Business Overview

01

Book-Entry Transfer
System for Stocks, etc.

Total dematerialization began on January 1, 2009
Under the new dematerialized Book-entry Transfer System for
Stocks, etc., stock certificates issued by all Japanese companies
listed on Japanese stock exchanges were abolished and became
invalid. They have been replaced by electronic records registeredand managed by computer systems within accounts opened at
JASDEC or account management institutions (AMIs) such as
securities companies and banks. Instead of stock certificates,
records in computer systems represent share ownership. Transferof shareholders’ rights is also processed electronically basedon the records in the accounts. This dematerialization systemapplies not only to stock certificates, but also to bonds with shareoptions, share options, investment units of real estate investment
trusts (REIT), preferred equity investment of financial institutions established by cooperative associations, and Exchange
Traded Funds (ETFs).
As of March 2010, the total number of issues handled was
3,906, including 3,727 share issues, 50 bonds with share options,
11 share options, 40 investment units, one preferred share issue,
and 77 ETFs. The number of companies participating in the new
system, including JASDEC participants, indirect AMIs and fundsettlement corporations, was 412. Under the system, foreign
financial institutions designated by competent ministers can also
take part in the system. As of March 2010, 27 foreign financial
institutions were participating as indirect AMIs.

12

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

The Book-Entry Transfer System for Stocks, etc.
Issuing company
Shareholder registry
General Shareholders
Notification

JASDEC
Transfer Book-entry transfer Transfer
Account
Account
Book
Book
Direct AccountManagement Institution(securities companies, banks, etc.)

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

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

Participants(shareholders)Participants(shareholders)Participants(shareholders)JASDEC participants and indirect AMIs (as of March 31, 2010)
JASDEC Participants by Category
Life & non-life
insurance companies
2 (1%)

Indirect AMIs by Category

Securities finance companies
3 (1%)
Stock exchanges, etc.
12 (5%)

Stock exchanges, etc.
1 (2%)
Banks, etc.
18 (27%)Banks, etc.
25 (10%)

Total

Total

245

66

Securities companies, etc.
203 (83%)

companies

Foreign indirect
AMIs
27 (41%)companies

Securities
companies, etc.
20 (30%)Note: “Banks, etc.” include The Norinchukin Bank, Tokyo Shoken Shinyou Kumiai, and Tokyo Bankers Association.
“Stock exchanges, etc.” include Japan Securities Dealers Association, Japan Securities Clearing Corporation, JASDEC DVP Clearing Corporation, three securities agents and three tanshi companies(which offer short-term credit brokerage services)

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

383.8

395.2 394.8 383.9

450

411.5 411.3 412.9
393.4 393.4 395.2 398.5 398.9 400.2 402.2 402.9 410.8
382.2 381.5 380.6 379.5 378.4 377.0 375.7
375.4 374.5
373.8 373.2 372.7

394.8

350
0

412.9
372.7

281.9 303.3
(FY)

320.0

2005 2006 2007 2008 2009

(Issues)

4,000
3,000

2009.4

5

6

7

8

9

10

11

12

2010.12

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

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201013

Bus ine s s O v er v i ew 01
Bo o k- En tr y T r a n sf er Sy stem f o r Sto c k s, etc .

New system also heralds other enhancements to user convenience
Since its introduction in January 2009, the new dematerialized
Book-entry Transfer System for Stocks, etc. has been operatingsmoothly, with no major problems. In April 2009, JASDEC organized three subcommittees to examine further improvement of
the new system: the Subcommittee for Stocks, the Subcommittee
for Bonds with Share Options, and the Subcommittee for ETFs.
These committees have promoted a number of initiatives.
As well as progressively responding to requests fromparticipants made prior to the introduction of the new system,
JASDEC has introduced additional transfer options as part ofits fail-safe measures, in accordance with the abolition of T+4
settlement of stocks, etc. on the financial instruments exchange.
For the issue of share options, we have upgraded the overallsystem, including improving the standard completion time for
new registration, developing a business scheme for exercising
share option rights, and taking steps to shorten the processing
time prior to the date of rights allocations.

For ETFs, we improved business process efficiency, reduced
settlement risk, reviewed the new registration process at the point
where trust is set, and reviewed the process involved with theexchange of stock basket investments such as beneficial rights ofinvestment trust and trust assets.
For Japanese Depositary Receipts (JDRs) and domestic
spot commodity ETFs, we investigated business processes andbegan preparation for the introduction of the dematerialized
Book-entry Transfer System in July 2010.
We have taken a number of other steps to ensure smootherprocessing, including developing a special system for accountnotifications in cases of new listings of large stock issues withparticularly high shareholder numbers, and implementing aliquidation service in connection with the termination of theprevious depository and book-entry transfer system.
We will continue our efforts to communicate effectively with
relevant parties, aiming to ensure stable operation while meetingthe needs of the market for convenience and user-friendliness.

Bond with Share Option account balance and number of issues
Balance in custody (end of FY or month)(Billion yen)

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

1,540.5
1,408.1 1,154.5 1,211.5
146
117
1,689.2
96
70

3,000
2,000

200

1,235.7 1,235.7 1,211.5

150
50

62

2005 2006 2007 2008 20092009.41,000
01,165.2 1,149.1 1,148.9 1,132.6 1,125.2 1,084.1 1,080.8 1,169.7 1,241.7

62

59

59

60

59

50

51

49

50

48

48

100
50

(FY)

5

6

7

8

9

10

11

12

2010.1

2

3

0

73

75

77

77

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

Exchange Traded Fund (ETF) account balance and number of issues
Account unit balance (end of FY or month)(Billion yen)

Number of issues (end of FY or month)

400

200.9

300
162.7

200

14

100
0

(FY)

192.7

38

77

67

66
187.3

230.6

180.1

68

70

70

71

71

72

80
230.6

179.4

174.7

174.7

169.5

167.0

168.7 172.5

169.8

174.4

174.9

2005 2006 2007 2008 2009

60
40

14

20
2009.4*Figures include the Depository and Book-entry Transfer System for Stock Certificates.

14

68

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

5

6

7

8

9

10

11

12

2010.12

30

Book-entry transfers
Stock-exchange transactions
Non-exchange transaction deliveries (NETDs)(Billion shares)

632.4

1,400
900

727.6 1,099.8 1,388.2 (Billion shares)
369.0
638.0
150
378.0 364.2
373.9

421.1

35.6

50

300
2005 2006 2007 2008 2009

(FY)

131.8

127.7
108.3 104.8

98.8

118.6

102.7

98.9

94.2

100

600
0

143.5

132.2

126.2

0

29.0

(FY) 2009.4

37.6

33.6

30.5

27.0

30.0

26.7

32.8

6

7

8

9

10

11

12

5

30.0

26.0

2010.1

2

29.7

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

General shareholder notifications
Number of general shareholder notifications
Number of issues(Billion shares/Issues)

Total shareholders(Notifications, in thousands)

946.3 127,240

1,000

361.1

400

551
20.8

0

(FY) 2008

369.7

2.4

2009

2009.4130,000

2,846

11,689

939

1,107
761
127 204

4,094

50

12,099

2,894

9,260

300
100

45,64645,416

6

7

80.5
1,244
1,164
213
145
5.3
8.7

323
10.4

7.9

5.4

5

1,482 2,667
181

78.4

46,000

899

8

9

10

11

12

10.6
1,135 2,825
175
314
5.5

2010.1

2

13,000
5,000
2,500
0

3

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

Individual shareholder notifications Information requests
Number of notices(Total record) notifications(Partial record) notifications

Number of issues

2,656(Notifications)

3,000(Issues)448(Notifications)

40(FY) 20082009(Issues)

212
79

220

356

30

* 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 haveopened accounts.
* FY2008 represents figures between January and March
2009.

16

200

200
0

27

400

80

72

1,155

1,200

500

359

400

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

0

0

20

131

100

10

45
(FY)

2008

0

2009

*FY2008 represents figures between January and March 2009.

Number of Shareholders (Data for Shareholder Notifications)(Thousand notifications)

17,00016,287

16,00014,935

14,951

15,002

15,061

15,092

15,216

15,401

14,941

2009.4

5

6

7

8

9

10

15,601

15,826

15,967

16,02012

2010.1

2

16,287

15,000
0

(FY)

2008

2009

11

3

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

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201015

Business Overview

02

Book-Entry Transfer
System forCommercial Paper
and Corporate Bonds

Supporting seamless and secure CP and corporate bond settlement
In March 2003 JASDEC launched the Book-Entry Transfer
System for Short-Term Corporate Bonds (dematerialized CP),the first completely dematerialized book-entry transfer system
in Japan, and in January 2006 this was extended to include
corporate bonds. In each system, custody procedures—issuance,transfer (trading), and redemption—are conducted based on thebalance recorded in the transfer account books. In addition, alltransactions related to issuance, transfer and redemption of CP
and corporate bonds can be processed by the DVP settlementlink with the Bank of Japan’s Financial Network System.
By linking the book-entry transfer system with our PSMS
(Pre-Settlement Matching System; see page 30), JASDEC
has realized straight-through processing (STP), which fully
automates the entire process, including trade matching and fund/securities settlement.

16

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

As a means of managing participation in JASDEC’s bookentry transfer system, we set up a multilayer holding structure
for account management institutions (AMIs) to address thediverse needs of participating investors and financial institutions.
Direct AMIs can open an account directly at JASDEC, andindirect participation is possible by opening an account at an
AMI. Another option for indirect participation is through the
opening of an account at an indirect AMI. Principal and interest
payments to bondholders are made by paying agents via AMIs,
in accordance with the multilayered structure.

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

Trade

Seller

Buyer

JASDEC
Trade matching

Trade matching

Affirmation

Notice of settlement
matching status

Settlement
parties

Notice of settlement
status(Awaiting fundsettlement)

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

Notice of transfer
completion

Notice of settlement
status(Awaiting fundsettlement)

Payment instruction
Payment request

Bank of Japan
Notice of receipt
completion

Settlement
parties

Notice of transfer
completion
Notice of receipt
completion

Fund
settlementcompany

Notice of settlement
matching status

Payment instruction

Fund
settlementcompanyJ a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201017

Bus ine s s O v er v i ew 02
Bo o k- En tr y T r a n sf er Sy stem f o r C o m mer c i a l Pa p er

Upgrading settlement statistics data to enhance CP transaction transparency
Commercial paper (CP) currently refers to short-term bonds ina dematerialized form issued by corporate entities as a meansof procuring short-term funds. As CP was previously drawn
as a promissory note in a physical form, risks involved in thetransfer and deposit of notes for large amounts were not always
avoidable, and a documentary stamp tax was also payable.
Accordingly, demand developed for an electronic book-entry
system that would eliminate the need for paper certificates. The
result was the creation of our first fully electronic book-entry
transfer system for dematerialized CP. Since the launch of thesystem seven years ago, almost all CP issued in Japan has beenhandled by this system.
In fiscal 2009, there was an easing in the impact of the world
financial crisis triggered by the bankruptcies of financial institutions in the previous year, and the fund-raising environment
recovered as a result of measures taken by the Bank of Japan andother strategies. However, there was also a shift toward longerterm financing and an associated sharp decline in the issuance of
CP. As of March 31, 2010, the total CP account balance in thesystem was ¥14 trillion on 4,730 issues, compared to the recordbalance of ¥23 trillion recorded at the end of FY2007.

To improve market transparency, JASDEC actively discloses
information on settlement figures. In January 2008, we began
issuing weekly reports on the CP balance by issuer category.
Moreover, since October 1, 2009, JASDEC’s public website has
shown daily, weekly and monthly reports on average issuance
rates of CP, classified by maturity, industry and credit rating,in line with an agreement with the Bank of Japan. These newservices are designed to promote a fairer and more transparent
CP market in Japan.

Participants of Book-Entry Transfer for CP (as of the end of March 2010)

Issuers 490 companies

Issuing/
paying agents

JASDEC

21

Fund settlement corporations

18

JASDEC
Participants(Direct AMIs)

Indirect
AMIs

71

11

148

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

CP holders

CP Account balance and number of issues
Account balance (end of FY or month)
Number of issues (end of FY or month)(Trillion yen)

30

5,848

6,129

(Issues)

7,000

5,759 5,869
4,730

20

18.6

18.9

20.2

5,546 5,525 5,400 5,366
5,214 5,186 5,181 5,043 5,349 5,207 5,010

4,730

6,000
5,000

18.7

17.6

17.8

17.5

17.5

17.0

15.5

14.1

16.3

15.7

16.7

16.2

4,000

15.8
14.1

3,000
10

2,000
1,000

0

(FY)

2005 2006 2007 2008 20092009.4

5

6

7

8

9

10

11

12 2010.1203Issuance, transfer and redemption of CP (daily average)
Redemptions
Total: over
¥5 trillion

Transfers(Trillion yen)Issuance

6.0

0.7

0.6

0.7

4.0

2.0

0.4

0.5

0.5

0.4

0.4

0.4

0.5

0.4

0.4

0.4

0.5

3.9

3.9

4.0

4.0

0.4

0.4

0.5
0.4

0.5
3.7

4.1

4.3

0.7

0.7

0.6

4.2

4.6

4.5

4.4

4.5

4.2

4.0

3.7

4.0

2.5

0.6

0

Transfers: ¥4.2 trillion(Annual total: over ¥1,000 trillion)(FY) 2005

0.4

2006 2007 2008 2009

0.5

0.4

2009.4

5

0.5

6

0.4

7

0.4

8

0.4

9

0.4

10

0.4

11

12 2010.1

0.4

2

0.4

3

Continually adapting to CP market needs
The settlement amount of issuance, transfer, and redemptionof CP handled by JASDEC’s book-entry transfer system may
exceed ¥5 trillion per day, and in combination with month-end
settlements of more than ¥10 trillion this means that JASDEC
settlements surpass the trading value per day at the Tokyo
Stock Exchange. In fiscal 2009, the aggregate issuance amountdeclined but the aggregate settlement remained above the ¥1,000
trillion mark it had passed for the first time in fiscal 2008, settinga record for active trading since the start of the system.

This huge settlement amount reflects the importance ofCP, which plays a crucial role in fund procurement by business
entities in Japan. As the sole provider of infrastructure for thesettlement of securities transactions, JASDEC fully recognizes
its responsibility to secure a high level of reliability in the bookentry transfer system. As the market for CP transactions evolves,
we will continue to make every effort to ensure that our systemremains responsive, reliable and up-to-date.

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201019

Bus ine s s O v er v i ew 02
Bo o k- En tr y T r a n sf er Sy stem f o r C o r p o r a te B o n d sExpanding functions to increase convenience and efficiency
JASDEC’s Book-entry Transfer System for Corporate Bonds
handles various types of bonds, both through public offeringsand private placements. These include corporate bonds, municipal bonds, bonds issued by investment firms, specified bonds
issued by special purpose companies (SPCs) and others, bondsof special corporations such as quasi-government and local
government bodies, and Samurai bonds (yen-denominated bonds
issued in the Japanese bond market by non-Japanese entities orforeign governments). In fiscal 2009 there was a rush to issue
bonds, in reaction to the difficulties companies faced raisingfinance in the previous fiscal year. In particular, there was a shift
from short-term to long-term financing and large volumes ofissuance of corporate bonds with strong credit ratings, as issuers
sought stable financing. There was also active issuance of corporate bonds aimed at individual investors, who were looking foropportunities to make an appropriate return in a low-interest-rateenvironment. Consequently, in mid-March, the highest balanceof bonds since the start of the Book-Entry Transfer System for
Corporate Bonds was recorded, at ¥247 trillion. As of the end of
March 2010, the number of bonds using the system was 71,202

issues, and the issue balance stood at ¥245 trillion. A new type ofbook-entry bond also emerged in the market: trust bonds, which
are issued by trustees. Starting in June 2008, a number of cases
began to emerge in which obligations relating to public offering
bonds went into default, reflecting the business downturn. To
ensure the smooth progress of civil rehabilitation proceedings inthese cases, JASDEC contacted the parties concerned at an earlystage, and worked with them to ensure optimal information flow
and understanding.
As part of measures to improve convenience for system
participants, we have revised the limits on transfers made on
issuance date, expanded the scope of application for certification
documentation in line with Article 86, Item 3 of the Act on BookEntry Transfer of Company Bonds, Shares, etc., and enabled
the issuance and redemption of securities products based on
non-cash underlying assets.

Participants of Book-Entry Transfer for Corporate Bonds (as of the end of March 2010)

Issuers 2,472 companies and organizations*

Issuing/
paying agents

JASDECJASDEC
Participants(Direct AMIs)

Indirect
AMIs

91

408

207

Fund settlement corporations

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

20

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

Bond holders

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

300

Number of issues (end of FY or month)

65,456(Issues)

72,817 73,298 71,202 73,001 72,402 71,900 71,889 71,738 72,126 71,943 71,768 71,776 71,774 71,664
71,202
241.0

240.2

245.5

240.0

243.7

243.1

241.4

240.0

245.7

244.9

244.5

243.7

247.0

246.3

80,000245.5

60,000200

181.3

40,000100
20,0000(FY) 2006

2007

2008

2009 2009.4

5

6

7

8

9

10

11

12

2010.12

30Promoting investments in Japanese bonds by non-residents
Investments in domestic securities by non-residents alreadyaccount for a significant proportion of the total investment inJapanese securities market. To raise the position of Japan’s
capital markets in the world, however, market functions must
be upgraded so as to attract more foreign investors. In January
2008, a system for tax exemption for non-residents on theinterest accrued on municipal bonds was inaugurated, followinga system similar to that used for Book-entry Transfer of Japanese
government bonds. Moreover, since June 1, 2010, in responseto the inclusion of bonds other than municipals in the scopeof tax exemptions for non-residents, we have begun to takeappropriate measures to promote the globalization of Japanese
capital markets and a greater degree of participation in them byoverseas investors.

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201021

Business Overview

03

Book-Entry Transfer
System for
Investment Trusts

A faster, safer approach to investment trust administration
The Book-entry Transfer System for Investment Trusts is a computer system for managing beneficial rights of investment trusts.
Under the system, beneficial certificates are dematerialized,
and beneficial rights are recorded electronically in the transfer
account books. This facilitates fast and efficient administrationof beneficial rights, reducing issuance and custodial costs
associated with physical certificates and decreasing the risk ofloss, theft or fraud.
The system covers investment trusts managed by trustors(hereinafter, simply called “investment trusts”). These investment trusts are contract-type investment trusts with the involvement of three parties — a trustor, a trustee and a beneficiary
who is an investor in the investment trust. (Exchange tradedfunds (ETFs) and investment trusts of the non-trustor instruction
type are outside the scope of the system.) Since the system waslaunched on January 4, 2007, all trustors and trustees involved ininvestment trusts have participated in the system, and thus almost
all investment trusts issued in Japan have been dematerialized.

22

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

The participants are diverse, consisting of not only securities
companies but also entities such as 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 897 companies as of March 31, 2010.
The Book-entry Transfer System for Investment Trusts
enables direct or indirect connection between trustors, trustees,account management institutions, and JASDEC. This ensures
greater security, accuracy, and speed of processing throughthe electronic management of the accounts of investment trust
beneficiaries.

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

Flow of funds
Flow of data

(beneficiary)

Private vendor financial network systems/fax

Issuers

Fund
distributors(trustors)(securities companies,
banks,
insurance companies,
etc.)

AMIs

Fund settlement
corporations（BOJ NET Fund
settlement
corporations）

JASDECBank of Japan
Japanese Bankers
Association financial
network system

Trustees

Fund settlement
corporations（BOJ NET Fund
settlement
corporations）

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201023

Bus ine s s O v er v i ew 03
Bo o k - En tr y T r a n sf er Sy stem f o r I n v estm en t T r u sts

Strong support from users
The total number of investment trusts handled by JASDEC as
of March 31, 2010 was 6,297 trusts, representing a year-on-yearincrease of 391 trusts and comprising 3,647 publicly-offeredand 2,650 privately-placed investment trusts. The number oftransactions undertaken for both new registrations (purchases)
and deletions (cancellations and redemptions) achieved newrecord highs, with the number of new registrations below that ofdeletions. On the other hand, the principal value of new registrations exceeded that of deletions, the reverse of the situation in
fiscal 2008. As a result, the outstanding balance at the end of
fiscal 2009 had increased ¥4 trillion year on year to ¥110 trillion,
comprising ¥78 trillion in publicly-offered and ¥31 trillion in
privately-placed investment trusts.

Fund settlement systems in the Book-entry Transfer System
for Investment Trusts include DVP settlement (using the Bank ofJapan financial network system) and non-DVP settlement (using
the Japanese Bankers Association financial network system foronline fund settlement between financial institutions). The useof DVP settlement, which involves less settlement risk, hasbeen increasing steadily among system users. In fiscal 2009, theproportion of settlements using DVP was 26% by number oftransactions and 61% by principal value.

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

Number of issues (end of FY or month)

200
5,603

150

105.8

(Issues)

5,906

6,297

5,957

5,968

5,978

6,041

105.5

110.2

105.7

106.2

106.5

107.3

6,057

6,110

6,146

6,199

6,244

6,236

6,280

6,297 8,000

108.1

108.5

109.0

109.2

109.4

109.8

110.2

110.2

6,000

100

4,000

50

2,000

0 (FY) 20072008
2009 2009.4
5
Account balance amounts are the sum of principal at the end of each period.

6

7

8

9

10

11

12

2010.12

3

0

Purchase and Cancellation/Redemption Transactions (Daily average)
Purchases(Transactions)

Cancellations/Redemptions

5,275

8,000
6,000

4,972

5,131

4,769

5,423

5,118

5,004

4,679
4,625

5,364

5,124

5,047

5,314

5

6

4,814
5,135
5,002

5,272

5,618

5,660

5,084

5,160

5,046

9

10

11

5,059

5,940
5,415
6,292
5,892
5,484
5,324
5,145

4,000
2,000
0

(FY) 2007

2008

2009

2009.47

8

12

2010.1

2

3

Principal Values of Investment Trusts for Purchases and Cancellations/Redemptions (Daily average)
Purchases(Billion yen)

Redemptions

600
400

280.7
289.1
274.4
302.3
314.2
249.7
303.7
275.3
301.0
278.9
248.1
282.8
261.4
273.8
334.0
313.5
314.4
314.0
309.5
305.7
301.9
305.2
300.5
285.7
284.4
284.4
270.5
260.3

312.5
364.8

200
0

24

(FY) 2007

2008

2009

2009.4

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

5

6

7

8

9

10

11

12

2010.1

2

3

Participants in Book-entry Transfer System for Investment Trusts(as of March 31, 2010: Numbers in parenthesis are for the previous year.)

Trustees 12 (12)Issuers 87(85)JASDECBOJ Net Fund settlement
corporations 46 (45)JASDEC Participants 187(191)
Designated fund distributors 382 (386)Indirect AMIs 710 (706)Indirect AMIs

Investment
trust management
3companies

Life and non-life
insurance companies

Financial institutions
for small businesses*

Securities
companies
92

Others** 8Others** 1
Total

710
100

Life and non-life
insurance companies
6

9

11

Banks

JASDEC Participants

Financial
institutions
for smallbusinesses*
503

Investment
trust
managementcompanies 17
Banks

38

Total

187
Securities
companies
109*Shinkin banks, Credit cooperatives, Agricultural cooperatives, Labor banks, etc.
**Others: Securities agents, securities exchanges, CCPs, call loan dealers, etc.

Dedicated to ongoing improvement
In response to requests made by system participants in aprevious survey, we have made particular efforts in fiscal 2009
to improve the functioning of the Book-entry Transfer System
for Investment Trusts. JASDEC is currently analyzing the resultsof a survey that focused on key matters such as the introductionof DVP settlement for redemptions and simplification of theprocedures for settlement for transfer between fund distributors,
and through fiscal 2010 and beyond will continue efforts tooptimize the functionality and user-friendliness of the system.

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201025

Business Overview

04

DVP Settlement
System for NETDs

Delivering safe, secure securities transactions
The Non-Exchange Transaction Deliveries (NETDs) in the DVP
settlement system for NETDs refer to Book-entry Transfers for
Stocks, etc., carried out by JASDEC for non-exchange transactions, and the majority of them consist of such trades of domestic
and overseas institutional investors buying and selling Japanesestocks, etc., through the DVP settlement system for NETDs.
Previously, the delivery of the securities and the paymentof the settlement amounts for non-exchange transactions havemostly been processed separately, so the transactions have been
exposed to the risk (principal risk) that settlement payments may
not be made even though the securities have been delivered. The
use of the DVP settlement system for NETDs links the deliveryof the securities and the payment of the settlement amounts
through the system, diminishing risk and making it possible forsecurities settlements to be conducted safely and reliably. To
further support reliability, the entire administrative process ishandled automatically and electronically using Straight ThroughProcessing (STP).

26

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

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 fortheir suitability in terms of financial condition, organizational
structure and other such factors before receiving authorizationfrom JDCC.
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 thetotal liabilities payable by 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 and the transfer of the securities fromthe seller’s into the buyer’s account is conducted separately foreach transaction (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).

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

Buyer’s
account

Securities
data

the system, enabling secure and reliable settlement

Provision/receipt of funds through current accounts at the Bank of Japan

Seller’s
account

Funding data

Account of JASDEC
DVP Clearing Corp.

Funding data

Buyer’s
account

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

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201027

Bus ine s s O v er v i ew 04
DVP S e t tlem en t Sy stem f o r N E T D s

Establishing key settlement procedures on 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 and bonds with shareoptions, etc.
As of the end of March 2010, 60 companies (comprising
16 banks and 44 securities companies) were participants in the
DVP settlement system for NETDs. Excluding internal transfers
within the same company, DVP transactions accounted forapproximately 60% of NETD transactions — evidence that useof the system has become firmly established as an importantcustomer-side settlement method. Reflecting the strong adoptionof the system, the DVP settlement commission payable pertransaction was reduced by ¥5 to ¥20 from April 2009. In
addition, a rebate of ¥5 per transaction was paid, in accordancewith the participant’s usage, against FY2009 DVP settlement
commission revenues in conformity with the policy of maintaining equilibrium between income and expenditure in financial
management.
Turning to the structure of the system, from September
2009 we decided to adopt margin levels adjusted for the typeand maturity period of each Japanese Government Bond (JGB)
held as collateral, based on greater scrutiny of these pledged
securities rather than a uniform application of a rate of 95%.

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

DVP transactions

300,000

100,411200,000

100,000

071,486

67,25559,37487,185(FY) 2007

96,301

2008

84,883

2009

77,78868,616

95,582

2009.4

66,311

86,07685,158

5

57,385

6

53,747

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 057,5888

9

1056,881

92,39478,866

77,267

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

28

59,145

95,69382,241

7

56,131

11

54,35985,17812

54,545 56,121

81,62280,5992010.1

2

3

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

2,500
2,000

Total value of net settlement payments

40
1,294.7

30
948.5

1,000
10.4

0

50

1,804.7

1,500

500

(%)

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

931.3

964.0

1,032.1

12.8

12.3

11.1

10.7

166.3

116.6

103.4

103.4

5

2008

2009

2009.4

905.3

12.7

911.5

1,025.6

979.0 982.6 930.8
879.8
15.2
14.7
13.7 20
11.2
9.9

946.7

892.7
13.8

12.4

94.6

122.8

127.2

106.2

148.9

8

9

10

11

12

11.4

10.4

130.5

102.9

6

7

144.7

2010.1

91.8

120.9

2

3

10
0

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

Aiming for an even greater level of convenience in the operation of a safe and secure system
To provide for cases of default by participants, liquid assets
have been secured by the use of the participant fund and bankcredit lines. And in order to limit the risk to within the boundsof liquid assets, maximum upper limits (the net debit cap) havebeen set for the liabilities payable by each individual participant.
To optimize and refine the system structure, we continuously
assess the applicable levels to ensure that they are suitable for
its requirements.
Appraisal levels applied to the securities held as collateralare subject to regular reassessment to ensure their soundness

and suitability, and we constantly strive to maintain a stable andsecure operational structure.
JDCC, as the administrator of the DVP settlement system
for NETDs, remains committed to providing the best possible
system for participants and will continue to pursue even higher
levels of convenience and service.

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201029

Business Overview

05

Pre-Settlement
Matching System(PSMS)

User numbers again hit record highMatching institutional investors’ transactions is a complex
undertaking, due to the wide range of organizations involved—
including investment trust management companies, securities
companies, trust banks and custody banks—and the hugeamount of transaction data exchanged between them.
In the past, matching was done manually by fax or telephone. Now, the process has been modernized and automated,with JASDEC providing centralized matching services usingsophisticated computer systems. Since launching the initialsystem in September 2001, JASDEC has been increasing therange of asset classes and services covered by the system. In
October 2007 we launched matching services for stock lending/borrowing transactions. We have expanded our services to makethem available for business entities as well as institutional
investors. As of the end of March 2010, 70 business entities wereusing the services.

30

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

In line with this expansion of asset classes and services, thenumber of transactions and users has been increasing year by
year. In fiscal 2009, the number of input /output transactions on adaily average basis was 1,326,883.
As of the end of March 2010, the number of registered users
had reached a new record of 694 companies, 57 more than therecord high set in the previous year. This was primarily as aresult of a steady increase in the number of business entity andlife and non-life insurance new users.
To promote further use of our services, in April 2009 we
reduced settlement matching fees in conjunction with the reduction in book-entry transfer fees for stocks, etc.

PSMS (for non-resident transactions)

Overseas
GlobalcustodiansJapan

Settlement
instruction

Investment
managers

Settlement
instruction

Order
Notice ofexecution
Allocation,
matching

Securities
companies

Settlement
instruction

Settlement
instruction

Subcustodians
Notice ofmatching status

Pre-settlement
matching
systemSettlement
instruction
Notice ofmatching status

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

Notice ofexecution

Order

Securities
companies
Notice ofexecution

Order

Stock
exchanges

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201031

Bus ine s s O v er v i ew 05
Pre-Settlement Matching System (PSMS)

Steady progress in international system standardization toward introduction of ISO20022
The securities market is continuing to internationalize, and we
recognize that our computer systems do not yet fully conformto recent developments in this field. For example, although we
use ISO15022, the international standard for messaging, when
we adopted this standard we customized the formats in order tosatisfy unique requirements in the Japanese market community.
In doing so, however, we understood that ultimately we needed
to maximize user convenience by achieving the greatest possible
degree of harmonization with international standards and connectivity with overseas systems.
Accordingly, since fiscal 2007 JASDEC has been pursuinga project to achieve full conformity with international standards,
through initiatives in a number of areas. In message standards,
JASDEC became a member of ISO20022 Standards Evaluation
Group for Securities under Technical Committee 68 of theInternational Organization for Standardization. ISO20022 is
the new international standard that defines the ISO platform
for the development of financial message standards, which isdesigned to replace the current ISO15022, and as such we aremaking efforts to ensure that the conditions prevailing in Japan
will be reflected in it. We have also begun to consider expanding
the scope of application to encompass JASDEC’s overallsystem, including the book-entry transfer systems for stocks,

32

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0CP, and corporate bonds. In November 2009, we established an
ISO20022 Subcommittee to move forward with the developmentof efficient systems planned for introduction in 2014.
Turning to our communication network, our aim is tointroduce the SWIFT network, which is used widely around theworld, while running our existing communication network inparallel, enabling users to choose between them. Introductionof the SWIFT network will, we believe, enable smooth overseas
connectivity—further increasing user convenience and thenumber of the participants.
By expanding the range of asset classes and services handled
by PSMS, and by steadily building conformity with international
standards, we are contributing to greater efficiency in Japan’s
securities markets.

Centralized matching method for three parties (domestic transactions)

Stock exchanges
Notice of execution

Investment trust
management/
advisory
companies

Order

Order
Notice of execution
Allocation

Pre-settlement
matching system
Investment instruction

Trade report

Trade matching

Notice of matching status

Notice of matching status

Investment instruction andtrade report

Securities
companies

Affirmation/
Disaffirmation

Trade reportaffirmation

Notice of trade reportaffirmation status

SSI
Trust banks
Settlement
matching

Notice of matching status

Notice of matching status

Request for DVP transfer

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

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

2,000
1,503
1,327

1,500

1,454

1,356

1,398

1,460
1,326
1,194

1,290

1,324

1,315

1,304

1,243

1,249

11

12

2010. 1

2

3

1,000

500

0

(FY)

2008

2009

2009. 4

5

6

7

8

9

10

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

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201033

Business Overview

06

Custody Services for
Foreign Stock
Certificates, etc.

Improving custody services with new infrastructure and systems
Since inaugurating services to process deposits, transfers andownership rights for foreign stock certificates, etc. in April
2006 in addition to our existing services for Japanese securities
such as stock certificates listed on domestic stock exchanges,
JASDEC has continued to develop new systems and services. In
January 2009 we introduced an efficient new system for foreign
stock certificates, etc. and related items, which enables DVP
settlement for NETDs, as well as providing dividend payment
data to JASDEC participants.
Although foreign stock certificates, etc. are generally
deposited with central securities depositories or custodians in the
countries where the issuing companies are located, settlementsof transactions at the stock exchanges in Japan are conducted
through book-entry transfers in JASDEC. JASDEC entrusts
dividend payments to relevant share-handling service organizations. Information on shareholders (beneficial shareholders) at
the record date for dividend is transferred to the share-handlingservice organizations by the JASDEC participants through
JASDEC. Based on this information, the share-handling service

34

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0organizations calculate the amount of dividends, which are thenpaid directly to the beneficial shareholders from the dividendpayment handling bank. JASDEC also undertakes the necessary
procedures regarding dividend taxation for local tax authorities
and other such entities, to ensure reduced tax rates under tax
treaties with the countries concerned. Voting rights at general
meetings of shareholders can also be exercised by beneficial
shareholders through instructions issued to JASDEC.
JASDEC therefore provides the infrastructure and services
necessary for reliable settlement of trading activities in foreign
stock certificates, etc., smooth exercise of shareholder rights, anderror-free receipt of dividends and other payments.

Overview of the new system relating to foreign stocks (effective January 2009)

Share-handling services organization (trust banks)

Japan Securities Clearing Corporation

Notice ofDividend
beneficial
information
shareholders

Stockexchange
DVP

Shareholder notice host

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

Collateral Beneficial
Dividend Notice ofshareholder
matching
information
balancereportStandard
non-DVP
transfer

Standard
DVP
transfer

Overseas CSDs/
custodian banks

Communication serverwith foreign CSDs/banks

Localcustody/transfer

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

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201035

Bus ine s s O v er v i ew 06
C us t o d y Ser v i c es f o r Fo r ei gn Sto c k C er ti f i c a tes, etc .

ETF market growth expected with listing of ETCs
In recent years, foreign companies have come to regard Japanas a major market for their financing needs, and there has beena growing number of foreign companies choosing to list only on
Japanese exchanges such as the Tokyo Stock Exchange or the
Osaka Securities Exchange, with no home-country listing. We
are also seeing a steady increase in Japanese listings of ETFs
structured overseas. Responding to these developments, JASDEC
commenced custody services for ETFs linked to movements in
a South Korean stock index in November 2007. In addition, in
March 2008, we made amendments to our business regulations
to enable custody services for overseas ETFs and commenced
custody services for ETFs linked to gold prices and ETFs linked
to commodity indexes. In response to the August 2009 listing offive physical precious metal-backed ETCs, JASDEC made thenecessary amendments to our business regulations in order tohandle these overseas Exchange Traded Commodities (ETCs)

similar to investment corporation bonds. A further 14 ETCs
linked to commodities indices were listed in March 2010, and themarket is expected to continue expanding.
At present, the Book-entry Transfer System for foreign
stock certificates, etc. includes four categories: foreign stocks(including ADRs); overseas ETFs (including ETCs); country
funds; and foreign covered warrants. At the end of March 2010,
the number of different issues handled by JASDEC in the three
categories of overseas shares, overseas ETFs, and country funds
stood at 42, while the number of foreign covered warrants
handled stood at 26.

Foreign stocks, etc.– number of issues/balance in accounts (excluding foreign covered warrants)
Balance in accounts (end of month)
Number of issues (end of month)(Thousand shares)(Issues)

200,00042

42

150,000

130,692

100,000

25

115,793 118,165 115,270 113,614

151,403
139,816 147,625

79,531

25

116,638
25

25

24

29

29

29

29

50
40

29

28

80,23379,56928

30
79,182 79,531

20
50,000010(FY) 20082009

2009.4

5

6

7

8

9

10

11

12

2010.12

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

400,000(Issues)371,300

358,608

106

88

300,000100

46(FY) 2008

2009

75

188,000 182,0004226

100,000

36

80

296,200 296,200
228,200
258,200
76
76
70
62

102,000

200,000

0

125
316,216

102,000 102,000 102,000 102,00026

2009.4

5

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

6

7

8

9

10

11

26

12

2010.1

26

26

2

50
25

3

0

Number of shares deposited/withdrawn
Number of shares deposited
Number of shares withdrawn(Thousand shares)

931,198
480,307539,187
246,465

1,000,000

119,919

122,882
90,70893,03481,360100,000

36,531
32,23040,85840,93221,501

6,525
6,912

7,294

8,000

3,440

5,287
3,324

4,000

2,122

305

0

(FY)

2008

2009

2009.4

5

6

7

3,767

1,446
2,117

2,093

1,761

8

9

425

10

11

12

2010.1

2

3

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

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

486,660 469,524
274,120
171,468

500,000
100,000

79,09880,00067,29353,99660,00040,00050,26943,03633,74022,605
15,95520,000
0

(FY)

2008

2009

2009.45

6

10,35942,87236,377

7

33,91921,868831,84732,926

20,33817,153

18,127

13,072910

1117,47712

32,49919,48011,0882010.1

2

18,2503

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

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201037

Business Overview

07

International
Relationships

Asian Bond Markets Initiative (ABMI)
Background
The Asian Bond Markets Initiative (ABMI) was adopted by
the ASEAN+3 (ASEAN plus China, Japan and Korea) Finance
Ministers’ Meeting as a measure to tackle the 1997 Asian financial crisis. Asian countries have been facing common difficulties
in the fund procurement required for medium- to long-term
investments within the region. Although savings rates arehigh in the region, capital markets are not yet fully developed.
In these circumstances, the region had depended heavily on
Western financial institutions for foreign currency-denominatedshort-term borrowings for long-term investments. This caused
maturity and currency mismatches in financing, which wereprimary factors in generating the Asian financial crisis.
The financial authorities of the countries participating in the
ABMI have been endeavoring to develop bond markets within
the region to enhance financial intermediary functions and allow
savings to be used for investment in the region. The successful
procurement of funds for long-term investments in the region
would significantly reduce currency and maturity mismatches inregional financing.
Under the supervision of the Finance Ministries and theCentral Banks of the ASEAN+3 countries, four Task Forces
have been established with the common goal of furthering thedevelopment of well-functioning bond markets with sufficientliquidity in the region.

38

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

For the past two years, JASDEC has been taking part (as arepresentative of Japan) in the Group of Experts (GoE),
which was established in April 2008 by Task Force 4 (whose
responsibility is to improve the bond market infrastructure) to
discuss key issues related to cross-border bond transaction andsettlement systems.

JASDEC engagement in GoE
In its turn, the GoE has set up two subcommittees: one to conduct
feasibility studies on proposals for the creation of settlement
systems for the region (Subcommittee A), and one to examine
possible barriers to cross-border transactions in ASEAN+3 Bond
Markets (Subcommittee B). These two subcommittees — comprising national and international central securities depositories
and major private-sector players such as custodian banks andsecurities companies, who have extensive expertise in the fieldof securities transactions in Asia — are carrying out intense
discussions of these questions. As a representative of Japan,
JASDEC is acting as the leader of Subcommittee B in pushing
forward with the project agenda.

In April 2009 the 5th meeting of the GoE was held in Tokyo
with the participation of 15 institutions, including the central
securities depositories, custodian banks for cross-border transactions, and the International Central Securities Depositories(ICSDs). Issues that were the subject of intense examination anddiscussion included analyses of cross border transaction costs,
settlement administration models, and issues selected fromsurveys (by questionnaire or interview) of market participants’views, such as the standardization of electronic message formats,tax systems, foreign exchange controls, capital controls, andother matters likely to present problems.
Subcommittee A continued to conduct feasibility studies on
the legal and regulatory aspects of the cross-border settlement
models, while Subcommittee B examined measures to remove
barriers, releasing a GoE Report in April of 2010.

ASEAN+3 Finance Ministers’ Meeting(China, Japan and Korea)

ABMI steering Group(coordination of efforts made by each Task Force)

Task Force 1

Task Force 2

Task Force 3

Task Force 4(Promoting the Issuance ofLocal Currency-DenominatedBonds (supply-side))(Facilitating the Demand for
Local Currency-DenominatedBonds (demand-side))(Improving theRegulatory Framework)(Improving the Related
Infrastructure for theBond Markets)

GOE (Group of Experts)
Chair: Korea, Vice-Chairs: Singapore, Thailand
Members: Representatives of Asian countries(Japanese representatives: JASDEC, etc.) and international players

Subcommittee A

Subcommittee B

Studies on establishment of regional settlement intermediary
Leader: Korea
Members: Representatives of Asian countries and international players

Identify settlement barriers in the Asian regional market(from practical and legal perspectives)
Leader: Japan
Members: Representatives of Asian countries and international players

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201039

Business Overview 07
International Relationships

Contribution to the development of the securities markets of Japan and Asia
In response to ongoing internationalization in the securities
settlement sector, JASDEC actively participates in international
forums such as regular CSD meetings and seminars, helping
ensure the timely exchange of securities market infrastructurerelated information on a global basis.

As one element of our efforts to build collaborative relationships with CSDs around the world, JASDEC has been following
a policy of signing MOUs on the exchange of information andthe undertaking of collaborative projects with overseas CSDs.
As of the end of March 2010, JASDEC had signed MOUs with

◆ July 3-4, 2009
11th ACG Cross Training Seminar
The 11th ACG (Asia Pacific CSD Group) Cross Training Seminar for
ACG members was held in Dhaka, Bangladesh, hosted by Central
Depository Bangladesh Limited (CDBL). In addition to ACG’s
original Information Exchange Task Force and the New Business Task
Force, the Legal Task Force — established in autumn 2009 — took
part in the seminar for the first time. The event was attended by 75
officials representing 16 organizations from 12 different countries.

Major International
Activities in
FY2009◆ April 28, 2009
MOU WITH MSCH&CD (MONGOLIA)JA S D E C a n d M o n g o l i a n
Securities Clearing House &Central Depository Co., Ltd(MSCH&CD) held a signing ceremony in Ulaanbaatar,
Mongolia for a Memorandum ofUnderstanding (MOU) on information sharing and cooperation.

April

May

June

July

August◆ May 20-22, 2009
10th Conference of CSDs
JASDEC attended the 10th Conference of CSDs in Budapest, Hungary and took part in a panel discussion concerning the role of CSD regulations.
JASDEC explained Japan’s regulatory framework, along with collaboration in regulatory authorities and market infrastructure, and the regulatory
trends in Asia. At the last session of the general meeting, the CEOs of CSDs around the world took part in a panel discussion concerning the future
outlook for CSDs. As a panelist in this discussion, Yoshinobu Takeuchi, president and CEO of JASDEC, explained the outlook for JASDEC’s
restructured settlement system and outlined collaborative projects in Asia, including the ASEAN Board and ABMI.

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Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

a total of 12 CSDs. We have also launched regular discussions
with current cooperative partners, accepted overseas trainees,and made other efforts to strengthen collaborative projects withoverseas CSDs. In addition, JASDEC is a participant in theInternational Securities Services Association (ISSA) corporate

action working group, serving as the coordinator for assessment
within the Asian region.
While supporting the rapidly growing Asian markets overall,
we aim to contribute to the development of the Japanese securities
market by strengthening cooperative relations around the globe.

◆ September 9-10, 2009
1st regular consultative meeting held with Korea’s KSD under MOU agreement
In an effort to strengthen relationships with MOU cooperative partners, JASDEC
launched regular discussions with Korea’s KSD. In the first meeting JASDEC explained
its compliance framework along with the book-entry transfer system and non-resident
tax exemption for corporate and government bonds, and engaged in an exchange ofideas with KSD.

◆ November 12, 2009
MOU with KSEI (INDONESIA)

October

JASDEC accepted four trainees from the Thailand
Securities Depository Company Limited (TSD), working in technical support for JASDECs Pre-Settlement
Matching System (PSMS) and other areas.

◆ December 15-16, 2009
1st regular consultative meeting held with
China SD&C
JASDEC held the first of what will be regular
discussions with China Securities Depository
and Clearing Corporation Limited (SD&C).
In the first meeting JASDEC explained its
Book-entry Transfer System for Stocks, etc.,
Book-entry Transfer System for Corporate
Bonds and Investment Trusts, DVP Settlement
System for Non-Exchange Transaction Deliveries(NETDs), and Custody Services for Foreign
Stock Certificates, etc.

JASDEC and PT Kustodian Sentral
Efek Indonesia (KSEI) held a signingceremony in Tokyo for a MOU.

September◆ November 16-20, 2009
Thailand TSD trainee program

November

December◆ October 8-9, 2009
The 13th ACG General Meeting
The 13th General Meeting of the ACG was held in Hanoi, Vietnam on
October 8-9, 2009, hosted by the Vietnam Securities Depository (VSD).
During the General Meeting, various panel discussions and presentations
were conducted under the main theme of “Facilitating the Developmentof Cross-border Linkages among ACG Members.” A Senior Management
Meeting was convened on the second day, where top management from
CSDs gathered to discuss issues concerning ACG’s future challenges
and deliberated the review of the organizational structure as a means offurther enhancing the ACG’s functions.

◆ October 9, 2009
MOU with VSD (VIETNAM)
JASDEC and Vietnam Securities Depository(VSD) held a signing ceremony for a MOU
in Vietnams capital, Hanoi, during the ACG
general meeting.

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201041