Annual Report
2013

Annual Report 2013

Daini-Shoken Kaikan Bldg, 1-1, Nihombashi-Kayaba-cho 2-chome, Chuo-ku, Tokyo 103-0025, JAPANTEL +81-3-3661-0139 http://www.jasdec.com/en/

Shares
Total shares approved for issue

10,000Total issued shares

8,500

Paid-in capital¥4,250,000,000

Shareholders

133

Japan Exchange Group, Inc.

2,072

24.37

Japan Securities Dealers Association

1,066

12.54

Nomura Holdings, Inc.

485

5.70

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

425

5.00

Mizuho Corporate Bank, Ltd.

425

5.00

Mitsubishi UFJ Trust andBanking Corporation

424

4.98

Daiwa Securities Co. Ltd.

360

4.23

Trust & Custody Services Bank, Ltd.

340

4.00

Citigroup Global Markets Japan Inc.

321

3.77

Japan Trustee Services Bank, Ltd.

320

3.76

Organization structure
Meeting of
Shareholders

Board ofDirectors

President &CEO

Audit & Supervisory Board
Audit & Supervisory Board
Member’s OfficeContents

Number of
Stake inshares held Company (%)

Compliance Office
General Administration Department
Corporate Planning Department
Equity Department

02

04

06

Business
Backdrop

Our
roles

Our
Direction

08

12

14

15

36

International Department

Management
Message

Corporate
GovernanceBusiness
Continuity
Plan of JASDEC

Business
Overview

International
Relationships

Post–trade Services Department

Shareholders Notification Office
Fixed Income and Investment Trust Department

Information Services Department

40

42

59

60

62

Analysis ofBusiness
Performanceand Financial
Results

Consolidated
Financial
Statements

Independent
Auditor’s
ReportHistory

Corporate
Data

First Systems Department
Second Systems Department

63
Annual Report 2013

Helping to smooththe operation ofJapan’s capital
markets

Major shareholders

Profile and mission

JASDEC is a central securities depository inJapan designated under the Act on Transfer ofBonds, Shares, etc. JASDEC was established
as a not-for-profit foundation in 1984 andincorporated as a stock company in 2002.
	In Jan. 2009, JASDEC accomplisheddematerialization of stock certificates issued
by all listed companies. With this step, newBook-entry Transfer System for stocks,
corporate bonds and other securities has
been fully established. JASDEC also provides
pre-settlement matching system. JASDEC
DVP Clearing Corporation, wholly owned by
JASDEC, operates DVP settlement system for
non-exchange transaction deliveries.
JASDEC is determined to maintainhigh standards of reliability, usability andefficiency in its settlement infrastructure
by monitoring environmental and structuralchanges affecting capital markets in Japanand overseas, by ensuring that its systems andservices operate reliably, and by continually
implementing reforms and innovations basedon the perspectives of investors, issuers,
market intermediaries and other users.

Total AccountBalance¥ 696
trillion¥ 773
trillion

Number ofIssues Handled

75,856
Number ofTransactions

83.4

million73,31486.0

millionNumber ofTransactions per Day

339

thousand351

thousandBusiness Backdrop

Accelerating the Revitalization ofJapan’s Financial and Capital Markets

02

Innovation

Annual Report 2013

The Financial Market Infrastructures are facing various
challenges such as the new requirements by CPSS-IOSCO,
shorter securities settlement cycles to be introduced in Europe
and other markets, and strengthening of business continuity
plans, etc. Those initiatives and tightening of regulations areimportant components of risk management for both regulatory
authorities and financial institutions.
JASDEC will continue to implement reforms in responseto changes in the domestic and international environment,
structural transformation, and in the demands placed on CSDs.

Globalization
Amid the global trend toward greater complexity andsophistication in financial and securities transactions, morethan ever before, settlement institutions in each country
need to ensure that the growing volume of cross-border
settlements can be processed easily and efficiently. In theJapanese market, expanding inflows of overseas funds
have contributed to the recent rise in the average daily
trading value. Increasingly precise settlement functions areneeded to accommodate this growth.

The world’s major financial
and capital markets are incompetition for funds andtraders beyond their own
borders. The key competition
is for convenience andsafety, and Japan’s markets
are attracting widespreadattention.

03
Annual Report 2013

CompetitivenessThe competitiveness of individual countries’ markets
depends on the convenience of their systems and thediversity of products and services, as well as the reliabilityof settlement systems and the capacity of markets tokeep pace with the diversification of systems. Future
markets will need to work cooperatively to improve userconvenience. Users will be able to select the markets thatoffer the greatest dependability, resulting in increasing
inter-market competition.

Our roles

Assuring Reliability and EfficienCy
Based on Transparency

04
Annual Report 2013

Transparency
While meeting the needs of investors, issuers and market
intermediaries, JASDEC aims to maintain a high standard oftransparency in keeping with the importance of the public’s
interests. To reflect user needs in the administration of oursystems, we have established the Business Operations
Committee to examine key questions referred by the
Board of Directors. Summaries of the deliberations of thiscommittee are published on our website.

Reliability
JASDEC has computerized all stages of processes relating
to securities transactions, from matching to settlement,
to create extremely secure and reliable infrastructurethat is free of human intervention. Our aim in developing
this settlement infrastructure is to provide highly reliable
services capable of fulfilling their vital role as a robust
foundation for financial and capital markets in Japan.

In settlement infrastructure,strong, reliable bridges
are just as importantfor efficient flow as they
are in traditional social
infrastructure. The bridges
JASDEC builds must be as
reliable, strong and trusted
as any bridge made ofconcrete and steel.

Efficiency
05
Annual Report 2013

JASDEC is continually improving the efficiency of allprocedures carried out by users. We are currently
strengthening system infrastructure, including thecomposition of our systems and preparing to replacesome of our mainframe IT infrastructure in January 2014.
We aim to help revitalize Japan’s financial and capital
markets by further enhancing the security and efficiencyof our systems.

Our Direction

Collaborating to develop
global best-practice benchmarks

06
Annual Report 2013

Reinforcement
JASDEC continues to enhance the robustness of its
business infrastructure in three areas. First, we arestrengthening our organizational structures. Second, weare enhancing our business continuity planning (BCP).
Third, we are reinforcing our systems infrastructure.
These initiatives will further improve the reliability
and convenience of our systems for users while also
strengthening our ability to adapt to the globalization offinancial and capital markets.

Global Standards
We are currently preparing to apply ISO 20022, the nextgeneration international message format standard, to oursettlement matching system and transfer system. We alsoplan to connect our systems via SWIFTNet. We have madea long-term commitment to the continual improvement of
our systems with the aim of achieving benchmarks basedon international best practice.

This is an age of diversity,where people and cultures
meet and mix freely.
The Japanese traditionof accommodation isrecognized and valued
internationally, and we hope
to set a clear example by
the way we serve our users,
and share our ideas.

Cooperation
07
Annual Report 2013

JASDEC has signed memorandums of understanding(MOUs) concerning information sharing and reciprocal
cooperation with 17 CSDs, etc., in various countries.
In addition to our role in providing reliable support for
financial and capital markets in Japan, we are also
determined to contribute to the sound growth of financial
and capital markets worldwide through international
cooperation and information sharing with overseas CSDs.

Management Message

08
Annual Report 2013
Haruhiko Kato, President & CEO

Yoshinobu Takeuchi, Chairman

Japan Securities Depository Center, Inc. (JASDEC), as a providerof securities settlement infrastructure that is essential for financial
and capital markets, we are committed to operate reliably to assure
the availability of our services. In addition to this commitment
to reliability, we are also continually working to provide moreadvanced world-class functionality by enhancing our services andimproving operational efficiencies.
09

To make our systems safer and more efficient,
JASDEC plans to replace its current computer
systems with next-generation systems inJanuary 2014. In preparation, throughout fiscal
2012 (the year to March 31, 2013), we diligently
engaged in systems development andimplemented various measures for a smoothtransition to the new systems. They entailed
announcing and publicizing the basic policy forsystems transition, connection specifications
and participant test implementation guidelines,
and formulating market rules concerning new
functions to become available as a result of
the systems replacement. During the year, wedelivered the following improvements in ourservices as well.
First, in order to expand the range of
instruments that can be handled by the Bookentry Transfer System for Stocks, etc., werevised handling requirements for bonds withshare options and share options, making

Annual Report 2013

Initiatives in fiscal 2012it possible to handle all bonds with shareoptions and share options issued in Japan bylisted companies. To increase convenience
for users, we are implementing system
improvements to extend the termination
date for handling of commitment-type rights
offerings and bring forward the starting datefor handling of rights processing for foreign
stock certificates, etc.
Also, as a JASDEC group-wide crosssectional initiative to reduce the administrative
workload for participants, we havestreamlined procedures, such as notificationof changes of their trade names, addresses,
etc., through the use of common forms forall systems that JASDEC group operates andimproving support for electronic submissionof procedure documents.
We continued to engage in international
activities to strengthen our relationships
with overseas CSDs and other organizations
through information exchange and otheractivities. At the Asia-Pacific Central Securities
Depository Group (ACG) and the World ForumManagement Message

10
Annual Report 2013of CSDs, where Chairman Takeuchi serves
as Executive Committee Chairman and ViceChair, respectively, JASDEC was in charge ofplanning and administration in its capacity ofsecretariat and summarized member opinions
concerning international standards pertaining
to securities market infrastructure. In addition,
we continue to expand our relationships withoverseas CSDs and other institutions throughsigned memorandums of understanding(MOUs). This year, we have signed MOUs with
China Central Depository & Clearing (CCDC),
Depozitarul Central (DC) of Romania andMerkezi Kayit Kurulusu (MKK) and Takasbank
of Turkey.

bonds and investment trusts, CA information
relating to foreign stocks, etc. In addition, weplan to disseminate CA information about
Japanese stocks using the ISO 20022 standard.
These improvements will provide users
with one-stop access to a wide range of
information, including CA information about
Japanese securities, in an international digital
data format. This will allow efficient Straight
Through Processing (STP). We plan toimplement this initiative in February 2014.

Implementation ofinternational standards

To provide services that offer greater reliability,
convenience and efficiency, we are constantly
innovating from the perspective of investors,
issuers and market intermediaries. Described
below are some of the priority projects on
which we are working currently.

As mentioned above, we are currently making
preparations for the replacement of ourcomputer systems in 2014. In replacing thesystems, we will adopt ISO 20022, a nextgeneration message standard, in the interestof promoting international standardization.
Additionally, in the new systems, we will
implement connectivity with SWIFTNet, which
is widely used in other countries, so that users
can connect to the new system through either
our proprietary network or SWIFTNet.

Efficient collection anddissemination of CA information

Introduction of DVP for stock
lending and tolerance matching

We have agreed with the Tokyo Stock
Exchange (TSE) to collaborate on enhancing thecorporate action information (CA information)dissemination service. Specifically, we aim to
expand the content of Tokyo Market Information(TMI), TSE’s information distribution service, byadding information we collect about corporate

Accompanying the replacement of computer
systems in 2014, we plan to introduce Delivery
Versus Payment (DVP) settlement for stock
lending transactions and tolerance matching to
non-residents’ transactions.

Current priorities

Response to global
strengthening of risk
management

The management and staff of JASDEC will continue to contributeto the development of financial and capital markets throughcontinual innovation in response to user needs and structural andenvironmental changes in Japan and overseas. We look forward to
the continuing support and cooperation of our stakeholders.

Haruhiko Kato, President & CEO

Yoshinobu Takeuchi, Chairman

11
Annual Report 2013

While JASDEC is continually pushing for
greater convenience in services, we recognize
ever-stronger risk management as a criticalissue for CSDs. And, indeed, across the globe,
financial supervisory authorities are working tostrengthen risk management with an emphasis
on financial institutions and financial market
infrastructures. With regard to new mandatoryinternational standards for securities

settlement infrastructure, the Committee on
Payment and Settlement Systems (CPSS) andthe International Organization of Securities
Commissions (IOSCO) published Principles
for Financial Market Infrastructures (PFMI) in
April 2012 and an accompanying document,
Disclosure Framework and Assessment
Methodology, in December 2012, resulting ina higher mandatory level of risk management
for securities settlement infrastructure. As afinancial market infrastructure, JASDEC iscommitted to appropriately responding to PFMI
and further strengthening risk management.

Corporate GovernanceOur basic policy on corporate governance
JASDEC fully recognizes its social obligation as thecentral body for the provision of the infrastructure
for securities clearing and settlement, which is an
important base of the capital markets. Accordingly,
JASDEC has determined a basic management
policy of providing a highly secure, convenient andefficient service. To this end, we ensure that oursystem meets the needs of users, including investors,
issuing companies and market intermediaries. We

also make sure that our activities promote corporatetransparency and that our business operates with
fairness and accountability, in line with the public
needs of our function. Our commitment to corporate
governance is to earn and maintain a solid reputation
for reliability as the central organization responsible forcreating and operating the infrastructure for securities
clearing and settlement in Japan.

Overview of implementation of corporate governance practices
Framework for management structure and corporate governance to exercise
business judgments, manage operations and implement audits.
12

Corporate Structure

Annual Report 2013

• Board of Directors• Business Operations Committee

The Board of Directors is composed of 19 members, and isbasically structured to achieve a balanced approach to businesswith user-oriented views, as well as business-oriented ideas on
maintaining operational neutrality and fairness. To fully reflect theopinions of users in our operations, nine of the 14 external directors
are selected from JASDEC participants. The remaining five external
directors come from an issuing company and a related organization,or from the Japan Securities Dealers’ Association, academia andthe legal profession, enabling the Board to conduct vigorous
discussions from a broad perspective in consideration of the public
good. In principle, the Board meets once a month to decide basic
management policies and discuss other key issues.

Separately from the Board of Directors and the Audit & Supervisory
Board, JASDEC has set up the Business Operational Committee
to fully reflect the needs of system users in our operations. The
Committee examines important issues related to the businessof JASDEC, based on queries from the Board of Directors, andhas ten subcommittees under its control. Each subcommittee is
responsible for a specific segment of operations, and is composedof members who are actually involved in the field. JASDEC applies
the opinions provided by each subcommittee to various operational
issues. JASDEC discloses summaries of discussions and otherinformation by the committees to relevant parties for greater
operational transparency.
As the provider of key infrastructure elements for the securities
market, we are required to operate the system with an extremely
high level of fairness and accountability. To achieve this end, we
have established the Advisory Committee, which is composedof experts in financial and securities systems. The committee
advises JASDEC’s president from a broad perspective about wideranging issues relating to securities clearing and settlement system
operations. JASDEC DVP Clearing Corporation (JDCC), JASDEC’s
wholly owned subsidiary, operates in accordance with a businessphilosophy similar to that of JASDEC. JDCC has also set up acommittee for reviewing important issues regarding DVP operations
to reflect the needs of users of the DVP settlement system for nonexchange transaction deliveries (NETDs). In addition, JASDEC’s
Board of Directors receives reports regarding issues decided by
JDCC’s Board of Directors to ensure consistency in the activities of
the two companies.
An outline of JASDEC’s management structure and corporate
governance systems is presented on the next page.

• Audit & Supervisory Board
JASDEC employs the Audit & Supervisory Board system forcorporate governance instead of the committee system, as provided
for in the Companies Act. The Audit & Supervisory Board is madeup of three Audit & Supervisory Board Members, two of whomare selected from eligible participants (one each from a securities
company and a bank) and all three (including an Audit & Supervisory
Board Member who is serving on a full-time basis) are external Audit& Supervisory Board Members. In principle, the Audit & Supervisory
Board holds a regular meeting each month. In line with auditing plans
and the basic policies established by the Audit & Supervisory Board,
Audit & Supervisory Board Members attend important meetings,
including those of the Board of Directors, and assess the status ofservices and assets to perform audits of directors. To ensure that
audits are effective, Audit & Supervisory Board Members work
closely with directors and conduct regular exchanges of opinions,
including through meetings with the representative directors.

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

Appointments/
Dismissals

Audit & Supervisory Board(Three including one Audit & Supervisory
Board Member serving on a full-time basis)
Reporting
Auditing

Business Operations Committee

Auditing

Audit & Supervisory
Board Member’s OfficeAppointments/
Dismissals

Auditing

Board of Directors(Five full-time, fourteen external)
Appointment/
Supervision

Opinions, reports

ChairmanPresident & CEO
Risk Management
Committee

Accounting auditors

Subcommittees

Consultation

Monitoring

Compliance
OfficeConveying
information

Stock
Bond with share option
ETF
Foreign stock
Corporate bondCP
Investment trust
PSMS (Domestic Trade)
PSMS (Non-Residents’ Trade)ISO 20022

Internal
audit

Departments

Risk Management System

Internal Audit, Audit & Supervisory Board
Member’s Audit, and Accounting Audit
JASDEC has established the Compliance Office, and internal
auditing accomplished primarily through onsite surveys based on
the audit plan, to assess the effectiveness of operational procedures.
For Audit & Supervisory Board Member’s audit, an Audit &Supervisory Board Member serving on a full-time basis routinely
attends important meetings, such as those of the Board of Directors
and the Executive Committee (comprised of managing directors
serving on a full-time basis) and examines circulars intended toobtain approvals of decisions by persons in charge. The Standing
Audit & Supervisory Board Member performs audits in accordancewith the auditing plans established by the Audit & Supervisory
Board, and provides the other Audit & Supervisory Board Memberswith updates on the progress of auditing activities at the meeting ofAudit & Supervisory Board, which takes place monthly.
Audit & Supervisory Board Members serving on a part-timebasis attend meetings of the Board of Directors and monitor the
directors’ execution of their duties. They also assess the legality ofbusiness operations by reviewing reports on auditing activities fromthe Standing Audit & Supervisory Board Member.
JASDEC assigns staff specifically to assist Audit & Supervisory
Board Members in their audits.
Audit & Supervisory Board Members perform audits in close
cooperation with the Company’s accounting auditors. This includes
hearing reports from the accounting auditors on auditing plans andAdvisory Committee

the results of the audits.
The accounting audits for JASDEC in the year ended March 31,
2013 was performed by two certified accountants in the capacity ofaccounting auditor under the Companies Act: Yohei Kishi and Masato
Saito (designated members of a limited liability partnership under
Article 34, Paragraph 10-5 of the Certified Public Accountants Law).
They are employed by Ernst & Young ShinNihon LLC, a member
firm of Ernst & Young Global, and execute accounting audits,
including checks of financial documents, based on the Companies
Act. It is our understanding that no items of particular regard, suchas serious irregularities or instances of illegal behavior, have beenfound through the execution of accounting audits.

Directors’ and Audit & Supervisory Board
Members’ Limit of Liability
We expect directors and Audit & Supervisory Board Members to
fully demonstrate the skills involved in successfully executing their
responsibilities. Additionally, to retain top-level professionals, wehave set limits on liability for damages incurred by directors andAudit & Supervisory Board Members.

Resolutions on Election/Dismissal of Directors
The election of directors by resolution at the general meetingof shareholders is conducted in the presence of shareholders
representing no less than one-third of voting rights held by
eligible shareholders, and directors are elected by a majority voteof said shareholders.
The dismissal of directors by resolution at a general meetingof shareholders is conducted in the presence of shareholders
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.

13
Annual Report 2013

JASDEC has set up the Risk Management Committee, chairedby the president. It takes measures to strengthen overall risk
management, and regularly monitors internal control systems forvarious risks.

AdviceBusiness Continuity Plan of JASDEC

14
Annual Report 2013

Our approach

IT backup system

JASDEC has regularly structured itself so that, in theevent of a disaster or other emergency, it would be
able to continue operations to the extent possible andpromptly resume business operations according to its
Basic BCP policy. This is to minimize the effect of suchan emergency on JASDEC participants and related
entities as a settlement infrastructure.
The specific measures taken by JASDEC include
formulating concrete action plans in advance.
JASDEC has defined actions to be taken in the eventof a disaster or other emergency, established BCP
Countermeasure Office, delegated authority, organized
emergency contact networks, and so on. Our IT
systems are installed in a robust main center equippedwith a private electrical generator, and our core systems
are based on a redundant configuration. Furthermore,
we have built a backup center in a remote location to
be prepared in case the main center becomes unusable
due to a large-scale disaster or the double failure ofequipment with a redundant configuration, or othersuch event.

Operations data of the main center is reflected at the
backup center almost in real time. In cases where
the main center becomes unusable due to a disaster,
infrastructure failure (excluding software failure) or othersuch event, and the restoration task is deemed to betime-consuming, the systems will be switched overto the backup center. Switchover to backup systems
will take about 90 minutes. Furthermore, to prepare
for the prospect of the head office building becoming
unusable, we have established an alternative officewhere we can execute operations as necessary.

Future approach
JASDEC has been able to continue operations despite
the Great East Japan Earthquake in 2011, as neither its
employees nor its facilities were affected. We will strive
to establish a more robust business continuity plan
based on the lessons learnt from the earthquakes, etc.

Conceptual Diagram of System
Switch about 90 minutes

Main Center

Backup Center

Dedicated line,
ISDN, Wide Area Ethernet (Optical line)

SWIFT Net
Integrated channel
gateway(Online real-timesystem, Channel
file system)

File transfer
gateway

Users

Integrated
web terminal

Participant
information web
terminal

Japan Securities
Clearing
Corporation(JSCC)

Japan Government
Bond Clearing
Corporation(JGBCC)Bank of Japan
Financial Network
System(BOJ-NET)

Business
Overview
01

Custody Services for
Foreign Stock Certificates, etc.
¥152 million
Pre-settlement Matching System (PSMS)

Book-Entry
Transfer System
for Stocks, etc.
P16

¥1,322 million
DVP Settlement System for NETDs

02

Book-Entry Transfer
System for Commercial
Paper andCorporate Bonds P20

03

Book-Entry
Transfer System for
Investment Trusts

P24

04

DVP Settlement
System for NETDs¥511 million

Revenues by
Operation
Year ended March 31, 2013

Book-entry Transfer forCommercial Paper



P27

Pre-Settlement
Matching System(PSMS)


P30

Custody Services
for Foreign Stock
Certificates, etc.
P33¥463 million

05

Book-entry Transfer System for
Corporate Bonds¥1,212 million
Book-entry Transfer System for
Investment Trusts

06¥1,055 million
Book-entry Transfer System
for Stocks, etc.
¥12,602 million

Business Overview

01

Book-Entry
Transfer System
for Stocks, etc.
Ongoing enhancements to this allelectronic record system are bringing
greater convenience, speed, andflexibility to stock ownership transfers.

16
Annual Report 2013

The Book-Entry Transfer System for Stocks, etc.

Issuing company
Shareholder registry
General Shareholders
Notification

JASDEC
Transfer
Account
Book

Book-entry transfer

Direct AccountManagement Institution

Transfer
Account
Book

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

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

Participants(shareholders)Participants(shareholders)Participants(shareholders)01 Book-Entry Transfer System for Stocks, etc.

The Book-entry Transfer System for
Stocks, etc., has been operating smoothly
As of March 2013 the total number of issues handled
was 3,753, including 3,561 share issues, 16 bonds withshare options, 8 share options, 41 investment units,
one preferred share issue, 106 ETFs, and 20 JDRs.
The number of companies participating in the bookentry transfer system, including JASDEC participants,
indirect AMIs, and fund settlement corporations, etc.,
was 383, including 58 foreign financial institutions as
indirect AMIs.

The dematerialized Book-entry Transfer System for
Stocks, etc., launched in January 2009 has been
operating smoothly. The system is based on electronic
records registered and managed by computer systems
within accounts opened at JASDEC or AccountManagement Institutions (AMIs) such as securities
companies and banks. Instead of stock certificates,
these computer records represent share ownership.
Transfer of shareholders’ rights is also processed
electronically based on the records in the accounts.
This dematerialization system applies not only to stock
certificates, but also to bonds with share options, shareoptions, investment units of Real Estate Investment
Trusts (REIT), preferred equity investment of financial
institutions established by cooperative associations,Exchange Traded Funds (ETFs), Japanese Depositary
Receipts (JDRs, etc.), and other negotiable securities.

17
Annual Report 2013

JASDEC participants and indirect AMIs (as of March 31, 2013)
JASDEC participants by category
Securities financecompanies
3 (2%)

Indirect AMIs by category

Banks, etc.
17 (17%)

Total

Total

101

189

Life & non-life
insurancecompanies
1 (1%)
Banks, etc.
20 (10%)companies

companies
Securities
companies, etc.
154 (81%)

Foreign indirect
AMIs
58 (57%)

Securities
companies, etc.
26 (26%)Book-entry
transfers

Book-entry
transfers■ Stock-exchangetransfers(Billion shares)
400

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

Stock exchanges, etc.
11 (6%)

369.0(Billion shares)
1,500

345.1

321.0

718.0

695.1

333.7

797.2
669.4

300

■ Transfers between
JASDEC participants■ Internal transfers
within the same
companies

1,000
200
500
100

0

308.5

670.1

677.4

652.5

656.8

84.4

(FY) 2008

2009

2010

2011

2012

*Figures include the
Depository and Bookentry Transfer System
for Stock Certificates.

0

175.7
(FY) 2008

2009

2010

2011

2012

*Figures include the
Depository and Bookentry Transfer System
for Stock Certificates.

Ongoing enhancements
to increase user convenience18
Annual Report 2013

JASDEC has organized three subcommittees to
examine further improvement of the book-entry
transfer system: the Subcommittee for Stocks, theSubcommittee for Bonds with Share Options, andthe Subcommittee for ETFs. These committees havepromoted a number of initiatives.
In April 2012, to increase efficiency and facilitateprocedures for commitment type rights offerings, wedeveloped a system to enable uninterrupted handlingof share options under the book-entry transfer system
until commitment securities companies finish exercising
share options. With the previous system, handling ofthese share options was closed on the day the issuing
company acquired all unexercised share options basedon the call provisions. For this reason, it was necessary
to handle both the subsequent transfer of the shareoptions from the issuing company to commitment
securities companies and the exercising of the share

Bond with share option account balance andnumber of issues

Stock account balance andnumber of issues(Billion shares)(Issues)

420

418.6

412.9

406.8

404.6

394.8
3,839

380

340

■ Balance in custody(end of FY)● Number of issues(end of FY)

2009

2010

3,581

3,600
3,561

2011

2012

(Million accounts)

2,100

0

2,339

1,400

111

1,873

66

■ Account unit balance(end of FY)● Number of issues(end of FY)

105

77

70

35

0

0

2009

2010

70
1,154.5

1,211.5

1,168.1

2011

2012

*Figures include the
Depository and Bookentry Transfer System
for Stock Certificates.

0

60

43

40
499.6
16

(FY) 20082009■B alance in custody(end of FY)●N umber of issues(end of FY)

959.7

400

93

700

(FY) 2008

8027*Figures include the
Depository and Bookentry Transfer System
for Stock Certificates.

(Issues)
2,791
140
126

2,563
2,306

(Issues)

800

Exchange Traded Fund (ETF) etc., account balance andnumber of issues
2,800

1,600

1,200

3,400

(FY) 2008(Billion yen)

50

300

0

4,000

3,800

3,727
3,640

options by the securities companies outside the bookentry transfer system.
In February 2013, to increase efficiency and reliability
for users holding and exercising unlisted bonds withshare options and share options, we developed asystem to handle all unlisted bonds with share options
and share options issued by listed companies underthe book-entry transfer system, in the same way listed
securities are handled. Among the unlisted bonds
with share options and share options issued by listedcompanies, only those which were allocated to financial
institutions were previously handled through the bookentry transfer system.
These new measures have enhanced convenienceand safety for users. We will continue our efforts tocommunicate effectively with relevant parties, aiming toensure stable operation while meeting the needs of themarket for convenience and user-friendliness.

2010

2011

2012

20

0

*Figures include the
Depository and Bookentry Transfer System
for Stock Certificates.

01 Book-Entry Transfer System for Stocks, etc.

General shareholder
notifications

Number of issues andtotal shareholders■ General shareholder
notifications(Notifications, in billion)
1,000

1,001.1

946.3

972.8

(Thousand shares)
150,000

947.3

800

(Issues)
127,240

90,000

400
200
20.8

0

(FY) 2008

2009

2010

2011

2012

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

Individual shareholder
notifications(Issues)

2,800

2,697

2,656

2,428

2,100

8,597

412

1,400

700

■ Number of notices● Number of issues

800

401

3,000
4,094

551

(FY) 2008

600

13,500

400

9,000

2011

0

2012

3,069

3,000

0

(FY) 2008■ (Total record) notifications■ (Partial record) notifications

2,500
2,000

1,857
1,589
1,155

1,000

0

131 45(FY) 2008

356
2009

477

2010

375
2011

521

2012

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

Information requests(Number of issues)(Issues)482

500● (Total record) number of issues● (Partial record) number of issues

400
314
300

302

212
200
79

87

77

2009

2010

2011

27
16
(FY) 2008

2011

2012

0

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

57
2012

■N
 umber ofshareholders
16,287

16,45916,727

17,063*Requests for information (total record) refer to requests fordata recorded on book-entry transfer registries of either
JASDEC participants (direct AMIs) or indirect AMIs where
shareholders in question have opened accounts. Requests for
information (partial record) refer to requests for data recorded
solely on book-entry registries of JASDEC participants where
shareholders in question have opened accounts.
*FY2008 represents figures between January and March
2009.

2009

2010

2011

2012

*Number ofshareholders (datafor shareholder
notifications) iscomprised ofparticipant information
notified by AMIs.
*Figures are as of endof fiscal year.

19
Annual Report 20132010

(Notifications)

500

2010

4,500
*FY2008 represents
figures between
January and March
2009.

Information requests(Notifications)

1,500

2009

(Thousand notifications)

14,93572
2009

30,000
0

9,000
6,000

18,000200359(FY) 2008

8,723

60,000

720

1,958
448

0

8,888

Number of shareholders(Data for shareholder notifications)(Notifications)100

125,694
12,0009,260

015,000129,619 127,292

120,000

600●N umber of issues●T otal shareholders

Business Overview

02

Book-Entry
Transfer System forCommercial Paper andCorporate Bonds
JASDEC is maintaining the security of CP
and corporate bond electronic book-entry
transfer system whose daily settlement value
typically surpasses the trading value per day
at the Tokyo Stock Exchange.

20
Annual Report 2013

Flowchart for Book-Entry Transfer for CP/Corporate Bonds (DVP)① TradeSeller
② Trade matching③	Notice of settlement
matching status

Settlement
parties

Buyer

JASDEC④	Notice of settlement status(Awaiting fund settlement)

Affirmation
Settlement matching
Pre-Settlement
Matching System

Securities transfer② Trade matching③	Notice of settlement
matching status④	Notice of settlement status(Awaiting fund settlement)

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

Fund
settlement
corporation⑧ Notice of receipt completion⑤ Payment instruction

Bank of Japan⑥ Payment request⑦ Payment instruction

Fund
settlement
corporation

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

Supporting seamless and secure CP
and corporate bond settlement
As a means of managing participation in JASDEC’s
book-entry transfer system, we set up a multilayer
holding structure for Account Management Institutions(AMIs) to address the diverse needs of participating
investors and financial institutions. For example, direct
AMIs can open an account directly at JASDEC andindirect participation is possible by opening an accountat a direct AMI. Another option for indirect participationis through the opening of an account at an indirect AMI.
Principal and interest payments to bondholders are
made in accordance with the multilayered structure,
where AMIs receive payments from paying agents ortheir upper AMIs on behalf of their bondholders.

In March 2003, JASDEC launched the Book-entry
Transfer System for Short-Term Corporate Bonds(dematerialized CP), and this was followed by the launchof the Book-entry Transfer System for Corporate Bonds
in January 2006. In each system, custody procedures—issuance, transfer (trading), and redemption—are
conducted based on the balance electronically recordedin the transfer account books. In addition, all transactions
related to issuance, transfer, and redemption of CP
and corporate bonds can be processed by the DVP
settlement link with the Bank of Japan Financial Network
System. By linking the book-entry transfer system with
its PSMS (Pre-Settlement Matching System; see page30), JASDEC has realized Straight Through Processing(STP), which fully automates the entire process, including
trade matching and fund/securities settlement.

21
Annual Report 2013

Participants in Book-Entry Transfer System for CP (as of the end of March 2013)
Issuers 494

Issuing/
paying agents

20

JASDECJASDEC
Participants(Direct AMIs)

67

Fund settlement corporations 142

Indirect
AMIs

45

CP holders

A decade of CP
transaction efficiency

22

Commercial Paper (CP) currently refers to short-term
corporate bonds in a dematerialized form issued bycorporate entities as a means of procuring short-term
funds. As CP was previously drawn as promissory
notes in physical form, there were always somerisks of theft or loss when notes were transferred ordeposited, as well as costs of a documentary stamp
tax upon transfers. To eliminate such risks and costs,
the fully electronic book-entry transfer system fordematerialized CP was launched in 2003. Ten years
after the launch, almost all CP issued in Japan ishandled by this system.
During fiscal 2012 (to March 31, 2013), our accountbalance held at around ¥16 trillion on average, thesame level as throughout most of fiscal 2011, mainly
as a result of recovery in issuance by corporate entities

Annual Report 2013

CP account balance (nominal value) andnumber of issues(Trillion yen)
5,869
25
20

18.7

(Issues)
6,000
4,730

14.1

15

4,392
14.0

3,926
13.6

2010

2011

■R
 edemptions■T ransfers■ Issuance(Trillion yen)
6.0
0.5
4.3

0.4
4.2

4.0

13.7

2,000

2009

● Number of issues(end of FY)■ Account balance(end of FY)

4,000

5

(FY) 2008

Issuance, transfer andredemption of CP (daily average)

4,447

10

0

in general following the Great East Japan Earthquake,
despite a decrease in issuance by financial institutions
and electric power and gas companies. However,as of March 31, 2013, the total account balance
had significantly declined to ¥13,760 billion (a ¥145
billion increase from the end of FY2011) because of
a combination of seasonal factors at the fiscal yearend. The number of issues stood at 3,926 issues (a 521
issues decrease from the end of FY2011).

2012

0

*Nominal value isthe value at time ofissuance (based on
the amounts for each
bond)

0.4
3.8

0.5
4.0

0.4
4.1

0.5

0.4
2012

2.0

0

0.5
(FY) 2008

0.4
2009

0.4
2010

2011

Continually adapting to
CP market needs
The settlement amount of issuance, transfer, andredemption of CP handled by JASDEC’s bookentry transfer system averages ¥5 trillion per day. In
combination with month-end settlements of morethan ¥10 trillion, this means that JASDEC settlements
surpassed the daily trading value at the Tokyo Stock
Exchange. In fiscal 2012, the annual aggregate
settlement amount surpassed ¥1,000 trillion, marking

active trading at the highest level since fiscal 2009.
This huge settlement amount reflects the importanceof CP, which accounts for the bulk of fundraising by
business entities in Japan. JASDEC is willing to continue
its practice of maintaining a high level of safety in thebook-entry transfer system of CP, a matter of criticalimportance for securities settlement infrastructure, while
rapidly reflecting market needs in the system.

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

Expansion of bond types
handled by JASDEC
Nevertheless, a slowdown in redemptions contributed
to a nominal account balance of ¥256.1 trillion reachedon December 19, 2012, the highest since the start ofthe system. As of March 31, 2013, the number of bonds
eligible in the system was 58,486 issues (a 2,215 issues
decline from the end of FY2011), and the nominal
account balance stood at ¥252.7 trillion (a ¥0.3 trillion
increase from the end of FY2011).
In January 2013, a special reconstruction income
tax was instituted accompanying the promulgation of
the Act on Special Measures for Securing Financial
Resources Necessary to Implement Measures for
Reconstruction Following the Great East Japan
Earthquake. In order to respond this taxation, we
implemented the required system arrangement
concerning principal and interest processing.

Outstanding balance of corporate bonds andnumber of issues(Trillion yen)
73,298400(Issues)
71,20275,00067,78860,701

300
240.2

245.5

250.0

252.4

58,486252.7●N umber of issues(end of FY)■O utstanding balance(end of FY)

50,000200
25,000100

0(FY) 2008

2009

2010

2011

2012

0

Participants in Book-Entry Transfer System for Corporate Bonds (as of the end of March 2013)
Issuers 2,613*

Issuing/
paying agents

203

JASDECJASDEC
Participants(Direct AMIs)

86

Fund settlement corporations 142

Indirect
AMIs

435

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

23
Annual Report 2013

JASDEC’s Book-entry Transfer System for Corporate
Bonds handles various types of bonds, both throughpublic offerings and private placements. These include
bonds issued by corporate entities, municipal bonds,
bonds issued by investment firms, specified bonds
issued by special purpose companies (SPCs), bondsof special corporations, such as quasi-government andlocal government bodies, and Samurai bonds (yendenominated bonds issued in the Japanese bond market
by foreign governments or entities) and others. In fiscal
2012, based on the special purpose trust beneficiaryrights structure, we included J-Sukuk (Islamic financial
instruments similar to bonds) in the eligible bonds.
Fiscal 2012 marked the issuance of the first
corporate bonds of a mutual company under the
Insurance Business Act since the start of the system.
Also, the type of bonds issued has expanded toinclude, for instance, corporate bonds denominated in
Hong Kong dollars.
Furthermore, in the FY2013 Tax Reform, thecorporate bond income tax exemption scheme wasmade permanent, with partial exceptions. This improved
the environment for investment in Japanese corporate
bonds and other instruments by foreign investors.
The amount of new issues in fiscal 2012 wasequivalent to the amount in fiscal 2011, which wasdepressed by the effects of the Great East Japan
Earthquake and European sovereign debt crisis.

Business Overview

03

Book-Entry
Transfer System for
Investment Trusts
JASDEC is streamlining the process
for trustors, trustees and beneficiaries,
ensuring security and convenience
for a system that serves virtually all
investment trusts in Japan.

24
Annual Report 2013

Basic Model of Book-Entry Transfer System for Investment Trusts

Flow of funds
Flow of data

Investors(beneficiaries)

Private vendor financial network systems/fax

Fund
distributors

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

AMIs

Fund settlement
corporations(BOJ-NET Fund
settlement
corporations)

JASDECBank of Japan
Japanese Banks’
Payment Clearing
Network

Trustees

Fund settlement
corporations(BOJ-NET Fund
settlement
corporations)

03 Book-Entry Transfer System for Investment Trusts

A faster, safer approach toinvestment trust administration
The Book-entry Transfer System for Investment Trusts
is a computer system for managing beneficial rights ofinvestment trusts.
The system covers contract-type investment trusts(hereinafter, simply called “investment trusts”), which
involve three parties—a trustor, a trustee, and abeneficiary who is an investor in the investment trust.
(Exchange Traded Funds (ETFs) and investment trustsof the non-trustor instruction type are outside the scopeof the system.) Since the system was launched on
January 4, 2007, all trustors and trustees involved ininvestment trusts have participated in the system, andthus almost all investment trusts issued in Japan havebeen dematerialized.
In the Book-entry Transfer System for Investment
Trusts, the Account Management Institutions (AMIs)

and JASDEC participants are diverse, consisting of
not only securities companies, but also entities suchas banks, insurance companies, Shinkin banks, credit
cooperatives, agricultural cooperatives, and investment
trust management companies engaged in direct
marketing. The total number of AMIs and JASDEC
participants was 852 companies as of March 31, 2013.
The Book-entry Transfer System for Investment Trusts
enables direct or indirect connection between trustors,
trustees, AMIs and JASDEC. This ensures greater
security, accuracy, and speed of processing through theelectronic management of the accounts of investment
trust beneficiaries.
25
Annual Report 2013

Participants in Book-Entry Transfer System for Investment Trusts (as of March 31, 2013)
Issuers 85

Trustees 10

JASDECJASDEC Participants 175

BOJ-NET Fund settlement corporations

Designated fund distributors 350

45

Indirect AMIs 677

Indirect AMIs

JASDEC ParticipantsLife and non-life
insurance companies
11 (2%)

Others1 (0%)

Securities companies
68 (10%)Banks
95 (14%)

Investment
trust managementcompanies 3 (0%)

Others8 (5%)

Investment trust
management companies
19 (11%)

Total

677

Financial institutions
for small businesses
10 (6%)

Total

175

Financial institutions
for small businesses
499 (73%)Banks
37 (21%)*Others: Securities agents, securities exchanges, CCPs, call loan dealers, etc.

Life and non-life
insurance companies
6 (3%)

Securities companies
95 (54%)

03 Book-Entry Transfer System for Investment Trusts

Strong support from users

26
Annual Report 2013

The total number of investment trusts handled by
JASDEC as of March 31, 2013 was 7,112 issues (a244-issue increase from the end of FY2011), comprising
4,336 publicly offered and 2,776 privately placed
investment trusts. The transaction volume undertaken
for both new registrations (purchases) and deletions(cancellations and redemptions) achieved record highs.
In terms of the transaction value on a principal value
basis, which subsequently remained at low levels
during the year 2012, improvement in the investment
environment early in 2013 resulted in the highest levelof new registrations and deletions in five years, withthe principal value of new registrations above that ofdeletions.
As a result, the outstanding balance at the end of fiscal
2012 had increased ¥2.8 trillion year on year to ¥115.3
trillion, comprising ¥83.3 trillion in publicly offered and ¥31.9
trillion in privately placed investment trusts.
Fund settlement systems in the Book-entry Transfer
System for Investment Trusts include DVP settlement(using the Bank of Japan Financial Network System)and non-DVP settlement (using the Japanese Bankers
Association’s financial network system for online fundsettlement between financial institutions). The use of
DVP settlement, which involves lower settlement risk,has been increasing steadily among system users. In
fiscal 2012, the proportion of settlements using DVP was
26% by transaction volume and 62% by principal value.

Book-entry transfer of investment trusts—account balance and number of issues(Trillion yen)

(Issues)

150
5,906
105.5

100

6,297
110.2

6,575

7,112

6,868

114.9

112.5

115.3

8,000

6,000

4,000
50
2,000
0

(FY) 2008

2009

2010

2011

2012

0

(Transactions)
7,634
6,906 6,710
6,293
6,064
5,417 5,685
5,127 5,118
4,769

8,000

6,000

■P
 urchases■C ancellations/
Redemptions

4,000

2,000

0

(FY) 2008

2009

2010

2011

2012

Principal values of investment trusts for purchases andcancellations/redemptions (Daily average)■P urchases■R edemptions(Billion yen)
400

300

341.5
326.7
289.6
311.0
301.9
288.5 282.5
280.0
260.3 259.3

2000

In fiscal 2012, as in fiscal 2011, we developed operating
rules regarding the system change, which will simplify
the transaction procedures for fund distributors. In
fiscal 2013, we plan to announce and implement these
operating rules. JASDEC will continue to implement
measures that enhance the user-friendly Book-entry
Transfer System for Investment Trusts, while maintaining
the high level of safety required for settlement
infrastructure.

Account balances
are calculated bymultiplying the principal
amounts for eachissue by the number ofaccounts

Purchase and cancellation/redemption transactions(Daily average)

100

Dedicated toongoing improvement●N umber of issues(end of FY)■A ccount balance(end of FY)(FY) 2008

2009

2010

2011

2012

Business Overview

04

DVP
Settlement System
for NETDs
JASDEC has combined delivery andpayment into a single, smooth reciprocalsystem, reducing risk and raisingconvenience for participants on bothsides of the trade.
27
Annual Report 2013

Reducing Principal Risk by Using the DVP Settlement Method

Delivery of securities

Seller

Buyer

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

Use of DVP settlement

Account delivery through JASDEC
Seller’s
account

Securities
data

Account of JASDEC
DVP Clearing Corp.

Stocks data transfer and payments are linked on

Securities
data

Buyer’s
account

the system, enabling secure and reliable settlement

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

Funding data

Account of JASDEC
DVP Clearing Corp.

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

Funding data

Buyer’s
account

Providing safe,
secure securities transactions

28
Annual Report 2013

The Non-Exchange Transaction Deliveries (NETDs)
refer to Book-entry Transfers for Stocks, etc., carriedout by JASDEC for non-exchange transactions, andthe majority of them consist of such trades of domestic
and overseas institutional investors buying and sellingJapanese stocks, etc., through the DVP settlement
system for NETDs.
Previously, the delivery of the securities and thepayment of the settlement amounts for non-exchangetransactions have mostly been processed separately,
so the transactions have been exposed to the risk(principal risk) that settlement payments may not bemade even though the securities have been delivered.
The use of the DVP settlement system for NETDs links
the delivery of the securities and the payment of thesettlement amounts through the system, diminishing
the risk and making it possible for securities settlements
to be conducted safely and reliably. To further support
reliability, the entire administrative process is handled
automatically and electronically using Straight ThroughProcessing (STP).
Since May 2004, the DVP settlement system for
NETDs has been administered by JASDEC’s wholly
owned subsidiary, JASDEC DVP Clearing Corporation(JDCC). JASDEC participants applying to make use of
the system are examined for their suitability in terms offinancial condition, organizational structure and othersuch factors before receiving authorization from JDCC.

DVP settlement for NETD transactions(Daily average)■ Non-DVP
transactions■ DVP transactions(Transactions)
200,000

100,41159,374150,000

100,000

96,301

56,186

48,53745,57084,883

83,29982,52280,235

2009

2010

2011

2012

50,0000(FY) 2008

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

In order to ensure stringent risk management of
all participants, JDCC secures collateral in advance,
comprising assets (assurance assets) with the appraisal
value that exceeds the net debit (total payables - total
receivables) of each participant, and sets an upper limit
to the value of the liabilities payable (the net debit cap)
in proportion to the trading status of each participant.
Settlement within the DVP settlement system for
NETDs is conducted in accordance with the so-called“Gross - Net DVP model” system by which securities
pass through the JDCC account within JASDEC andthe transfer of the securities from the seller’s into thebuyer’s account is conducted separately for eachtransaction (gross). Meanwhile, the settlement amounts
pass through the JDCC’s account within the BOJ-NET
funds transfer system, and settlement is concluded by
the appropriate net calculated amount of funds being
paid on each settlement date (net).

04 DVP Settlement System for NETDs

Establishing key settlement procedureson the customer side
The DVP settlement system for NETDs mainly deals withsecurities handled by JASDEC through its Book-entry
Transfer System for Stocks, etc., such as shares andbonds with share options, etc.
As of the end of March 2013, 52 companies(comprising 12 banks and 40 securities companies) wereparticipants in the DVP settlement system for NETDs.
Excluding internal transfers within the same company,
DVP transactions accounted for more than 60% of
NETD transactions—evidence that use of the system has

become firmly established as an important customerside settlement method.
JDCC’s basic policy is to provide cost-effective
services to users, and in April 2012, we lowered the DVP
settlement fee per transaction by ¥3 to ¥17. Also, in
consideration of steady growth in the use of the system,
we refunded ¥8 of the ¥17 DVP settlement fee pertransaction for the period from April 2012 to February
2013 in accordance with the participant’s usage level.

DVP settlement for NETD fund settlement(Daily average)(Billion yen)

(%)

1,500

15

1,294.7

12.2

1,000

948.5

963.7

11.9

844.2

12.7

876.2

500

5
166.3

0

10

(FY) 2008

116.6
2009

118.0
2010

100.1
2011

111.3
2012

0

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

Reducing settlement risks forstock lending transactions
The Financial Services Agency identified a number ofurgent measures needed to strengthen the clearing
and settlement system for stock lending transactionsin “Development of Institutional Frameworks Pertaining
to Financial and Capital Markets,” published in
January 2010.

Based on this information, we are currently
preparing for the introduction of DVP settlements inJanuary 2014 with the aim of reducing settlement risks
for stock lending transactions.

29
Annual Report 2013

12.3

12.8

■ Total of payments■ Total value of net settlement payments● Rate of reduction (Total value of net settlement payments/
Total payments × 100)

Business Overview

05

Pre-Settlement
Matching System(PSMS)
Amid steady growth, JASDEC isreadying the next-generation systemwith features for global settlement
support, including IS0 20022 standard
and addition of SWIFTNet.

30
Annual Report 2013

Stock exchanges
Figure 1. PSMS for Domestic Transactions (Centralized Matching for Tri-Parties)

Notice of execution

Order

Order

Investment trust
management/
advisory
companies

Notice of execution
Allocation

Pre-settlement
matching system
Investment instruction
Notice of matching status

Trade report

Trade matching*1
Notice of matching status

Investment instruction andtrade report
Trade report affirmation

Affirmation/
Disaffirmation

Notice of trade reportaffirmation status

Securities
companies

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, etc., and CBs, corporate bonds and CP(excluding Japanese government bonds)*2*1 In 2014, DVP settlement for stock lending and borrowing transactions will be available.
*2 ‌In 2014, JASDEC will support trade matching function for tri-parties in lending and borrowing trades and “gensaki” trades of Japanese government bonds.

05 Pre-Settlement Matching System (PSMS)

Pre-Settlement Matching System (PSMS) is aimed to provide smoothand safe matching infrastructure in Japanese securities market.
March 2013 was 684, seven fewer than the number in theprevious year. In fiscal 2012, the number of input/output
transactions on a daily average was 1,353,350, which isabout the same amount of transactions of the previous year.

Total number of PSMS input/output instructions
using the PSMS system (Daily average)(Thousand)
1,600

1,503
1,327

1,315

1,360

1,353

1,200

800

31
400

0

(FY) 2008

2009

2010

2011

2012

Complying with international standards, reducing settlement risk,
and enhancing user efficiency; committing with these goals,
PSMS is moving forward.
In 2014, PSMS will take a new step. JASDEC will
implement new functions and introduce new features,
including adoption of the new international standards, inthe new PSMS scheduled for launch in January 2014.
Currently, JASDEC uses ISO 15022, messaging
standard defined by the International Organizationfor Standardization (ISO). Though it is based on
the standard, the message consists of several
customizations, in order to meet unique requirementsin the Japanese market community. To achieve
the greatest possible degree of harmonization withinternational standards and the connectivity withoverseas systems, we decided to bring the new system
into full compliance with the latest international standard.
As one of the first major adoptions in the world, JASDEC

will leverage ISO 20022, the new international standard
for financial messaging, in the new system.
Not only to precede the implementation of ISO 20022,
JASDEC is participating as a member in consultation of
ISO and striving to ensure the compatibility of Japanesemarket practices and international standards. Regarding
the existing message formats, JASDEC will deliver a coexistence period until the end of 2018, providing users
with greater choice of system migration based on their IT
investment plans.
In addition, JASDEC will bring in SWIFTNet, usedwidely around the world, which will realize greater choiceand smooth overseas connectivity, further increasinguser convenience and the number of participants.
Another key project JASDEC is engaging is theAnnual Report 2013

Matching process for institutional investors in securities
trade is a complex undertaking, due to the wide range oforganizations involved—including investment managers,
securities companies, trust banks, and custody banks—
and the huge amount of transaction data exchanged
between them. In the past, it was done manually by fax ortelephone. Now, the process has been modernized andautomated, with JASDEC providing centralized matching
services using sophisticated computer systems.
PSMS is aimed to provide smooth and safe
matching infrastructure in Japanese securities market,
contributing to further growth of Straight ThroughProcessing (STP) transactions.
Since launching the initial system in September 2001,
we have been increasing the range of asset classes andservices covered by the system.
Due to mergers among financial institutions and otherfactors, the number of registered users as of the end of

05 Pre-Settlement Matching System (PSMS)

32
Annual Report 2013

reduction of settlement risk. Since 2008’s financial
crisis, there has been growing discussion about further
mitigation of settlement risk. Along with these efforts,
JASDEC will introduce DVP settlement for stock lending
and borrowing transactions leveraging existing DVP
system for equity cash transactions (see Figure 1).
JASDEC has been continuously improving its user
efficiency by bringing significant enhancements to thematching process. In non-residents’ transactions, JASDEC
will introduce “Tolerance Matching” function, which has
already prevailed among major overseas markets, boostingsmooth settlement practices among foreign investors,
domestic and foreign custody banks, and securities
companies. With this function, when there is a slight
discrepancy in settlement amounts, which is within thetolerance amount limit (¥100, without exception), PSMS willassume the instructions to be “Matched” and proceed tofollowing process (see Figure 2).
In domestic transactions, JASDEC will support thetrade matching function for tri-parties (institutional
investors, trust banks, and securities companies) in
lending and borrowing trades and “gensaki” trades ofJapanese government bonds (see Figure 1), which follows
the recent discussion of shortening settlement cycle of
JGBs among market related parties.
This fiscal year, we have made progress on preparation
for the new system. Considering the globalization ofsystem development process among financial institutions,
we have translated relevant PSMS specification
documents into English. In addition, as the financial
industry around the world becomes more interested
in market practices for cross-border trades, we havemade the message format specifications of PSMS nonresidents’ transactions public on “MyStandards,” SWIFT’s
web-based platform service.
In order to put the new function and features into
practice and to promote better understanding of themamong the market participants, we also updated market
rules regarding PSMS.
JASDEC is continually building conformity withinternational standards, contributing to greater
efficiency, and reducing settlement risk in the Japanese
securities market.

Figure 2. PSMS for Non-Residents’ Transactions
Overseas

GlobalcustodiansJapan

Settlement
instruction

Investment
managers

Order
Notice of execution
Allocation, matching

Settlement
instruction

Settlement instruction

Settlement
instruction

Subcustodians

Notice ofmatching status

Pre-settlement
matching system*

Settlement
instruction
Notice ofmatching status

Request for DVP transfer

Linkage with book-entry transfer systems for stocks, etc., and CBs, corporate bonds and CP(excluding Japanese government bonds)* In 2014, “Tolerance Matching” function will be available.

Securities
companies

Notice ofexecution

Order

Securities
companies
Notice ofexecution

Order

Stock
exchanges

Business Overview

06

Custody Services
for Foreign Stock
Certificates, etc.
Making it easier for Japanese investors
to invest in foreign companies byhandling the complicated procedures
involved in transfers, dividend
payments and taxation.
33

Share-handling service agents (trust banks)

Notice ofbeneficial
shareholders

Dividend
information

Custodian banks

Stockexchange
DVP

Shareholder notice host

Beneficial
shareholder
reportJapan Securities Clearing Corporation

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

Collateralmatching

Overseas CSDs

Notice ofbalance

Account transfer host(settlement)

Non-DVP
transferfor NETD

DVP transfer
for NETD

AMIs (Securities companies and banks)

Beneficial shareholders of foreign stock certificates, etc.

Local
custody/transfer

Communication
server with foreign
CSDs/banks

Annual Report 2013

Overview of the System Relating to Foreign Stocks

Safe and secure settlement infrastructureand services for foreign stocks

34
Annual Report 2013

In April 2006, JASDEC inaugurated services to process
deposits, transfers, and corporate actions for foreign stock
certificates, etc., listed on Japanese stock exchanges.
Although foreign stock certificates, etc., are generally
deposited with CSDs or custodians in the same countries
as the issuing companies, settlements of transactions at
Japanese stock exchanges are conducted through bookentry transfers in JASDEC.
JASDEC entrusts dividend payments to relevant
share-handling service agents. Information on beneficial
shareholders at the dividend record date is transferred tothe share-handling service organizations by the JASDEC
participants through JASDEC.
Based on this information, the share-handling service
agents calculate the amount of dividends, which arethen paid directly to the beneficial shareholders from thedividend-paying banks.

Foreign stocks, etc.—number of issues/balancein accounts (excluding foreign covered warrants)(Thousand shares)(Issues)

150,000
130,6924250
41

120,000
90,00079,53189,90538

37

40

88,93086,57730■ Balance in accounts● Number of issues

JASDEC also undertakes the necessary procedures
regarding dividend taxation for local tax authorities andother such entities, to ensure reduced tax rates undertax treaties with the countries concerned. Beneficial
shareholders can also exercise their voting rights at
general meetings of shareholders through instructions
issued to JASDEC.
JASDEC therefore provides the infrastructure andservices necessary for reliable settlement of trading
activities in foreign stock certificates, etc., smooth
exercise of shareholder rights, and error-free receipt ofdividends and other payments.

Number of sharesdeposited/withdrawn■N umber of sharesdeposited■N umber of shares
withdrawn(Thousand shares)
480,306

500,000

300,000
246,465
200,000

25
60,00020

30,000

10

115,478 118,585
100,000

131,801
71,16759,727

15,6500(FY) 2008

2009

2010

2011

2012

0

0

(FY)

2009

2010

2011

2012

06 Custody Services for Foreign Stock Certificates, etc.

Service improvements for beneficial
shareholders and participantsBook-entry
transfers■ Non-exchangetransaction deliveries■ Exchangetransaction transfers(Thousand shares)
469,524500,000

300,000

274,119

200,000

302,746
258,701

236,159

158,573

133,511

115,001

100,000

0

(FY)

2009

2010

2011

2012

shareholders are not treated disadvantageously withrespect to foreign tax and that participants are notsubject to excessive administrative workload.
In addition, JASDEC has worked to improve services
offered to beneficial shareholders and JASDEC
participants, such as considering handling products
listed in various foreign countries with prospects forlisting on Japanese stock exchanges.
At present, foreign securities under the custodyof the Depository and Book-entry Transfer System
for Foreign Stock Certificates, etc., include three
categories: foreign stocks (including ADRs), overseas
ETFs (including ETCs), and country funds. At the endof March 2013, the total number of issues handled by
JASDEC in the three categories stood at 37.

35
Annual Report 2013

With regard to the handling of issues before their listing
dates, under the previous Depository and Book-entry
Transfer System for Foreign Stock Certificates, etc.,(“the system”), only deposit and transfer are permitted
for the purpose of preparing for listing to ensuresmooth trading from the first day of listing. In fiscal
2012, however, JASDEC amended the system in orderto make all services including processing corporate
action, available from the listing approval date, so thatrights such as dividend can be processed under thesystem even if the record date (of corporate action) is
set before the listing date arrives.
Systems to prevent tax avoidance have been
introduced in a number of foreign countries in recent
years, and JASDEC is responding appropriately on thebasis of cooperation with the competent authorities
and involved organizations to ensure that beneficial

International Relationships

JASDEC engages year-round in international
activities to guide the rational development ofa global settlement infrastructure. Research on
overseas trends and information sharing are
key elements of a leadership role.

36
Annual Report 2013

JASDEC regards research on overseas trends and timely,
accurate information exchange with overseas institutions
as essential to its ongoing efforts to deal with the many
issues that affect securities market infrastructures, suchas the globalization of financial and capital markets andthe global tightening of regulations. We actively participate
in international forums such as regular CSD meetings andseminars. We also play a key role in administration for the
Asia- Pacific Central Securities Depository Group (ACG)

and the World Forum of CSDs (WFC). Through these
activities, we aim to contribute to the development of
securities market infrastructures in Japan and worldwide
while also raising the profile of JASDEC.
We are actively developing relationships withorganizations with which we have signed memorandumsof understanding (MOUs), and we provide various forms
of assistance in response to requests from CSDs of
emerging nations.

Mutual cooperation with overseas institutions
The ACG was established in November 1997 as a forum for information exchange andmutual cooperation among CSDs in the Asia-Pacific region. In December 2010, an Executive
Committee was established at the 14th general meeting to plan and organize activities frommedium- to long-term perspectives. JASDEC was elected to the Executive Committee
member as convenor of the Exchange of Information Task Force, Korea Securities
Depository as convenor of the New Business Initiative Task Force, National Securities
Depository Limited as convenor of the Technical Task Force and China Securities Depository
and Clearing Corporation Limited as convenor of the Legal Task Force. Central Depository
Company of Pakistan Limited, Singapore Exchange Limited, and Vietnam Securities
Depository were also elected through a general vote. JASDEC Chairman Takeuchi became
the first ACG Executive Committee Chairman.
JASDEC is committed to demonstrating leadership in ACG activities as Secretariat andis making efforts to further invigorate ACG.

World Forumof CSDs

The WFC was created in April 2011 at the 11th Conference of CSDs (CSD11), after
agreement was reached among leaders of the world’s five regional CSD associations. The
WFC continues the collaborative activities undertaken by regional associations under the
CSD Contact Group during the previous four years. Its function is to strengthen the influenceof CSDs and disseminate their shared views as a forum of information exchange and debate
on issues that affect all CSDs. The WFC is administered by a 10-member board made up
of chairs and vice-chairs from each regional association, and JASDEC participates as an
ACG representative. Mr. Mohamed Abdel Salam of Misr for Central Clearing, Depository& Registry (MCDR), Egypt, representing AMEDA (Africa and Middle East Depositories
Association) was elected as the Forum’s first Chair, with Chairman Takeuchi of JASDEC as
the first Vice-Chair.

MOUs on informationexchange andmutual cooperation
with overseas CSDs,
etc.

As one element of our efforts to build collaborative relationships with clearing and settlement
infrastructures around the world, JASDEC has been following a policy of signing MOUs
on the exchange of information and mutual cooperation with overseas CSDs, etc. As ofthe end of March 2013, JASDEC had signed MOUs with a total of 17 institutions. We arestrengthening our cooperative relationships with our MOU partners through active initiatives,
including regular exchanges of information, cross-training programs involving trainee
exchanges and support for CSDs of emerging nations.

ABMF (ASEAN+3 Bond
Market Forum)

The ABMI (Asian Bond Markets Initiative), under the Meeting of the Finance Ministers andCentral Bank Governors of the ASEAN+3 group, comprises four Task Forces (charged with 1:
promoting the issuance of local-currency-denominated bonds, 2: facilitating the demand for
local-currency-denominated bonds, 3: improving the regulatory framework and 4: improving
the related infrastructure of the bond markets). The ABMF (ASEAN+3 Bond Market Forum)
was established under Task Force 3 (improvement of regulatory framework), and two subforums were held. Sub-Forum 1 sought to identify regulatory barriers relating to bondtransactions in general, while Sub-Forum 2 was concerned primarily with identifying crossborder settlement operations. The results of these deliberations were compiled into a Phase 1
final report, which was published in April 2012. Also publication of a final report for Phase 2 isplanned for the end of 2013.
JASDEC has participated in the ABMF as the Japanese representative and is actively
participating in Sub-Forum 2 as the co-vice-chair.

37
Annual Report 2013

Asia-Pacific Central
Securities
Depository GroupInternational Relationships

Major International Activities in Fiscal 2012

April 24

May 29–31

MOU with CCDC of China
JASDEC signed a Memorandum of

14th ACG Cross-Training
Seminar

Understanding (MOU) with China Central

At the 14th ACG Cross-Training Seminar for

Depository & Clearing Co., Ltd. (CCDC), a

Asia-Pacific Central Securities Depository

Chinese CSD, with the aim of developing

Group (ACG) in Mumbai, India, JASDEC as

cooperative relations via information

convenor of the Exchange of Information Task

exchange and mutual cooperation.

Force assisted the host, Central Depository
Services (India) Limited (CDSL), and ran the
Exchange of Information Task Force session
and General sessions. In these sessions,
JASDEC presented on such topics as thesettlement processes and account structurein the Japanese market, application of laws
in cross-border securities transactions,approaches for the advancement of JASDEC
systems, and mitigating the risk of stock
lending settlement.

38
Annual Report 20132012.456

7

8June 4September 19

September 20–21

2nd WFC Board
Meeting

16th ACG General Meeting

As secretariat of the World

Second Trilateral Meeting for
Information Exchange with China’s
SD&C and Korea’s KSD

Forum of CSDs (WFC),

JASDEC planned and managed the second trilateral

JASDEC planned andmeeting under the MOU with SD&C (China Securities

managed its second meeting

Depository and Clearing Corporation Limited) and KSD

held in Zurich, Switzerland.

(Korea Securities Depository), held in Bali, Indonesia. The

JASDEC’s Chairman

companies exchanged information on business plans

Takeuchi served as Vice-and recent major projects, and JASDEC introduced

Chair. Attendees discussed

the enhancement of its corporate action information

issues including a project todistribution service, its handling of J-Sukuk (Islamic

study unified and efficientbonds) that utilize special purpose trust beneficiary rights

response to regulatory

and other topics.

authorities information
disclosure requests to CSD.

JASDEC served as Secretariat for the 16th
ACG General Meeting held in Bali, Indonesia,
hosted by PT Kustodian Sentral Efek
Indonesia (KSEI), an Indonesian CSD, andKliring Penjaminan Efek Indonesia (KPEI), an
Indonesian CCP. Resolutions were adopted
regarding Iran and Nepal’s CSDs becoming
ACG members and the ACG’s and WFC’scomments on CPSS-IOSCO Report on the
Recovery and Resolution of Financial Market
Infrastructures.

9

October 28–29

November 1

3rd WFC Board Meeting/Sibos 2012
The third WFC meeting was held in Osaka, Japan. JASDEC

MOU with Depozitarul
Central of Romania

served as Secretariat and was responsible for planning and

JASDEC signed a MOU withorganizing. JASDEC’s Chairman Takeuchi served as Vice-

November 14–18,
November 28–
December 2
Trainee Exchangewith KSD

Depozitarul Central (DC), Romania’s

Chair. Attendees discussed the CPSS-IOSCO Principles
for Financial Market Infrastructures and WFC’s future
management structure, etc. JASDEC also participated in Sibos
2012 in Osaka, where Chairman Takeuchi lectured on Asia-

CSD, with the aim of developing the

JASDEC and KSD held thecooperative relations via information

2nd trainee exchange programexchange and mutual cooperation.

under their MOU on informationexchange and mutual

Pacific initiatives affecting securities market infrastructures.

cooperation. Both institutions
accepted trainees, who were
mostly young employees.
The program enabled better
reciprocal understanding by
providing the trainees with ageneral overview of the activitiesof each institution and better
networking among employees.

39
11

12

2013.12

3

December 4–5

January 31

February 1

Information Exchange
Conference with VSD ofVietnam

MOU with
TAKASBANK of Turkey

MOU with MKK of Turkey

JASDEC signed MOU with ISE Settlement

Kurulusu A.S. (MKK), Turkey’s CSD, withJASDEC and Vietnam Securities Depository

and Custody Bank Inc. (TAKASBANK),

the aim of developing cooperative relations(VSD), Vietnam’s CSD, held an information

Turkey’s fund settlement bank, with thevia information exchange and mutual

exchange conference in Danang, Vietnam

aim of developing cooperative relations

cooperation.

under their MOU on information exchange

via information exchange and mutual

and mutual cooperation. At the conference,cooperation.

both institutions made presentations on theirbusiness strategies and recently introduced
services, and JASDEC explained the ETF
settlement system and ISIN numbering
procedure in the bond settlement system.

JASDEC signed MOU with Merkezi Kayit

Annual Report 201310

Analysis of Business Performance andFinancial Results
Fiscal year ended March 31, 2013 (Fiscal 2012)
In the following section, all comparisons are with the previous fiscal year unless stated otherwise.

Outline of Financial Results

40
Annual Report 2013

During the fiscal year ended March 31, 2013 (fiscal 2012), theJapanese economy showed signs of recovery into the summer,
buoyed by factors including reconstruction demand following
the Great East Japan Earthquake and the effects of government
policies. Subsequently, business conditions weakened amid a
global economic slowdown, and there was concern about thebottom falling out of the recovery. However, improvement in theexport environment, the impact of economic measures andfinancial policy, and other factors have led to expectations ofgradual recovery in business conditions.
In securities markets, the Nikkei Stock Average, whichbegan the first half in the lower ¥10,000 level, fell to around¥8,200 in early June 2012 due to concerns surrounding thesituation in Europe and fears of a decline in U.S. stock prices.
However, positive reaction to developments including risingstock prices in the U.S. and Europe on expectations of apolicy response by the European authorities caused the Nikkei
to hover at around the ¥9,000 level from July into October.
From November onward, positive reaction to the weakening
yen and other developments brought an upturn in the Nikkei,
which recovered to the ¥10,000 level in December. In January
2013, amid an upswing in U.S. and European stock prices
following avoidance of feared sharp fiscal restraint in the U.S.,
a downward trend in the yen fueled a rise in the Nikkei, whichhovered around the ¥12,500 level through the end of March,reaching the highest level in about four and a half years.
In the year ended March 31, 2013, operating revenues
decreased by ¥2,382,216 thousand, or 12.1%, year on year to¥17,316,021 thousand. Selling, general and administrative
expenses were reduced by ¥1,065,348 thousand, or 6.7%, to¥14,922,715 thousand. Operating income was ¥1,316,868
thousand, or 35.5%, lower at ¥2,393,305 thousand, while
ordinary income decreased by ¥1,360,151 thousand, or 36.8%,
to ¥2,339,510 thousand. Net income was ¥44,109 thousand, or
3.0%, higher year on year at ¥1,522,368 thousand.

beneficial rights of trust issuing beneficial certificates, such as
JDRs, a year-on-year increase of 452.01 million units.
The balance of account units for REITs was 6.99 million
higher year on year at 23.37 million, and account units forpreferred equity investments of financial institutions
established by cooperative associations were unchanged at
700,000. The total number of new registrations, book-entry
transfers, obliterations and other transactions processed was
2,550,919 above the total for the previous reporting year at
84,192,123.
Revenues from this business segment were ¥895,390
thousand, or 5.4%, lower year on year at ¥15,608,131
thousand, due in part to the lowering of fee rates. This
includes refunds of ¥3,005,793 thousand on book-entry
transfer commissions and account management fees.
Revenues after the deduction of these refunds amounted to¥12,602,337 thousand, a year-on-year decrease of¥1,973,288 thousand, or 13.5%.

Book-Entry Transfer System for Commercial Paper
The number of corporate issuers using this system decreasedby three to 494 as of March 31, 2013. Account balances roseby ¥145.8 billion to ¥13,760.3 billion. The total number ofissuance, transfer and redemption transactions increased by
4,312 year on year to 293,078. As a result, revenues from thissegment were ¥827 thousand, or 0.2%, lower year on year at¥462,845 thousand.

Financial Results(consolidated)

Book-Entry Transfer System for Stocks, etc.
In this business segment, the number of issues handled by
JASDEC as of March 31, 2013 was 3,753, a reduction of nineissues compared with the total as of March 31, 2012. Accountbalances included 404.6 billion shares, a year-on-year declineof 2.2 billion shares. The balance of bonds with share options
stood at ¥499.6 billion, which was ¥460.1 billion lower year on
year. There were 2,791.25 million account units for ETFs and■O perating revenues■O rdinary income(Millions of yen)
30,00024,163
20,97320,00019,726

19,69817,316

10,0002,617
0(FY ended) 3/2009

2,605
3/20102,673
3/20113,699
3/20122,340
3/2013

Book-Entry Transfer System for Corporate Bonds
In this business segment, JASDEC was handling a total of
58,486 issues as of March 31, 2013, a reduction of 2,215
issues compared with the position a year earlier. On a facevalue basis, the account balance increased by ¥344.8 billion
year on year to ¥252,784.0 billion as of March 31, 2013. The
total number of issuance, transfer and redemption transactions
was 30,450 higher at 532,600. As a result, revenues from thisbusiness segment increased by ¥10,633 thousand, or 0.9%,
to ¥1,211,650 thousand.

DVP Settlement Services for
Non-Exchange Transaction Deliveries (NETDs)
The number of NETD DVP settlements handled by JASDEC
during the year ended March 31, 2013 was 640,000 lower year
on year at 19.65 million. As a result of this decrease and thelowering of the NETD DVP settlement fee rate, revenues fromthis segment declined by ¥146,128 thousand, or 15.6%, to¥793,402 thousand. This includes refunds of ¥282,835
thousand on DVP settlement fees. Revenues after the
deduction of these refunds amounted to ¥510,567 thousand, a
year-on-year decrease of ¥133,045 thousand, or 20.7%.

Book-Entry Transfer System for Investment Trusts
Pre-Settlement Matching System

Financial Results(consolidated)

Revenues from this segment decreased by ¥39,042 thousand,or 1.9%, to ¥1,985,621 thousand in the year ended March 31,
2013. This includes refund of ¥663,999 thousand on JASDEC
pre-settlement matching fees, and revenues after the reductionof that amount were ¥225,042 thousand, or 14.6%, lower at¥1,321,621 thousand.

Custody Services for Foreign Stock Certificates, etc.
As of March 31, 2013, there was an account balance of 86
million foreign stock certificates, etc., excluding foreign
covered warrants, a decrease of 2 million from a year earlier.
The total number of book-entry transfers, including
foreign covered warrants, declined by 28,516 to 109,763. As aresult, revenues from this business segment were ¥51,145
thousand, or 25.2%, lower year on year at ¥152,045 thousand.

Financial Results(consolidated)(Millions of yen)

(Yen)

179,102.15 200,000
189,283.71
173,912.87
154,949.18
156,934.33
1,608
1,522
1,478
1,500
150,000
1,333
1,317
2,000

■ Net income● Net income per share■T otal assets■N et assets(Millions of yen)
75,00060,00061,61559,92557,454

61,57457,45145,0001,000

100,000

500

50,00030,0000(FY ended) 3/2009

3/20103/20113/20123/20130

18,89019,86821,13622,27523,45815,0000(FY ended) 3/2009

3/20103/20113/20123/2013

41
Annual Report 2013

As of March 31, 2013, JASDEC was handling a total of 7,112
issues in this business segment, including 4,336 publicly
offered investment trusts and 2,776 privately placed
investment trusts. The total represents an increase of 244
issues compared with the position as of March 31, 2012. On a
principal value basis, the account balance as of March 31,
2013 was ¥2,840.3 billion above the level a year earlier at¥115,347.4 billion, consisting of ¥83,359.6 billion for publicly
offered investment trusts and ¥31,987.8 billion for privately
placed investment trusts.
The number of related registrations, deletions, andtransfers in the year ended March 31, 2013 increased by423,786 year on year to 4,624,861. However, as a result of adecrease in the average account balance year on year,
revenues for this segment decreased by ¥9,501 thousand, or
0.9%, to ¥1,054,953 thousand.

Consolidated
Financial Statements

Consolidated Balance Sheets (As of March 31, 2012 and 2013)¥ (thousands)

2013

2013

¥ 7,794,677
3,163,166
171,898
47,168416,189
35,293,686
4,426(1,848)46,889,364¥ 5,433,419
3,146,777
180,864
240,051
134,935
28,935,881
30,745(6,767)38,095,907$ 57,771
33,458
1,923
2,552
1,434
307,664326(71)
405,060

Noncurrent Assets:
Property and Equipment:
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Tools and furniture
Accumulated depreciation
Tools and furniture, net
Lease assets
Accumulated depreciation
Lease assets, net
Total Property and Equipment

926,465(440,666)
485,798
5,713,609(5,105,378)
608,230
93,323(59,488)
33,834
1,127,863

957,512(498,484)
459,028
7,717,751(5,460,153)
2,257,598
93,323(82,145)
11,1772,727,803

10,180(5,300)4,880
82,060(58,055)
24,004
992
(873)
118
29,003

Intangible Assets:
Software
Software in progress
Lease assets
Other intangible assets
Total Intangible Assets

8,365,514
3,796,200
3,771
17,80812,183,294

3,632,949
11,438,204
902
17,692
15,089,748

38,627
121,6189
188
160,443

429,980
10,970407,456
503,534
30,6201,000(9,934)
1,373,627
14,684,786¥ 61,574,151

428,237
79,589519,615
503,534
32,1381,000(26,318)
1,537,797
19,355,349¥ 57,451,257

4,553
846
5,524
5,353
341
10
(279)
16,350205,798$ 610,858

ASSETS
Current Assets:
Cash and deposits
Accounts receivable—trade
Prepaid expenses
Consumption taxes receivable
Deferred tax assets
Designated assets for clearing funds (Note 1)
Other current assets
Allowance for doubtful accounts
Total Current Assets

42$ (thousands)

2012

Annual Report 2013

Investment and Other Assets:
Investment securities (Note 2)Long-term prepaid expenses
Deferred tax assets
Long-term refundable lease deposits
Claims provable in bankruptcy, rehabilitation and other
OthersAllowance for doubtful accounts
Total Investment and Other Assets
Total Noncurrent Assets
Total Assets
The accompanying notes are an integral part of these statements.

¥ (thousands)

2012
LIABILITIESCurrent Liabilities:
Accounts payable—trade
Lease obligations
Accounts payable—other
Income taxes payable
Allowance for employees’ bonuses
Allowance for executives’ bonuses
Consumption taxes payable
Deposits received for clearing funds (Note 1)
Allowance for loss on changes of system development policy
Other current liabilities
Total Current Liabilities

NET ASSETS
Shareholders’ Equity:
Common stock
Capital surplus
Retained earnings
Total Shareholders’ Equity
Total Net Assets
Total Liabilities and Net Assets

849,724
23,207
896,670
744,703
202,087
20,6002,575
35,293,686
700,592
67,48938,801,335¥

865,312
10,462
976,411
209,735
219,297
21,800—28,935,881—
83,90731,322,808

2013

$

9,200
111
10,381
2,230
2,331
231
—
307,664—892
333,044—
17,156383,304
30,000—67,121
497,582
39,298,917

2,000,000
6,693
442,447
30,000124,585
67,1212,670,846
33,993,655

21,265
71
4,704
318
1,324
713
28,398361,442

4,250,000
4,250,000
13,775,233
22,275,233
22,275,233¥ 61,574,151

4,250,000
4,250,000
14,957,602
23,457,602
23,457,602¥ 57,451,257

45,18845,188159,038
249,416
249,416$ 610,858

43
Annual Report 2013

Noncurrent Liabilities:
Long-term loans payable (Note 3)
Lease obligations
Allowance for employees’ retirement benefits
Allowance for executives’ retirement benefits
Allowance for assets removal
Long-term guarantee deposited
Total Noncurrent Liabilities
Total Liabilities¥$ (thousands)

2013Consolidated
Financial Statements

Consolidated Statements of Income and Comprehensive Income (For the years ended March 31, 2012 and 2013)¥ (thousands)

44
Annual Report 2013

Operating Revenue
Operating Expenses:
Executives’ compensations
Salaries
Allowance for employees’ bonuses
Allowance for executives’ bonuses
Retirement benefit expenses
Maintenance of systems
Depreciation and amortization
Rent
Advertising
Allowance for assets removal
OthersTotal Operating Expenses
Operating Income
Non-Operating Income:Interest income
Operational revenue on designated assets for clearing funds
Equity in earnings of an affiliate
OthersTotal Non-Operating Income
Non-Operating Expenses:
Interest expenses
Commitment fees
Commission fees
Fees for fund operation of designated assets for clearing fund
OthersTotal Non-Operating Expenses
Ordinary Income
Extraordinary Income:Reversal of allowance for loss on changes of system development policy
Total Extraordinary Income
Extraordinary Losses:
Loss on disposal of fixed assets (Note 1)
Loss on changes of system development policy (Note 2)
Total Extraordinary Losses
Income before Income Taxes and Minority Interests
Income taxes—current
Income taxes—deferred
Total Income Taxes
Income before Minority Interests
Net Income
Income before Minority Interests
Comprehensive Income(Comprehensive Income attributable to)Comprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests
The accompanying notes are an integral part of these statements.

$ (thousands)

2012¥ 19,698,237

2013¥ 17,316,021

2013$ 184,115¥¥$

194,378
1,621,253
202,087
20,600121,514
6,130,854
5,341,802
546,867
46,283—
1,762,423
15,988,063
3,710,173

196,847
1,608,082
219,297
21,800126,242
5,273,956
5,085,062
547,025
10,952
124,585
1,708,863
14,922,715
2,393,305

2,093
17,098
2,331
231
1,342
56,07654,067
5,816
116
1,324
18,169158,667
25,447

8
14,91020,151
6,323
41,393

6
11,878537
6,025
18,447

0
126
5
64
196

713
42,974—8,035
182
51,906
3,699,661

349
42,936
21,5007,443
1272,242
2,339,510

3
456
228
79
0
768
24,875——

216,433
216,433

2,301
2,301

5,763
1,067,384
1,073,148
2,626,513
1,212,473(64,219)
1,148,253
1,478,259
1,478,259
1,478,259¥ 1,478,259

62,669—62,6692,493,274
801,811
169,094970,906
1,522,368
1,522,368
1,522,368¥ 1,522,368

666
—
666
26,5108,525
1,797
10,323
16,186
16,186
16,186$ 16,186

1,478,259—

1,522,368—

16,186—

Consolidated Statements of Changes in Net Assets (For the years ended March 31, 2012 and 2013)¥ (thousands)

The accompanying notes are an integral part of these statements.

2013

2013

¥ 4,250,000——
4,250,000¥ 4,250,000——
4,250,000$ 45,188——
45,1884,250,000——
4,250,000

4,250,000——
4,250,000

45,188——45,188

12,636,974

13,775,233

146,467(340,000)
1,478,259
1,138,259
13,775,233(340,000)
1,522,368
1,182,368
14,957,602(3,615)
16,186
12,571
159,038

21,136,974

22,275,233

236,844(340,000)
1,478,259
1,138,259
22,275,233(340,000)
1,522,368
1,182,368
23,457,602(3,615)
16,186
12,571
249,416

21,136,974

22,275,233

236,844(340,000)
1,478,259
1,138,259¥ 22,275,233(340,000)
1,522,368
1,182,368¥ 23,457,602(3,615)
16,186
12,571$ 249,416

45
Annual Report 2013

Shareholders’ Equity
Common Stock:
Balance at the beginning of current period
Change of items during the period
Total change of items during the period
Balance at the beginning of current period
Capital Surplus:
Balance at the beginning of current period
Change of items during the period
Total change of items during the period
Balance at the end of current period
Retained Earnings:
Balance at the beginning of current period
Change of items during the period
Dividends from surplus
Net income
Total change of items during the period
Balance at the end of current period
Total Shareholders’ Equity:
Balance at the beginning of current period
Change of items during the period
Dividends from surplus
Net income
Total change of items during the period
Balance at the end of current period
Total Net Assets:
Balance at the beginning of current period
Change of items during the period
Dividends from surplus
Net income
Total change of items during the period
Balance at the end of current period$ (thousands)

2012Consolidated
Financial Statements

Consolidated Statements of Cash Flows (For the years ended March 31, 2012 and 2013)¥ (thousands)

46
Annual Report 2013

Cash Flows from Operating Activities:
Income before income taxes
Depreciation and amortization
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in allowance for employees’ bonuses
Increase (decrease) in allowance for executives’ bonuses
Increase (decrease) in allowance for employees’ retirement benefits
Increase (decrease) in allowance for assets removalInterest income
Interest expenses
Equity in loss (earnings) of affiliates
Foreign exchange losses (gains)
Reversal of allowance for loss on changes of system development policy
Loss on disposal of property and equipment
Loss on disposal of intangible assets
Loss on changes of system development policy
Decrease (increase) in accounts receivable—trade
Increase (decrease) in accounts payable—trade
OthersSub-totalInterest and dividends received
Interest paid
Settlement money paid
Income taxes paid
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities:
Payments for purchase of property and equipment
Payments for purchase of intangible assets
Net Cash Used in Investing Activities
Cash Flows from Financing Activities:
Proceeds from long-term loans payable
Repayment of lease obligations
Cash dividends paid
Net Cash Used in Financing Activities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year (Note 1)
The accompanying notes are an integral part of these statements.

$ (thousands)

2012

2013

2013

¥ 2,626,513
5,341,802(5,655)18,990100
71,970—(8)713(20,151)(1,254)—
4,911
852
1,067,384
280,969
79,726
6,104
9,472,968
4,308
(713)
—
(1,361,122)
8,115,440¥ 2,493,274
5,085,062
21,303
17,2101,200
59,142
124,585
(6)
349
(537)
(582)
(216,433)
12,53650,132—
14,86915,587(301,878)
7,375,817
2,286
(349)
(484,159)(1,331,530)
5,562,065(284,317)(4,191,558)(4,475,876)(2,270,330)(7,290,367)(9,560,698)(24,139)(77,515)(101,655)—(22,789)(340,000)(362,789)
1,254
3,278,029
4,516,648¥ 7,794,677

2,000,000(23,207)(340,000)
1,636,792
582(2,361,257)
7,794,677¥ 5,433,419

21,265(246)(3,615)
17,403
6(25,106)
82,878$ 57,771$

26,51054,067
226
182
12
628
1,324
0
3
(5)
(6)
(2,301)
133
533
—
158
165
(3,209)78,42424(3)(5,147)(14,157)
59,139

Notes to the Consolidated
Financial Statements

Note on Going Concern’s Premise
None.

Basis of Preparation of the Consolidated
Financial Statements
1. Basis of Presentation
The accompanying consolidated financial statements havebeen compiled from the accounts maintained by Japan
Securities Depository Center, Inc. (“the Company”) and its
subsidiary in accordance with the provisions set forth in the
Financial Instruments and Exchange Act in conformity withaccounting principles and practices generally accepted inJapan, which are different in certain respects as to theapplication and disclosure requirements of International
Financial Reporting Standards.

3. Application of the Equity Method(1)	Number of associated companies accounted for by theequity method: One(2)	Name of the associated company accounted for by theequity method: Tosho System Services Co., Ltd. (“TSS”)(3)	The Company does not have any other associatedcompanies to which the equity method is not applied.
4. Fiscal Year of the Consolidated Subsidiary
The fiscal year-end of the consolidated subsidiary is the samedate as the consolidated balance sheet date.
5. Significant Accounting Policies(1)	Depreciation and amortization of major depreciable assets
q Property and equipment (excluding lease assets)	Depreciation of property and equipment excluding leaseassets is calculated using the straight-line method.
		 The major estimated useful lives are as follows:
			 Buildings and structures: 3–50 years
			 Tools and furniture: 2–15 years
w Intangible assets (excluding lease assets)
	Amortization of intangible assets is calculated using thestraight-line method.

e Lease assets
	The straight-line method is applied to the depreciation ofassets leased under finance leases without ownershiptransfer, over their respective lease term with zero
residual value.
		 The Company accounts for finance leases withoutownership transfer as operating leases if their transactioncommenced before April 1, 2008.
(2) Provision of major allowancesq Allowance for doubtful accounts
	Allowance for doubtful accounts is provided at an amountdetermined based on the Company’s historical averagecharge-off ratio for ordinary receivables, and estimates of
uncollectible amounts determined by reference to specificdoubtful receivables from customers which areexperiencing financial difficulties.
w Allowance for employees’ bonuses	Allowance for employees’ bonuses is provided for bonuses
attributable to each fiscal year based on the estimatedamount of the respective payments.
e Allowance for executives’ bonuses	Allowance for executives’ bonuses is provided for bonuses
attributable to each fiscal year based on the estimatedamount of the respective payments.
r Allowance for employees’ retirement benefits	Allowance for employees’ retirement benefits is provided at
the amount that would be payable by the Company if alleligible employees voluntarily terminated their employment
at the balance sheet dates.
t Allowance for executives’ retirement benefits	Allowance for executives’ retirement benefits is provided at
the amount that would be payable by the Company if alleligible executives terminated their appointment at thebalance sheet dates.
		 As of June 20, 2006, the executives’ retirement benefit
scheme has been abolished. Thus the balance of allowancefor executives’ retirement benefits represents the payableamount for executives who were appointed when thescheme existed, attributable to the period from their
appointment to the date of abolishment of the scheme.

47
Annual Report 2013

2. Consolidation
The accounts of all subsidiaries are included in the
consolidated financial statements.
(1) Number of consolidated subsidiaries: One(2)	Name of the consolidated subsidiary: JASDEC DVP
Clearing Corporation (“JDCC”)

		 Costs of software for internal use are capitalized andamortized over an estimated useful life of 5 years.

Notes to the Consolidated
Financial Statementsy Allowance for assets removal
	Allowance for assets removal is provided at the amountestimated to be incurred for the anticipated assets
dismantlement.
(3)	Scope of cash and cash equivalents for the consolidated
statements of cash flows
	Cash and cash equivalents include cash on hand, deposits
at demand, and short-term investments with a maturity of
three months or less carrying insignificant risk of any
fluctuation in market value.
(4) Consumption taxes
	Consumption taxes are excluded from income or expenses.

48
Annual Report 2013

6. U.S. Dollar Amounts
The accompanying consolidated financial statements are
expressed in yen, and solely for the convenience of the reader,have been translated into U.S. dollars at the rate of ¥94.05=U.
S.$1, the approximate rate of exchange prevailing at March
31, 2013. The approximate rate of exchange prevailing at May
31, 2013 is ¥101.18=U.S.$1. This translation should not be
construed as a representation that all amounts shown could
be converted into U.S. dollars at such rate.

The effects of this accounting change on income wereimmaterial.

Accounting Standards Applicable after theConsolidated Balance Sheet Date
None.

Changes in Presentation
None.

Changes in Accounting Estimates
Revision in the estimated useful lives of property, equipment
and software
Effective for the fiscal year ended March 31, 2013, theCompany revised the estimated useful lives of the property,
equipment and software disposal of which was anticipatedupon replacement by next-generation systems.
As a result of this revision, operating income, ordinary
income, and income before income taxes and minority
interests decreased by ¥573,004 thousand ($6,092 thousand)compared with what would have been with the previous
estimate useful lives.

Accounting Changes
Change in the depreciation method applied to property andequipment (excluding lease assets)
Through the fiscal year ended March 31, 2012, the Company
and its subsidiary had applied the declining-balance method
to calculate depreciation of property and equipment (excluding
lease assets) other than buildings and structures for which thestraight-line method was used. Effective for the fiscal year
ended March 31, 2013, the straight-line method is applied to
all property and equipment.
The Company reviewed the usage status of property andequipment of the Company and its subsidiary when thenumber of system investment projects showed considerable
increase. As a result, it was proved that most of the property
and equipment would be utilized constantly and stably, andthat the maintenance and repair expenses for these assets
would be incurred also at a constant level. Accordingly, theCompany judged that the straight-line method which equalizes
the depreciation expenses allocated over a certain period
should better reflect the economic positions of the Company
and its subsidiary, thus should calculate periodical profit andloss more appropriately.

Notes to the Consolidated Balance Sheets
1. ‌Assets and Liabilities Held for Sound Settlement System
Operation and Management
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 parties
who undertake securities obligations in accordance with theprovisions set forth in JDCC’s general provisions inaccordance with Article 156-7, Paragraph 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 otherassets in accordance with JDCC’s general provisions andArticle 18 of the Cabinet Office Ordinance on Financial
Instruments Clearing Organization (Cabinet Office Ordinance
No. 76, 2002).

(2) Collateral securities	Under the DVP for NETDs settlement system, DVP
participants are able to entrust marketable securities listed
in JDCC’s general provisions (“collateral securities”) toensure that obligations 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 them in securities markets or
through other methods deemed appropriate by JDCC.
The market value of collateral securities entrusted to JDCC asof March 31, 2012 and 2013 was as follows:¥ (thousands)
As of March 31

Market valueof collateral securities
entrusted to JDCC

2012

2013

¥ 91,472,213 ¥ 92,917,708

2. Accounts Relating to the Associated Company
Accounts and their amounts relating to the associatedcompany were as follows:¥ (thousands)

Investment securities(equity securities)

2013

2013

¥ 429,980¥ 428,237$ 4,553

3. Overdraft Contracts and Commitment Line Agreements
To ensure agile and stable fundraising, the Company has
concluded overdraft contracts with four banks. In addition, forthe purpose of capital investment regarding development of
next-generation systems, the Company has concluded
commitment line agreements with four banks.
To prepare for a possible deficiency of funds due to adefault by DVP participants, JDCC has concluded
commitment line agreements with three banks, as part of aliquid fund for completing fund settlement on the required day.
The unused balances of these overdraft contracts andcommitment line agreements were summarized as follows:(1) Overdraft contracts¥ (thousands)

Aggregate maximum
amount of overdraft
amounts

2013

2013

¥ 7,000,000¥ 7,000,000$ 74,428

Amount used
Unused balance$ 987,960$ (thousands)

2012

As of March 31

—

—

—

¥ 7,000,000¥ 7,000,000$ 74,428(2) Commitment line agreements
q The Company¥ (thousands)$ (thousands)

2012

2013

2013

Aggregate amountof credit limit*—¥ 3,500,000$ 37,214

Amount used—

2,000,000

21,265

Unused balance—¥ 1,500,000$ 15,948

As of March 31

* The
‌
aggregate amount of credit limit for each respective period is summarized
as follows.

$ (thousands)

2013$ (thousands)

2012

As of March 31¥ (thousands)
Period$ (thousands)

Aggregate amount of credit limit

March 21, 2013–March 31, 2013

¥ 3,500,000$ 37,214

April 1, 2013–May 31, 2013

¥ 5,000,000$ 53,163

June 1, 2013–July 31, 2013

¥ 5,500,000$ 58,479

August 1, 2013–February 28, 2014

¥ 10,000,000$ 106,326

March 1, 2014–March 20, 2014

¥ 13,500,000$ 143,540

49
Annual Report 2013(1)	Participant fund specified assets and participant funds
under management
	Under the DVP for 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 aparticipant 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 of minimum participant funds required by JDCC’s
general provisions as of March 31, 2013 was ¥15,000,000
thousand ($159,489 thousand)). In the event a DVP
participant defaults on the required payment obligations of
the DVP for the NETDs settlement system, JDCC shall takedeposits from the participant fund of this DVP participant
to fulfill its obligations to other DVP participants.
		 The participant funds entrusted to JDCC will be
managed as money trusts, in line with the stated generalprovisions of JDCC.
		 These money trusts are evaluated at cost, as availablefor-sale securities with no market value.
		 Assets and liabilities pertaining to participant funds arepresented as Designated assets for clearing assets andDeposits received for clearing funds, respectively.

Notes to the Consolidated
Financial Statements

Notes to the Consolidated Statements ofIncome and Comprehensive Income

w JDCC¥ (thousands)

2012

As of March 31

Aggregate amountof commitment line
agreements

2013

2013

¥ 45,000,000 ¥ 45,000,000

Amount used—

Unused balance$ (thousands)$ 478,468—¥ 45,000,000 ¥ 45,000,000

1. Loss on Disposal of Noncurrent Assets
The following table shows details of loss on disposal of
noncurrent assets:¥ (thousands)—
For the years ended March 31$ 478,468

Buildings and structures$ (thousands)

2012

2013

2013

¥

¥

$

Tools and furniture

894

784

8

4,016

11,752

124

Software852

36,652389

Construction inprogress (software)—

13,480143¥ 5,763¥ 62,669

$ 666

Total

2. Loss on Changes in System Development Policies
Loss on changes in system development policies wasrecorded in the year ended March 31, 2012, the amount of
which represented the loss incurred due to changes in thedevelopment policies of the next-generation system that was
being developed.

50
Annual Report 2013

Notes to the Consolidated Statements of Changes in Net Assets
For the year ended March 31, 2012
1. Outstanding SharesClass of share

Ordinary shares

April 1, 2011

Increase

Decrease

March 31, 2012

8,500

—

—

8,500

Class ofshare

Total amount¥ (thousands)

Dividend
per share ¥Record date

Effective dateOrdinaryshares¥ 340,000¥ 40,000March 31, 2011

June 21, 2011

2. Treasury Stock
None.
3. Stock Subscription Rights and Other Securities
None.
4. Dividends(1) Payment of the dividends
Resolution

Ordinary General
Shareholders Meeting (June 20, 2011)(2)	Dividends for which the record date is in the year ended March 31, 2012 and for which the effective date is in the year ended
March 31, 2013
Resolution

Ordinary General
Shareholders Meeting (June 18, 2012)

Class ofshare

Payment source

Total amount¥ (thousands)

Dividend
per share ¥Record date

Effective dateOrdinarysharesRetainedearnings¥ 340,000¥ 40,000March 31, 2012

June 19, 2012

For the year ended March 31, 2013
1. Outstanding SharesClass of share

Ordinary shares

April 1, 2012

Increase

Decrease

March 31, 2013

8,500

—

—

8,500

2. Treasury Stock
None.
3. Stock Subscription Rights and Other Securities
None.
4. Dividends(1) Payment of the dividends
Resolution

Ordinary General
Shareholders Meeting (June 18, 2012)

Class ofshare

Total amount¥ (thousands)

Dividend
per share ¥Record date

Effective dateOrdinaryshares¥ 340,000($ 3,615 thousand)¥ 40,000($ 425)

March 31, 2012

June 19, 2012(2)	Dividends for which the record date is in the year ended March 31, 2013 and for which the effective date is in the year ending
March 31, 2014
Resolution

Payment source

Total amount¥ (thousands)

Dividend
per share ¥Record date

Effective dateOrdinarysharesRetainedearnings¥ 340,000($ 3,615 thousand)¥ 40,000($ 425)

March 31, 2013

June 18, 2013

Notes to the Consolidated Statementsof Cash Flows

Lease Transactions

1. ‌The Balance of Cash and Cash Equivalents and Its
Reconciliation to the Balance of Cash and Deposits in theConsolidated Balance Sheets¥ (thousands)$ (thousands)

2012

2013

2013

Cash and deposits¥ 7,794,677¥ 5,433,419$ 57,771

Cash andcash equivalents

7,794,677

5,433,419

57,771

As of March 31

1. Finance Lease Transactions
Finance lease transactions that do not transfer the ownershipof the leased assets to the lesseeq Leased assetsa)	Property and equipment: Mainly backup system
hardwareb) Intangible assets: Mainly backup system software
w Depreciation method
	As described in Basis of Preparation of the Consolidated
Financial Statements, 5. Significant Accounting Policies, (1)Depreciation and amortization of major depreciable assets.
Finance lease transactions other than those in which theownership of the leased assets is transferred to the lessee thatcommenced before April 1, 2008 continue to be accounted for
as operating lease transactions. The followings are theamounts which would have been recorded as finance leases
as of March 31, 2012 and 2013 and for the years then ended:

Annual Report 2013

Ordinary General
Shareholders Meeting (June 17, 2013)

Class ofshare

51

Notes to the Consolidated
Financial Statements(1)	Acquisition cost, accumulated depreciation andnet book value¥ (thousands)$ (thousands)

2012

2013

2013

¥ 1,882,666¥—$—

As of March 31

2. Operating Lease Transactions
Minimum lease payment on the operating lease transactions
that are not cancellable
None.

Tools and furniture:
Acquisition cost
Accumulated
depreciation(1,688,262)

—

—

¥

194,403¥—$—¥

216,774¥—$—(195,094)——

21,679¥—$—Acquisition cost

¥ 2,099,440¥—$—

Accumulated
depreciation(1,883,356)——

216,083¥—$—

Net book value

Financial Instruments
1. General Information on Financial Instruments(1) Basic policies for financial instruments
	The Company limits financial investment to short-term
deposits, and fundraising to borrowings from banks
and others.

Software:Acquisition cost
Accumulated
depreciation
Net book value¥

Total:Net book value

52¥(2) Minimum lease payment including interest thereon¥ (thousands)$ (thousands)

2012

2013

2013

Due within one year

¥ 218,847¥—$—

Due over one year

—

—

—

¥ 218,847¥—$—

As of March 31

Annual Report 2013

Total(3)	Finance lease charges, depreciation expenses andinterest portions¥ (thousands)$ (thousands)

For the years ended March 31

2012

2013

2013

Finance lease charges¥ 426,663¥ 219,193$ 2,330

Depreciation expenses

419,887

216,083

2,297

2,713

346

3

Interest portions(4)	Methods applied in calculating depreciation expenses andinterest portions
	Methods applied in calculating depreciation expenses:
Straight-line method with zero residual value over the lease
contract period		 Methods applied in calculating interest portions:
Computed as the difference between the lease obligations
and the acquisition cost equivalents, allocated over therespective lease term based on the interest rate method.
Loss on impairment of leased assets
There was no impairment loss allocated to leased assets forthe years ended March 31, 2012 and 2013.

(2)	Details and risks of financial instruments and the risk
control system	Accounts receivable—trade are subject to credit risks ofparticipants in the book-entry transfer system. The
Company continuously monitors the financial conditions of
the participants.
		 Designated assets and deposits received for clearing
funds are assets and liabilities that are held to secure the
DVP for NETDs settlement system.
		 Most of the accounts payable—trade are due within
3 months.
		 Long-term borrowings aim mainly at capital investment
regarding development of next-generation systems, andmature on or before March 31, 2018. As they carry variableinterest rates, they are subject to interest volatility risk.
2. Estimated Fair Value of Financial Instruments
The following table presents carrying amount on the
consolidated balance sheet, fair value, and difference between
carrying amount and fair value as of March 31, 2012 and 2013.
It does not, however, include those for financial instruments
for which the fair value is extremely difficult to estimate (seeNote 2).

As of March 31, 2012
¥ (thousands)
Carrying amount on
the balance sheet(1) Cash and deposits¥(5) Deposits received for clearing funds
Liabilities total

Difference—

3,161,320

3,161,320—

35,293,686

35,293,686—¥ 46,249,684¥ 46,249,684

—

¥

¥

—

(1,845)(3) Designated assets for clearing funds(4) Accounts payable—trade¥

3,163,166

Allowance for doubtful accounts*

Assets total

Fair value

7,794,677(2) Accounts receivable—trade

7,794,677(849,724)(849,724)(35,293,686)(35,293,686)—¥ (36,143,410)¥ (36,143,410)—* Allowance for doubtful accounts is deducted from Accounts receivable—trade.

As of March 31, 2013
¥ (thousands)$ (thousands)¥ (thousands)

Carrying amount on the balance sheet(1) Cash and deposits¥(2) Accounts receivable—trade

5,433,419
3,146,777

Allowance for doubtful accounts*(3) Designated assets for clearing funds(4) Accounts payable—trade

57,771¥

5,433,419

Difference$

57,771—

33,386—33,458(6,762)(71)

3,140,015

33,38653
3,140,015

28,935,881

307,664

28,935,881

307,664—¥ 37,509,316$ 398,823¥ 37,509,316$ 398,823

—

¥

$

¥

$

(9,200)—(5) Deposits received for clearing funds(28,935,881)(865,312)(307,664)(9,200)(28,935,881)(865,312)(307,664)—(6) Long-term loans payable(2,000,000)(21,265)(2,000,000)(21,265)

Liabilities total¥ (31,801,193)$ (338,130)¥ (31,801,193)$ (338,130)—* Allowance for doubtful accounts is deducted from Accounts receivable—trade.

Notes:
1. Calculation methods for fair value of financial instruments(1)	Cash and deposits, (2) Accounts receivable—trade, and (4)Accounts payable—trade:	The book value was deemed to be fair value for these items
since the book value approximates fair value because of
the short settlement period.
(3)	Designated assets for clearing funds, and (5) Deposits
received for clearing funds:
	The book value was deemed to be fair value since these
items represent assets and liabilities reflecting their roles inmaintaining a stable securities trading environment for the
DVP for NETDs settlement system.
(6) Long-term loans payable:
	The book value was deemed to be fair value since they
carry contracted variable interest rates which reflect market
interest rates, thus the book value approximates fair value.

2. ‌Financial instruments the fair value of which is extremely
difficult to estimate(As of March 31)
Category

Affiliated companies’ stocks¥ (thousands)$ (thousands)

2012

2013

2013

¥ 429,980¥ 428,237$ 4,553

These financial instruments are excluded from the above tablebecause their market quotes are not available thus their fairvalue is deemed to be extremely difficult to estimate.
3. ‌Estimated redemptions for monetary claims and securities
with maturities after the consolidated balance sheet date
All deposits and accounts receivable—trade in the above table
have settlement dates within one year.
4. ‌Maturity analysis for long-term borrowings and leaseobligations as of March 31, 2013
Please refer to “Details of Borrowings” in the Consolidated
Supplementary Schedules.

Annual Report 2013

Assets total$$ (thousands)

Fair valueNotes to the Consolidated
Financial Statements

Securities

Income Taxes

None.

1. Breakdown of Deferred Tax Assets¥ (thousands)

Derivative Transactions
The Company and its consolidated subsidiary did not engage
in derivative transactions.

Employees’ Retirement Benefits
1. Outline of Retirement Benefit Schemes Adopted
The Company and its subsidiary adopt a lump-sum retirement
allowance scheme and a defined contribution pension plan.

2013(As of March 31)

Accrued business tax¥ 56,458¥ 23,356

Allowance for
employees’ bonuses

76,813

83,354

886

Business facility taxes

3,961

4,056

43

Accrued social
insurance premiums

10,513

11,614123

Allowance for loss
on changes in systemdevelopment policies

266,295——

54¥ (thousands)$ (thousands)

2012

2013

2013

¥ 383,304¥ 442,447$ 4,704

Allowance for employee’s
retirement benefits¥ 383,304¥ 442,447$ 4,704

Annual Report 2013

3. Net Periodic Benefit Costs
Years ended March 31
Category

Service cost
Other*Net periodic benefit costs¥ (thousands)$ (thousands)

2012

2013

2013

¥ 74,157¥ 77,839

47,356

48,403514¥ 121,514¥ 126,242$ 1,342$827* ‌“Other” represents the amount of contribution to the defined contribution
pension plan.

4. Actuarial Assumptions
Not applicable.

Stock Options
Not applicable.

$

248

2,146

12,553133¥ 416,189¥ 134,935$ 1,434

Allowance for
employees’
retirement benefits

136,609

157,688

1,676

Allowance for executives’retirement benefits

10,692

10,692

113

Excess depreciationof noncurrent assets

257,231

293,455

3,120

Excess amortizationof deferred charges
for tax purposes

9,839

7,502

79

—

47,354503

Subtotal

Retirement benefit
obligation

Category

2013

Deferred tax assets—
current:

Other

2. Retirement Benefit Obligation$ (thousands)

2012

As of March 31

Deferred tax assets—
noncurrent:

Allowance forassets removal
Other

3,776

13,614

144(10,692)(10,692)(113)

Subtotal¥ 407,456¥ 519,615$ 5,524

Total deferred
tax assets¥ 823,645¥ 654,551$ 6,959

Valuation allowance

2. ‌Reconciliation between the nominal statutory income tax
rate and the effective income taxes rate
The effective tax rates for the years ended March 31, 2012 and2013 differ from the Company’s statutory tax rates for thefollowing reasons:
For the years ended March 31

2012

2013

Statutory tax rate

40.7%

38.0%

0.6

0.6

Inhabitants’ per capita taxes

0.2

0.2

Other

(0.3)

0.1

Reduction of deferred tax assets
due to changes in statutory tax rate

2.5

—

43.7%

38.9%

(Reconciliation)
Entertainment expenses andother items not deductible permanently

Effective tax rates

Business Combinations

For the year ended March 31, 2013
1. Information by Product or Service
The Company omitted information by product or service
because operating revenues from external customers in one
business product or service exceeded 90% of total operating
revenues recorded in consolidated statements of income andcomprehensive income.

None.

Asset Retirement Obligations
None.

2. Information on Geographic Areas(1) Operating revenues	Disclosure is omitted because the Company had no
operating revenues from external customers in overseas.

Investment and Rental Property
None.

Segment Information
Segment Information
The Company and its subsidiary have one business segmentof Book-entry Transfer of Securities, therefore omitted thesegment information.

2. Information on Geographic Areas(1) Operating revenues	Disclosure is omitted because the Company had no
operating revenues from external customers in overseas.
(2) Property and equipment
	Disclosure is omitted because the Company had noproperty and equipment in overseas.
3. Information by Major Customers
Name of the customers

Operating revenues¥ (thousands)

Related segment

Japan Securities
Clearing Corporation¥2,163,412

Book-entry Transfer
of Securities

3. Information by Major Customers
Name of thecustomers

Operating revenues¥ (thousands) $ (thousands)

Japan Securities¥ 1,755,569
Clearing Corporation$ 18,666

Related segment

Book-entry Transfer
of Securities

Disclosure of Information on Impairment Loss on Noncurrent
Assets by Reportable Segment
None.
Disclosure of Information on Amortization and Year-end
Balance of Goodwill by Reportable Segment
None.
Disclosure of Information on Gain on Negative Goodwill by
Reportable Segment
None.

55
Annual Report 2013

Related Information
For the year ended March 31, 2012
1. Information by Product or Service
The Company omitted information by product or service
because operating revenues from external customers in one
business product or service exceeded 90% of total operating
revenues recorded in consolidated statements of income andcomprehensive income.

(2) Property and equipment
	Disclosure is omitted because the Company had noproperty and equipment in overseas.

Notes to the Consolidated
Financial Statements

Related Party Information
1. Transactions with Related Parties(1) Transactions between the Company and the related partiesa) Unconsolidated subsidiaries and associated companies
For the year ended March 31, 2012Type

Names ofcompanies

Address

Tosho
Associated System Chuo-ku,
company Service
Tokyo
Co. Ltd.

Capital¥ (thousands)

Percentage ofvoting rightowning/owned

Principal
business

Design and¥100,000 developmentof software

20%
owningdirectly

BusinessrelationshipTransactions

Amount¥ (thousands)

Descriptions

Payment ofcomputer
Accounts
Purchasing¥ 1,777,388
payable—trade
software and maintenancefeesystemmaintenance Purchase of
Account¥ 1,376,281
softwarepayable—other

Balance at
end of period¥ (thousands)¥ 145,541¥ 170,247

For the year ended March 31, 2013Type

Names ofcompanies

Address

Capital¥ (thousands)

Percentage ofvoting rightowning/owned

Principal
business

Businessrelationship

56
Annual Report 2013

Tosho
¥100,000 Design and
Associated System Chuo-ku,($1,063 development
company Service
Tokyo
thousand) of software
Co. Ltd.

20%
owningdirectly

Transactions

Amount¥ (thousands)

Descriptions

Balance at
end of period¥ (thousands)

Payment of¥1,600,293
computer
Accounts($17,015
maintenancepayable—trade
thousand)fee¥154,676($1,644thousand)¥1,144,764
Accounts($12,171
payable—otherthousand)¥101,150($1,075
thousand)Purchasing
software and Purchase of
systemsoftwaremaintenance
Payment ofsettlementmoney (*3)¥484,159($5,147thousand)——

Notes:
1. The transaction amounts above exclude consumption taxes, while end balances include consumption taxes.
2. The terms and conditions of the above transactions are on an arm’s-length basis.
3. Settlement money was paid upon settlement of arbitration.

b) ‌Corporations that share the same parent company with the Company, subsidiaries of other affiliated companies of theCompany, and others
For the year ended March 31, 2012Type

Names ofcompanies

Address

Capital¥ (thousands)

Principal
business

SubsidiaryJapanof other
Securities Chuo-ku,
Clearing¥4,850,000
affiliatedClearingTokyo
securities
companies Corporation

Percentage ofvoting rightowning/owned—

BusinessrelationshipTransactions

Amount¥ (thousands)

Descriptions

Balance at
end of period¥ (thousands)

Commission Commission
Accounts¥2,163,412
incomeincomereceivable—trade¥255,871

Businessrelationship

Balance at
end of period¥ (thousands)

For the year ended March 31, 2013Type

Names ofcompanies

Address

Capital¥ (thousands)

Principal
business

SubsidiaryJapan¥7,350,000
of other
Securities Chuo-ku,
Clearing($78,149
affiliatedClearingTokyo
securities
thousand)companies Corporation

Percentage ofownership withvoting right—Transactions

Commission Commission
incomeincomeNotes:
1. The transaction amounts above exclude consumption taxes, while end balances include consumption taxes.
2. The terms and conditions of the above transactions are on an arm’s-length basis.

Amount¥ (thousands)

Descriptions¥1,755,569¥249,107
Accounts($18,666($2,648
receivable—trade
thousand)thousand)c) Executives, major shareholders and others of the Company (individuals only)
For the year ended March 31, 2012
None.
For the year ended March 31, 2013Type

Names ofcompanies

Address

Capital¥ (thousands)

Principal
business

Percentage ofvoting rightowning/owned

Businessrelationship

The Bank¥1,711,958,104
of Tokyo- Chuo-ku,($18,202,638 Banking
Mitsubishi Tokyo
thousand)UFJ, Ltd.

Commission
5% owned income anddirectly
borrowingof funds

Banking

Commission
5% owned income anddirectly
borrowingof funds

Corporation
where
executivesof theCompany holdrepresentative Mitsubishi¥324,279,038
posts
UFJ Trust Chuo-ku,($3,447,942
and Banking Tokyo
thousand)Corporation

Transactions

Amount¥ (thousands)

Descriptions

Balance at
end of period¥ (thousands)

Borrowingof funds¥600,000($6,379
thousand)Long-termloans payable¥600,000($6,379
thousand)

Payment
of interest¥15($0
thousand)——Borrowingof funds¥300,000($3,189
thousand)Long-termloans payable¥300,000($3,189
thousand)

Payment
of interest¥7($0
thousand)——Note: The terms and conditions of the above transactions are on an arm’s-length basis.

57
Annual Report 2013

(2) Transactions between consolidated subsidiary of the Company and the related parties
None.
2. Notes on the Parent Company and Important Affiliated Companies
None.

Special Purpose Entities Subject to Disclosure
None.

Per Share Information
¥

$

2012

2013

2013

Net assets per share¥ 2,620,615.75¥ 2,759,717.91$ 29,343.09

Net income per share¥¥$ 1,904.32

As of/for years ended March 31

173,912.87

179,102.15

Notes:
1. Diluted net income per share is not presented because no shares with potential dilutive effect were outstanding.
2. The basis for calculating net assets per share as of March 31, 2012 and 2013 is as follows:¥ (thousands)
As of March 31

Total net assets as reported in the consolidated balance sheets
Amount to be deducted from total net assets
Net assets pertaining to common stock shareholders
Number of common stock shares outstanding as of the consolidatedbalance sheet dates used to calculate net assets per share (in shares)$ (thousands)

2012

2013

2013

¥ 22,275,233¥ 23,457,602$ 249,416———¥ 22,275,233¥ 23,457,602$ 249,416

8,500

8,500

—

Notes to the Consolidated
Financial Statements

3. T he basis for calculating net income per share for the years ended March 31, 2011 and 2012 is as follows:¥ (thousands)
For years ended March 31

Net income as reported in the consolidated statements of income

2013

2013

¥ 1,478,259¥ 1,522,368$ 16,186

Net income not pertaining to common stock shareholders
Net income pertaining to common stock shareholders
Weighted-average number of common stock
shares outstanding during the period (in shares)$ (thousands)

2012
—

—

—

¥ 1,478,259¥ 1,522,368$ 16,186

8,500

8,500

—

Subsequent Events
None.

[Consolidated Supplementary Schedules]
Details of Bonds
None.

58
Annual Report 2013

Details of Borrowings¥ (thousands)
Category

Short-term borrowings
Long-term loans payable due within one year
Lease obligations due within one year
Long-term loans payable due over one year
Lease obligations due over one year
Other interest-bearing debts
Total$ (thousands)¥ (thousands)$ (thousands)

Balance as of April 1, 2012

Balance as of March 31, 2013

¥

¥

—

$ —

—

—

23,207—$

Averageinterest rate (%)

Maturity

—

—

—

—

—

—

—

246

10,462

111

0.4%

—

—

—

2,000,000

21,265

1.1%

April 3, 201717,156

182

6,693

71

0.4%

April 1, 2013 – July 31, 2015

—

—

—

—

—

—

¥ 40,363$ 429¥ 2,017,156$ 21,447——

Notes:
1. Average interest rate above represents the weighted-average of the interest rates applicable to the balances as of March 31, 2013.
2. Aggregate‌annual maturities of long-term loans payable and lease obligations due over one year for five years subsequent toMarch 31, 2013 are as follows:
Due
Category

Long-term loans payable
Lease obligations

April 1, 2014–
March 31, 2015

April 1, 2016–
March 31, 2017

April 1, 2017–
March 31, 2018

¥ (thousands)

—

—

—

¥ 2,000,000$ (thousands)

—

—

—

$ 21,265¥ (thousands)¥ 10,462¥ 5,880¥ 812—$ (thousands)

$ 111

$ 62

$8

—

Details of Asset Retirement Obligations
None.

April 1, 2015–
March 31, 2016

Independent
Auditor’s Report59
Annual Report 2013

History

1984

Relevant
Legislation

60

Organization of
JASDEC and
its Subsidiary

1985

1991

1992

2000

2001

2002

May 15thJune 27th

Law Concerning Central Securities
Depository and Book-Entry Transfer ofStock Certificates and Other Securities(CSD Law) was promulgated (effective
on November 14th)

The Law for Partial Amendments to the Law Concerning Central Securities
Depository and Book-Entry Transfer of Stock Certificates and Other
Securities as well as the Act on Transfer of Short-term Bonds, etc. were
promulgated (fully effective on April 1st, 2002)

June 12th
The Act on Improvements, etc., of the Laws Related to the Improvements of the Securities Market
through a Reform of the Securities Settlement System, etc. was promulgated (the Act on Transfer
of Short-term Bonds, etc. was amended to the Act on Transfer of Bonds, etc. The Securities andExchange Act was amended upon the establishment of the clearing organization system)

Dec. 6th

May 27th

Nov. 2nd

Japan Securities
Depository
Center (JASDEC),was established
as a foundation

JASDEC was designatedas the depositoryorganization under the
CSD Law

Detailed plan forJapan Securities
conversion of
Depository Center,
JASDEC to aInc. was establishedjoint-stock company
was announced

Jan. 4th

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

Annual Report 2013

Sept. 10th

Operation of
the System

Social contribution
JASDEC operates a Social
Contribution Selection Committee
to select the company’s CSR
activities, and has provided support
in the following areas.

Pre-Settlement Matching System (PSMS)
started

Oct. 9th

Oct. 9th

Nov. 26th

Depository and bookentry transfer businessstarted (initially for 50
listed stocks on the TSE)

Full-scale depository andbook-entry transfer
business started

Handling of convertible bonds started

Oct. 9th

May 8th

May 1stComputer system fordepository and book-entry
transfer began operation

New depository andbook-entry transfer
system launched

JASDEC launched proprietarysystem for DVP settlement of
exchange trades

Environmental protection

Social welfare

JASDEC supported “Suigen Shinrin
Tsukuri,” a movement operated by
Kanagawa Prefecture to maintain thehealth and vitality of forestry aroundour water catchment areas.

JASDEC contributed to the Japan
Guide Dog Association, supporting its
aim of reducing the waiting time forpeople who require a guide dog fromseveral years to within one year.

2003

2004

2005

2006

2007

2008

2009

2010

June 9th

Jan. 5th

The Law for Partial Amendments to the Act on
Transfer of Bonds, etc. for the Purpose of
Streamlining the Settlement for Trades ofStocks and Other Securities (Securities Trade
Settlement Streamlining Law) was
promulgated

The Securities Trade Settlement
Streamlining Law was enacted (the Act on
Transfer of Bonds, etc. was amended to the
Act on Transfer of Bonds, Shares, etc.), andthe Law Concerning Central Securities
Depository and Book-Entry Transfer ofStock Certificates and Other Securities wasabolished2012

Jan. 10th
JASDEC received official designation
as Book-entry Transfer Institution
under the stipulations of the Act on
Transfer of Bonds, etc.

June 6th

April 6th

JASDEC DVP
Clearing
Corporation (JDCC)
was establishedJDCC obtained a license for securities
obligation assumption business to act
as a clearing organization in line with
the Securities and Exchange Act

61

Jan. 10th

JASDEC inaugurated Short-Term Corporate Bonds(Commercial Paper) Book-entry Transfer System

JASDEC inaugurated Book-entry Transfer
System for Corporate Bonds

May 17th

Jan. 4th

DVP settlement system for Non-Exchange
Transaction Deliveries (NETDs) started

JASDEC inaugurated
Book-entry Transfer System
for Investment Trusts

Feb. 14th

Annual Report 2013

March 31st

JGB repo and gensaki (transactions
with repurchase agreement) wereadded to the list of targets of PSMS

May 1stJan. 4th

Jan. 5th

July 1st

JASDEC inaugurated
Custody Services for
Foreign Stocks

JASDEC
inaugurated
Book-entry Transfer
System for
Investment Trusts
listed on the stock
exchanges, i.e. for
Exchange-Traded
Funds (ETFs).

JASDEC inaugurated
Book-entry Transfer
System for Stocks,
etc.

JASDEC inaugurated
Japanese Depository
Receipts in Bookentry Transfer System
for Stocks, etc.

Jan. 4th
JASDEC launched Securities
Information Tracing System(SITRAS) for lost stocks

Jan. 4th
Operations of SITRAS
were terminatedMedical careInternational cooperation

Charity events

JASDEC contributes to the Children’s
Cancer Association of Japan, an
organization that supports children
with cancer, provides grants for childcancer research, and conducts
educational campaigns.

JASDEC provided support to
Médecins Sans Frontières Japan, an
organization that primarily provides
emergency medical care to people indistress.

JASDEC participated in the FIT
Charity Run, an event which
contributes to society by bringing
together financial service companies
to donate to worthy organizations
that, due to lack of public awarenessor other reasons, have insufficientfunding.

Corporate Data
(As of March 31, 2013)

Profile of the company

62

Corporate NameJapan Securities Depository Center, Incorporated

Registered Office Address

1-1 Nihombashi-Kayaba-cho, 2-chome, Chuo-ku, Tokyo, Japan

Established

January 4, 2002

Representative

President and CEO Haruhiko Kato

Major Businesses(1) Book-entry transfer for stocks, etc.
(2) Book-entry transfer for commercial paper(3) Book-entry transfer for corporate bonds(4) Book-entry transfer for investment trusts(5) DVP settlement services for NETDs(6) Pre-settlement matching system(7) Custody services for foreign stocks, etc.
(8) Other businesses

Operational Office

Tokyo

Consolidated Subsidiary

JASDEC DVP Clearing Corporation (Chuo-ku, Tokyo)

Number of Employees

223

Annual Report 2013

Board Members and Audit & Supervisory Board Members (As of July 1, 2013)
Chairman

Yoshinobu Takeuchi
President & CEO

Haruhiko KatoManaging Director

Seikichi Ihara
Managing Director

Yoshinori Seyama
Managing Director

Munetaka Saito
DirectorMoriyuki Iwanaga
Senior Executive Officer,
Tokyo Stock Exchange, Inc.

Director

Akira Uchida
Senior Vice President (Member of the Board)
Toray Industries, Inc.

Director

Junichi Okamoto
Deputy President,
Mitsubishi UFJ Trust and Banking Corporation

Director

Director

Masakazu Kubota

Masayuki Hoshi

Senior Managing Director,
KEIDANREN (Japan Business Federation)

Managing Executive Officer,
Mizuho Bank, Ltd.

Director

Masahiko Koyanagi
Executive Director,
Japan Securities Dealers Association

Director

Yasushi Tachihara
Executive Officer,
SMBC Nikko Securities Inc.

Director

Ayumi Tomoda
Operations Head,
Citigroup Global Markets Japan Inc.

Director

Noriaki Nagai
Senior Corporate Managing Director,
Nomura Securities Co.,Ltd.

Director

Masahisa Nakagawa
Executive Managing Director,
Daiwa Securities Co. Ltd.

Director

Kunihisa Hama
LawyerDirector

Shigeyuki Maeda
LawyerDirector

Satoshi Murabayashi
Managing Director,
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Director

Nobumitsu Watanabe
Managing Executive Officer,
Mizuho Trust & Banking Co., Ltd.

Standing Audit & Supervisory Board Member

Mamoru Kamio
Audit & Supervisory Board Member

Jun Ohta
Managing Director,
Sumitomo Mitsui Banking Corporation

Audit & Supervisory Board Member

Satoshi Matsui
Senior Executive Officer,
Tokai Tokyo Securities Co., Ltd.

Shares
Total shares approved for issue

10,000Total issued shares

8,500

Paid-in capital¥4,250,000,000

Shareholders

133

Japan Exchange Group, Inc.

2,072

24.37

Japan Securities Dealers Association

1,066

12.54

Nomura Holdings, Inc.

485

5.70

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

425

5.00

Mizuho Corporate Bank, Ltd.

425

5.00

Mitsubishi UFJ Trust andBanking Corporation

424

4.98

Daiwa Securities Co. Ltd.

360

4.23

Trust & Custody Services Bank, Ltd.

340

4.00

Citigroup Global Markets Japan Inc.

321

3.77

Japan Trustee Services Bank, Ltd.

320

3.76

Organization structure
Meeting of
Shareholders

Board ofDirectors

President &CEO

Audit & Supervisory Board
Audit & Supervisory Board
Member’s OfficeContents

Number of
Stake inshares held Company (%)

Compliance Office
General Administration Department
Corporate Planning Department
Equity Department

02

04

06

Business
Backdrop

Our
roles

Our
Direction

08

12

14

15

36

International Department

Management
Message

Corporate
GovernanceBusiness
Continuity
Plan of JASDEC

Business
Overview

International
Relationships

Post–trade Services Department

Shareholders Notification Office
Fixed Income and Investment Trust Department

Information Services Department

40

42

59

60

62

Analysis ofBusiness
Performanceand Financial
Results

Consolidated
Financial
Statements

Independent
Auditor’s
ReportHistory

Corporate
Data

First Systems Department
Second Systems Department

63
Annual Report 2013

Helping to smooththe operation ofJapan’s capital
markets

Major shareholders

Annual Report
2013

Annual Report 2013

Daini-Shoken Kaikan Bldg, 1-1, Nihombashi-Kayaba-cho 2-chome, Chuo-ku, Tokyo 103-0025, JAPANTEL +81-3-3661-0139 http://www.jasdec.com/en/