented solely for convenience. Our audit also included thetranslation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has been
made on the basis described in Note 4.

June 18, 2008

Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

67

History (as of March 2008)

Relevant Legislation

Organizationof JASDEC

June 27th“The Law for Partial Amendments
to the Law Concerning Book-Entry
Transfer of Stock Certificates, etc.”
was promulgated

May 15th
Law Concerning Central Securities
Depository and Book-Entry Transfer ofStock Certificates and Other Securities (CSD
Law) passed, and enforced from November

Dec. 6th
Japan Securities
Depository Center(JASDEC), wasestablished as afoundation

May 27th
JASDEC wasdesignated as thedepository organization
under the CSD Law

Nov. 2nd
Detailed plan forconversion of JASDEC
to a joint-stockcompany wasannounced

and
its subsidiaries

OperationofSept. 10th
Pre-Settlement
Matching System(PSMS) was started

the System
Oct. 9th
Depository services(initially, for 50 listed
stocks on the TSE) wasstarted
Oct. 9th
A computer systemfor depository andbook-entry transfer
began operation

68 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

Oct. 9th
Full-scale depository
services was started

Nov. 26th
Handling of
convertible bonds
was started
May 8th
New depository andbook-entry transfer
system was launched

May 1stJASDEC launched proprietarysystem for DVP settlement of
exchange tradesJune 9th
“The Law for Partial Amendments to the Law Concerning
Book-entry Transfer of Corporate Bonds and Other
Securities for the Purpose of Streamlining the Settlement for
Trades of Stocks and Other Securities” was promulgatedJan. 4th
Japan Securities
Depository Center, Inc.
was established

June 17th
Japan Securities
Depository Center, Inc.
took over all depository
and book-entry transfer
operations from the
JASDEC Foundation,
which is dissolved

Jan. 10th
JASDEC received
official designation as
institution for transfer of
securities under the
stipulations of the Law
Concerning Book-Entry
Transfer of Corporate
Bonds, etc.
June 6th
JASDEC DVP
Clearing Corporation(JDCC) wasestablished

April 6th
JDCC acquired
license to act as asecurities clearing
agencyJan. 4th
JASDEC inaugurated
depository and book-entry
transfer system forinvestment trusts
May 17th
DVP settlement system for
non-exchange transaction
derivatives (NETDs) wascommenced
March 31st
Start of system forcommercial paper book-entry
transfer was started

Jan. 10th
JASDEC inaugurated
book-entry transfer systemfor corporate bonds;
Feb. 14th
JGB repo and gensaki
transactions was added tolist of targets of securities
information tracing system
May 1stJASDEC inaugurated depository
and book-entry transfer system
for foreign stocks

Jan. 4th
JASDEC inaugurated depository andbook-entry transfer system for investment
trusts listed on the stock exchanges, i.e.
exchange-traded funds (ETFs)

March 27th
JASDEC launched
Securities Information
Tracing System(SITRAS) for lost stocks

Japan Securities Depository Center, Inc. ANNUAL REPORT 200869

Corporate Data (March 31, 2008)

Profile of the company
Registered Head Office
Address
Established
Major Businesses

Main Business Office
Operational Offices
Consolidated Subsidiary Company
Number of Employees

Japan Securities Depository Center, Inc.
1-1 Nihonbashi-Kayaba-cho, 2-chome, Chuo-ku, Tokyo, Japan
January 4, 2002
(1) Custody and book-entry transfer system for stock certificates(2) Book-entry transfer of commercial papers(3) Book-entry transfer of corporate bonds(4) Book-entry transfer of investment trusts(5) DVP settlement services for NETDs(6) Pre-settlement matching system(7) Custody services for foreign stocks(8) Other businesses including provision of information for the
Securities Information Tracing System
Tokyo
Tokyo, Osaka, Nagoya, Fukuoka, Sapporo
JASDEC DVP Clearing Corporation (Chuo-ku, Tokyo)
191

SharesTotal of shares
approved for issue

10,000Total of issued shares

8,500

Paid-in capital¥4,250,000,000

Shareholders

185

Major shareholder

No. ofshares held

Tokyo Stock Exchange Group, Inc.
Japan Securities Dealers Association
Nomura Holdings, Inc.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Nikko Citigroup Limited
Japan Trustee Services Bank, Ltd.
Trust & Custody Services Bank, Ltd.
Daiwa Securities SMBC Co., Ltd.

70 Japan Securities Depository Center, Inc. ANNUAL REPORT 2008

1,855
1,012
485
425
425
424
321
320
284
230

Stake in Company
(%)

21.82
11.90
5.70
5.00
5.00
4.98
3.77
3.76
3.34
2.70

Organization Structure
Shareholders Meeting
Board of Auditors
Board of Directors
President & CEO
Compliance Office
General Administration Department
Corporate Planning Department
Business Administration Department
Shareholders Notification Office
Bond and Commercial Paper Department
Investment Trust Department
International Department
Business Planning Department
First Systems Department
Second Systems Department
Operational Offices

Japan Securities Depository Center, Inc. ANNUAL REPORT 200871

Japan Securities Depository Center, Inc.
5th Floor, Daini-Shoken Kaikan Bldg, 1-1,
Nihombashi-Kayaba-cho 2-chome
Chuo-ku, Tokyo 103-0025, JAPANTEL +81-3-3661-0139