Points of Crossing
Amid the busy crisscrossing of securities between issuing companies and investors, one location has the task of channeling eachsecurity on the way to its proper home.
This location has to pursue speed, efficiency and convenience,
while being absolutely trustworthy and offering the greatest possible accuracy and reliability.
This location is JASDEC. At JASDEC, we are constantly awareof our public role as a core part of securities clearing and settlement infrastructure, with a responsibility to contribute to capital
markets and to society as a whole.

Contents
Management Message

2 - 3

Interview with the President & CEO

4 - 7

Corporate Governance

8 - 9

Board Members and Auditors

10 - 11

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

12 - 15

Book-Entry Transfer System for Commercial
Paper and Corporate Bonds

16 - 21

Book-Entry Transfer System for
Investment Trusts

22 - 25

DVP Settlement System for NETDs

26 - 29

Pre-Settlement Matching System (PSMS)

30 - 33

Custody Services for
Foreign Stock Certificates, etc.

34 - 37

International Relationships

38 - 41

Analysis of Business Performance andFinancial Results

42 - 43

Financial Section
Consolidated Financial Statements

44 - 56

Report of Independent Auditors

57

History

58 - 59

Corporate Data

60 - 61○ In this annual report, ‘JASDEC’ refers to Japan Securities Depository Center,
Inc. and its consolidated subsidiary JASDEC DVP Clearing Corporation.

Management Message

As an important part of social infrastructure,
JASDEC is steadily making progress on essential issues

As many of our readers will be aware, JASDEC has

We have been involved in a wide range of internationalchanged significantly since launching its original deposi-

activities to enhance settlement systems (both in Japan

tory and book-entry transfer business in 1991. We haveand abroad) and to pave the way for better cooperation

gradually increased our range of services to include

with overseas central securities depositories (CSDs) andcorporate bonds, investment trusts and foreign stocks,

other institutions.

and at the same time transformed our functionality withSince 2007 we have played a leading role in CSD

the introduction of the Pre-Settlement Matching System

Contact Group conferences, which serve to facilitate(PSMS), DVP settlement services for non-exchange

strong ties between CSD associations in each region. For

transaction deliveries (NETDs), and complete demateri-the 11th Conference of CSDs (CSD11) held in April 2011

alization of stock certificates.

we adopted an evolved organizational form as a WorldNow we must overcome new challenges and continue

Forum of CSDs (WFC), enabling even closer cooperation

our efforts to optimize our systems as a crucial element

between regional CSD entities. And as the convenor ofof social infrastructure that underpins the Japanese

the working committee discussing the structural reor-

economy.

ganization of the ACG (Asia-Pacific Central Securities

During the fiscal year ended March 31, 2011, we

Depository Group), we prepared a reorganization plan.

advanced our preparations towards the introduction of

At the 14th General Meeting of the ACG held in Mumbai,

ISO20022 message standards, the next-generation inter-

India in December 2010, the delegates approved thenational standards and the SWIFT network, as part of ourestablishment of an Executive Committee (with three-efforts to be compliant with the international standards.

year tenures for members) to be responsible for planning

We have been participating in the ISO/TC68 securities

and organizing ACG activities with a medium- and long-

SEG (Standards Evaluation Group) and taking part in theterm perspective.

actual development of several ISO20022 message formats.

We also promoted exchanges with countries that are

During this fiscal year, we completed our comparative

signatories to Memorandums of Understanding (MOU).

study of message formats we use in settlement match-

We held information exchange meetings with Korea

ing for domestic transactions and ISO20022 message

Securities Depository in April and in September 2010.

formats.

Following a request from Mongolian Securities Clearing*ISO (International Organization for Standardization) is the non-governmental organization that was established in 1947 in order to facilitate international coordination andunification of industrial standards (Headquarter office: Genève)*TC (Technical Committee) 68 is one of the committees in ISO, facilitating the standardization in the field of banking, securities and other financial services.

2

Japan Securities Depository Center, Inc. Annual Report 2011

Management Message

House & Central Depository Co., Ltd., we provided IT
assistance in May 2010, and in August we held a seminarin Ulaanbaatar, Mongolia for Mongolian regulatory
authorities and government officials. These are examplesof the work we are doing to support the rapidly growing
securities markets in Asia and to contribute to the development of the Japanese securities market.
Looking ahead, for the year to March 2012 we intend tocontinue ensuring the smooth and reliable operation of ourexisting systems and services, while acting on feedback fromusers relating to our system and management methods,
improving functionality and convenience, and optimizing
our infrastructure to meet the needs of a wide range ofmarket participants. We will also strengthen cooperation
with overseas CSDs to address the ongoing globalization of
settlement systems. We remain keenly aware of our social
responsibilities as the central body for the provision of the
securities clearing and settlement infrastructure that underpins the capital markets, and we are dedicated to providing
highly secure, convenient and efficient services. We verymuch appreciate your support over the past years, and lookforward to serving you in the future.

Haruhiko Kato, President & CEO

Yoshinobu Takeuchi, Chairman*CSD	A Central Securities Depository is an organization that conducts administrative operations for account-based book-entry transfers related to the movement (and registration)of securities corresponding to the delivery of spot stocks traded on securities exchanges, etc. CSDs conduct safekeeping of such securities in a concentrated manner onbehalf of individual investors and thus help eliminate the ‘paper-crisis’ of back-office settlement by securities companies and other financial institutions.
*ACG (Asia-Pacific Central Securities Depository Group) is an organization established in November 1997 to promote information and cooperation among securities depository
and clearing institutions in the Asia-Pacific region.
Japan Securities Depository Center, Inc. Annual Report 20113

Interview with the President & CEO

JASDEC now
and in the future
Haruhiko Kato
President & CEO

Q1. You have talked about a plan to replace the current system by January 2014.
Can you tell us about the main features of the system and the development schedule?

At JASDEC, based on the expected lifetime of our systemefficiency, and provide a more convenient service for users.

equipment, we plan to replace our systems by January 2014,

The main features of our new systems, along with the devel-

five years after the dematerialization of stock certificates

opment schedule, are as follows.

in Japan. At the same time we will improve reliability and4Japan Securities Depository Center, Inc. Annual Report 2011

Interview with the President & CEO• Main system features
A. Improved usability and reliability	We will take in requests regarding system and operating functions, and reflect law and tax system changes.
B. Reduced settlement risk
	We will make the systems capable of handling risk
reduction schemes for SLB (Stock Lending andBorrowing) settlement.
C. Reinforced system foundations	In order to provide improved reliability and efficiency,
we will conduct a review of the system structure(open system platform, system reorganization, etc.).

Also, we aim to improve usability by developing amore logical network, such as by integrating connections for users who currently require multiple
connections for different services.
D. International standards
	For our Pre-Settlement Matching System and theBook-entry Transfer Systems, we will adopt the
next-generation international standards, ISO20022.
In addition to our independent network, we aim to
improve market efficiency by enabling connections
through the SWIFT network.

Settlement infrastructure
institutions/user systems

Network

Bank of Japan (BOJ)

BOJ-NETJASDEC system
System solutions

Japan Government Bond Clearing Corporation (JGBCC)•

Japan Securities Clearing Corporation (JSCC)•

User
In-house system

SWIFT connection (ISO20022)
OR
JEXGW connection (ISO20022)
OR
Integrated channel connection (ISO15022)
File transfer connection

SWIFTNet connection achieved

Integrated network
Integration of connections
between users and JASDEC•

Open system platform•

System reorganization•

ISO20022 compatibility•

New establishment of JEXGW

Main Center
Backup Center

Participant information network

and JASDEC in preparation for the launch of full-scale
operations in January 2014.

Requirement
definition

2011
7-12

1-6

2012
7-12

1-6

System development

2013
7-12

2014
1
Official
launch1-6Connection/
overall test

Year
Month
Development
schedule• Development Schedule
For the period until June 2011, we collated requests forchanges to system and operating functions. From July
2011 we will spend around two years developing thesystems. During that time we will distribute outlines
of system processes and specifications, and conduct
guidance seminars. From July 2013, we will conduct
connection tests, overall test, and system trial transition at users, settlement infrastructure institutions

Measures to reduce settlement risk
related to SLB transactions*Integrated channel system scheduled to bediscontinued in January 2019

Integrated web terminal
Participant information web terminal

Response to user improvement requests

Japan Securities Depository Center, Inc. Annual Report 20115

Q2: We understand that you have set up the Subcommittee for SLB (Stock Lending andBorrowing) Settlement. What are the issues that they are looking into?

At present, market participants such as securities companies,(“block” DVP/DVD)” in which all the settlements related totrust banks and other players are able to conduct securities

SLB transactions and its collateral were performed concur-

lending and borrowing transactions using cash, negotiable

rently and the other was the “transactional DVP settlement

securities, etc. as collateral (“SLB transactions”). However,method” that used the DVP settlement system for Non-there has been no DVP settlement system for SLB transac-

Exchange Transaction Deliveries (NETDs). In December

tions, so these transactions have involved settlement risk.

2010, the Subcommittee published “SLB Settlement Risk

Actually, when Lehman Brothers went bankrupt in September

Mitigation Milestone,” incorporating both methods. This

2008, the counterparties couldn’t accept their receivable

year, the Subcommittee integrated the advantages of bothcollateral from Lehman Brothers, even though they had

methods and created a new measure.

already delivered the lending stocks to Lehman Brothers. It

The features of the measure are as follows;

reinforced us the importance of mitigating the settlement risk1) Settlement scheme based on JDCC’s DVP settlement

involved in SLB transactions. Under such circumstances, in2) According to the current practice for margin calcula-

Frameworks Pertaining to Financial and Capital Markets” intion, JASDEC will automatically calculate the SLB

which it noted that the strengthening of securities clearing

settlement amount related to each new lending andand settlement systems was an urgent issue.

return transaction

At JASDEC, even before the publication came out, we had3) The difference between the margin requirement that isalready offered trade matching functions for SLB transactions

calculated by the market participants according to thein our Pre-Settlement Matching System (PSMS). In addition wecurrent practice and SLB settlement amount that is calcu-

had been looking into the ways to link PSMS to the Book-entry

lated by JASDEC in 2) will be netted with the final settle-

Transfer System for Stocks, etc. and thus to realize DVP settle-

ment balance of DVP settlement services for NETDs

ment for SLB transactions. Following FSA’s publication, we4) The functions of “pledged securities” in DVP settlement

have set up “The Subcommittee for SLB settlement” in August

services for NETDs are remodeled to handle the securi-2010. The Subcommittee aimed to identify the functions neces-ties that are used as collateral in the current SLB market

sary to mitigate the settlement risk involved in SLB settlement.

The Subcommittee is currently discussing the detailed

The Subcommittee for SLB settlement (with the participa-

specifications of the measure and the associated market prac-tion of representatives from nine securities companies, fivetice. The measure is slated to enter service in January 2014

trust banks, one securities finance company, and observers

when we replace our current system.

from FSA, BOJ*2, JSDA*3, and JSCC*4) considered two ways

*1 FSA: Financial Services Agency

to mitigate the settlement risks (principal risk in particular) in
SLB settlement. One was the “concurrent settlement method

6services for NETDs

January 2010, FSA*1 published “Development of Institutional

Japan Securities Depository Center, Inc. Annual Report 2011

*2 BOJ: Bank of Japan*3 JSDA: Japan Securities Dealers Association*4 JSCC: Japan Securities Clearing Corporation

Interview with the President & CEO

Q3: What is your approach to Business Continuity Plan?

The fundamental aim of our Business Continuity Plan (BCP)

backup center in a remote location. The business data in theis to minimize the impact on all JASDEC’s participants andmain center is transferred to the backup center almost in real

stakeholders in the settlement infrastructure if some kindtime, and in case the main center becomes unavailable due toof disaster or compromising incident should occur. Our

disasters or system failures, the system can switch over to thesystems will enable business to continue to the greatest

backup system in about 90 minutes. We even have back-up

extent possible and will restore services rapidly if disruption

office space to host our business operations should the headis unavoidable.

office become unusable.

Specifically, we have clear BCP implementation,

During the Great East Japan Earthquake in March 2011,

operation and emergency communication procedures,

even though our head office was subjected to shaking of aa disaster strategy coordination headquarters on standby,

little less than a “5” on the traditional Japanese earthquake

and provisions in place for the delegation of authority. Our

scale of 1-7, there were no staff injuries or damage to our

BCP system includes robustly built data centers that haveoffice, and we were able to maintain our operations. We will

their own power generators and core systems with built-in

apply what we learned in this earthquake to make our busi-

redundancies. In case a really large-scale disaster or second-

ness continuity system even stronger.

ary calamity renders our main center inoperative, we have a

Switch within 90 minutes
Main Center

Backup Center

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

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

File transfer
gateway

Integrated
web terminal

Participant
information web
terminal

Japan Securities
Clearing
Corporation(JSCC)

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

Japan Securities Depository Center, Inc. Annual Report 20117

Corporate Governance

Our Basic Policy on Corporate Governance
JASDEC fully recognizes its social obligation as the central bodyfor the provision of the infrastructure for securities clearing andsettlement, which is an important base of the capital markets.
Accordingly, JASDEC has determined a basic management
policy of providing a highly secure, convenient and efficient
service. To this end, we ensure that our system meets the needsof users, including investors, issuing companies and market

intermediaries. We also make sure that our activities promote
corporate transparency and that our business operates with
fairness and accountability, in line with the public needs of ourfunction. Our commitment to corporate governance is to earn
and maintain a solid reputation for reliability as the central organization responsible for creating 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.
◇ Corporate Structure

Board of Directors

Business Operations Committee

The Board of Directors is composed of 19 members, and is basically structured to achieve a balanced approach to business withuser-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 fiveexternal directors come from an issuing company and a relatedorganization, or from the Japan Securities Dealers’ Association,
academia and the legal profession, enabling the Board to conduct
vigorous discussions from a broad perspective in considerationof the public good. In principle, the Board meets once a month todecide basic management policies and discuss other key issues.

Separately from the Board of Directors and the Board of Auditors,
JASDEC has set up the Business Operational Committee tofully 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 other information 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 anextremely high level of fairness and accountability. To achieve
this end, we have established the Advisory Committee, whichis composed of experts in financial and securities systems. The
committee advises JASDEC’s president from a broad perspective about wide-ranging issues relating to securities clearing andsettlement 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 non-exchange transaction deliveries (NETDs). In addition,
JASDEC’s Board of Directors receives reports regarding issues
decided by JDCC’s Board of Directors to ensure consistency inthe activities of the two companies.
An outline of JASDEC’s management structure and corporate
governance systems is presented on the next page.

Board of Auditors
JASDEC employs the corporate auditor system for corporate
governance instead of the committee system, as provided for in
the Companies Act. The Board of Auditors is made up of threeauditors, two of whom are selected from eligible participants(one each from a securities company and a bank) and all three(including an auditor who is serving on a full-time basis) areexternal auditors.
In principle, the Board of Auditors holds a regular meeting
each month. In line with auditing plans and the basic policies
established by the Board of Auditors, auditors attend important
meetings, including those of the Board of Directors, and assess
the status of services and assets to perform audits of directors.
To ensure that audits are effective, auditors work closely withdirectors and conduct regular exchanges of opinions, including
through meetings with the representative directors.

8

Japan Securities Depository Center, Inc. Annual Report 2011

Corporate Governance

Overview of JASDEC’s Management Structure and Corporate Governance Framework
Business Operations Committee

General Shareholders’ Meeting
Appointments/Dismissals

Board of Auditors

Auditing(Three including one auditor
serving on a full-time basis)
Auditing

Auditors
Offce

Appointment/
Supervision

Subcommittees
Consultation

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

Auditing

ReportingAccounting
auditors

Appointments/
Dismissals

Appointments/Dismissals

Opinions, reports

ChairmanPresident & CEO
Risk Management
Committee

Monitoring

Conveying
information

Compliance Office

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
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.
◇ Internal Audits, Corporate Audits, and Accounting Audits
JASDEC has established the Compliance Office, and internal
auditing accomplished primarily through onsite surveys basedon the audit plan, to assess the effectiveness of operational procedures. For corporate audits, an auditor serving on a full-timebasis routinely attends important meetings, such as those of theBoard of Directors and the Executive Committee (comprised ofmanaging directors serving on a full-time basis) and examines
circulars intended to obtain approvals of decisions by persons incharge. The full-time auditor performs audits in accordance withthe auditing plans established by the Board of Auditors, and provides the other Corporate Auditors with updates on the progressof auditing activities at the meeting of Corporate Auditors, whichtakes place monthly.
Auditors serving on a part-time basis attend meetings of theBoard of Directors and monitor the directors’ execution of theirduties. They also assess the legality of business operations byreviewing reports on auditing activities from the full-time auditor.
JASDEC assigns staff specifically to assist corporate auditors
in their audits.
Corporate Auditors perform audits in close cooperation with
the Company’s accounting auditors. This includes hearing reports
from the accounting auditors on auditing plans and the results of
the audits.

AdviceAdvisory Committee

JASDEC has two certified public accountants who perform
accounting audits for JASDEC in the capacity of accounting auditor under the Companies Act: Yohei Kishi and Naoto 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, amember 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 Corporate Auditors’ Limit of Liability
We expect directors and Corporate Auditors to fully demonstrate
the skills involved in successfully executing their responsibilities.
Additionally, to retain top-level professionals, we have set limits
on liability for damages incurred by directors and Corporate
Auditors.
◇ Resolutions on Election/Dismissal of Directors
The election of directors by resolution at the general meeting ofshareholders 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 vote of 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.
Japan Securities Depository Center, Inc. Annual Report 20119

Board Members and Auditors

Board members: 19
Auditors:
3

President & CEO

Yoshinobu Takeuchi

Haruhiko Kato
President,
JASDEC DVP Clearing
Corporation

Managing Director

Managing Director

Managing Director

Seikichi Ihara

Yoshinori Seyama

Munetaka Saito

Managing Director,
JASDEC DVP Clearing
Corporation

Managing Director,
JASDEC DVP Clearing
Corporation

Managing Director,
JASDEC DVP Clearing
Corporation

Director

Director

DirectorMoriyuki Iwanaga

Masakazu Kubota

Ritsuro Koza

Executive Officer,
Tokyo Stock
Exchange, Inc.

Senior Managing Director,
Japan Business
Federation

Senior Managing Director,
Nomura Securities
Co., Ltd.

Director

Director

Director

Masahiko
Koyanagi

Masaru Takei

Yasushi Tachihara

Executive Vice President,
Tokyo ElectricPower Company

Executive Officer,
SMBC Nikko
Securities Inc.

Executive Director,
Japan Securities
Dealers Association

10

ChairmanJapan Securities Depository Center, Inc. Annual Report 2011

Board Members and Auditors

Director

Director

Director

Ayumi Tomoda

Masahisa Nakagawa

Kunihisa Hama

Operations Head,
Citigroup Global
Markets Japan Inc.

Senior Managing Director,
Daiwa Securities
Capital Markets
Co. Ltd.

LawyerDirector

Director

Director

Masayuki Hoshi

Shigeyuki Maeda

Kanetsugu Mike

Managing Executive Officer,
Mizuho Corporate
Bank, Ltd.

Professor of Law,
Professional Schoolof Law (Law school),
Professional
Course in Law
Gakushuin
University

Managing Director,
The Bank ofTokyo-Mitsubishi
UFJ, Ltd.

Director

DirectorStanding Auditor

Hiroshi Misawa

Akira Moriwaki

Hiroshi Kitta

Senior Executive Officer,
Chuo Mitsui Asset Trustand Banking
Company,
LimitedManaging Executive
Officer,Mizuho Trust &Banking Co., Ltd.

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

Auditor

AuditorJun Ohta

Masahiko
Kawaguchi

Director and General
Manager,
Sumitomo
Mitsui Banking
Corporation

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

Japan Securities Depository Center, Inc. Annual Report 201111

Book-Entry
Transfer System
for Stocks, etc.

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

The Book-entry Transfer System for Stocks, etc. is operating to plan
The Book-entry Transfer System for Stocks, etc. began

established by cooperative associations, Exchange Traded

operations in January 2009. Stock certificates issued by all

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

abolished and became invalid. They were replaced by elec-

As of March 2011, the total number of issues handled

tronic records registered and managed by computer systems

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

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

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

Instead of stock certificates, records in computer systems

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

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

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

options, investment units of Real Estate Investment Trusts

were participating as indirect AMIs.

(REIT), preferred equity investment of financial institutions

The Book-Entry Transfer System for Stocks, etc.

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

Issuing company
Shareholder registry
General Shareholders
Notification

JASDEC

Direct AccountManagement Institution

224

companies

Direct AccountManagement Institution

91

companies

Foreign indirect
AMIs
50 (55%)

Indirect AccountManagement Institution

Securities
companies, etc.
23 (25%)

Securities companies, etc.
185 (83%)

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

Participants(shareholders)

Banks, etc.
17 (19%)

Total

Securities financecompanies
3 (1%)

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

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

Life & non-life
insurancecompanies
2 (1%)

Total

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

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

Participants(shareholders)

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

3,952

420

3,839

412.9

418.6

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

3,703

3,699

3,692

419.5
412.3

412.4

413.4

3,680

417.9

3,677

418.4

3,664

418.8

3,661

418.7

3,652

416.4

3,648
417.7

3,643

418.1

3,640

418.6

394.8

400
303.3

0

3,948

3,640

(FY)

2006

2008

4,000
3,500

320.0

2007

(Issues)

2009

2010

2010.4

5

6

7

8

9

10

11

12

2011.12

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

Japan Securities Depository Center, Inc. Annual Report 201113

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

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

options without compensation. For the individual share-

operating smoothly, with no major problems. JASDEC has

holder notification, we are working to reduce the number

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

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

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

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

the current system and change the system specifications. We

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

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

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

processing four issues of domestic ETFs.

meeting the needs of the market for convenience and userfriendliness.

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

1,540.5

1,600(Issues)

1,408.1

117

1,300

150
1,154.5

96

70

1,000
0

(FY)

2006

2007

2008

1,211.5 1,168.1
50

2009

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

45

46

45

46

46

44

44

44

1,250.8 1,246.9
431,168.1

43

43

43

2010

2010.4

5

6

7

8

9

10

11

100
50

2011.1

2

3

0

89

89

90

93

(Issues)

2,848

2,796

12

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

Exchange Traded Fund (ETF) etc., account balance and number of issues
Account unit balance (end of FY or month)
Number of issues (end of FY or month)(Million accounts)

4,000

2,009

3,000

1,927

2,000

66

77
2,306

2,563

2,308
74

76

76

81

2,327

2,328

2,337

83
2,301

2,749 2,563

2006

2007

75
25

14
(FY)

100
50

2008

2009

2010

2010.45

6

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

14

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

38

1,000
0

1,873

93

Japan Securities Depository Center, Inc. Annual Report 2011

8

9

10

11

12

2011.12

30

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

Book-entry transfers
Stock-exchange transfers

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

1,400
900
600

Transfers between JASDEC participants

88.5(Billion shares)

373.9

31.3

60

2006 2007 2008 2009 2010

(FY)

63.2

120

0

53.0

58.8

54.1

52.6

58.7

49.4

47.5

28.0

29.1

24.7

23.8

25.9

26.7

28.7

5

6

7

8

9

10

11

12

55.0 85.7

46.7

53.0

48.5

29.1

2010.4

(FY)

47.9

60.7

59.1

53.2

68.4

54.1

53.0

54.7

180

300
0

Internal transfers within the same companies

55.3

50.3

29.2

26.0

2011.1

2

42.0

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

General shareholders notifications
General shareholders notifications

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

(Billion shares)

1,000
400
300
4,094
551

100
50
0

946.3

(Notifications, in thousands)

11,8732,796

884

1,001.1

1,165743
129 185
2.3

2009

2010

46,292

46,647
377.5

20.8

2008

(FY)

Total shareholders

Number of issues

2010.4

5

82.0
6.8

7

8

9

306
11.5

3.3

10

47,00011,625

1,035 2,930
164

3.9

6

130,000

2,770

380.5

1,489
930
195
133
8.4

11

12

854
1,387
171
88.8

14.5

2011.1

2

21.0
3,497
301

12,000
5,000
2,500

3

0

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

Individual shareholder notifications(Total record) notifications

Number of issues(Partial record) notifications

448
2,656

(Notifications)

3,000

412

(Issues)

359
(FY)

2008

212

2009

2010

150
0

0

314

1,155

1,200

100

(Issues)

1,589

1,600

27
16

500

72

400

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

1,958 400

2,000

0

Information requests

Number of notices

(FY)

250
87

79

477

356

131

2009

100
50

45

2008

350

2010

0

*FY2008 represents figures between January and March 2009.

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

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

17,00016,287

16,45916,325

16,355

16,383

16,40816,43016,453

16,47916,495

16,402

16,422 16,426 16,459

2010

2010.4

5

6

7

8

9

10

11

12

2011.1

16,00014,93515,000
0

(FY)

2008

2009

2

3

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

Japan Securities Depository Center, Inc. Annual Report 201115

Book-Entry
Transfer System
for Commercial
Paper andCorporate Bonds

16

2

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

Supporting seamless and secure CP and corporate bond settlement
In March 2003 JASDEC launched the Book-entry Transfer

processing (STP), which fully automates the entire process,

System for Short-Term Corporate Bonds (dematerialized

including trade matching and fund/securities settlement.

CP), the first completely dematerialized financial instrument

As a means of managing participation in JASDEC’s book-in Japan, and in January 2006 this was extended to include

entry transfer system, we set up a multilayer holding struc-

corporate bonds. In each system, custody procedures—ture for account management institutions (AMIs) to addressissuance, transfer (trading), and redemption—are conducted

the diverse needs of participating investors and financial

based on the balance electronically recorded in the transfer

institutions. Direct AMIs can open an account directly at

account books. In addition, all transactions related to issu-

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

account at an AMI. Another option for indirect participation

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

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

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

paying agents via AMIs, in accordance with the multilayered

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

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

SellerTrade matching

Notice of settlement
matching status

Settlement
parties

Notice of settlement
status(Awaiting fundsettlement)

Affirmation

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

Trade matching

Notice of settlement
matching status

Notice of settlement
status(Awaiting fundsettlement)

Notice of receipt
completion

Payment instruction
Payment request

Notice of receipt
completion

Settlement
parties

Notice of transfer
completion

Notice of transfer
completion

Fund
settlement
corporation

Buyer

JASDECBank of Japan
Payment instruction

Fund
settlement
corporation

Japan Securities Depository Center, Inc. Annual Report 201117

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

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

porate bonds in a dematerialized form issued by corporate

by anything except for the Great East Japan Earthquake

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

our account balance and number of issues continued

risks involved in the transfer and deposit of notes for large

at around about the same level as in the previous

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

stamp tax was also payable. Accordingly, demand developed

account balance in the system was ¥14,033.2 billion

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

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

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

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

Issuing/
paying agents

JASDECJASDEC
Participants(Direct AMIs)

Indirect
AMIs

68

38

21
Fund settlement corporations

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

18

Japan Securities Depository Center, Inc. Annual Report 2011

CP holders

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

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

30

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

6,129

7,000

5,759

5,869
4,730

20

18.9

20.2

4,392

4,706

4,659

4,727

4,801

4,539

4,489

4,673

4,564

6,000

4,799

4,537

4,488

4,392

18.7
14.1

14.0

15.8

15.1

15.1

14.8

15.5

15.6

14.9

14.1

15.6

15.7

15.7

14.0

10

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

0

(FY)

2006

2007

2008

2009

2010

2010.4

5

6

7

8

9

10

11

12

2011.12

03

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

Total: over
¥4 trillion

Issuance(Trillion yen)

6.0
0.7

0.7

0.6
0.4

0.4

0.4

0.4

0.4

0.4

0.4

0.5

3.9

3.9

4.0

3.9

3.8

0.5

0.4

0.4

0.4

3.6

3.7

3.8

3.8

0.4

0.5

0.4

0.5

4.0
3.7

4.1

0.7

0.7

4.3

4.2

3.8

3.8

3.8

3.5

2.0

0

(FY)

2006

2007

0.6

2008

0.4

2009

0.4

2010

0.5

0.4

2010.4

5

0.4

6

0.4

7

0.4

8

0.4

9

0.4

10

0.4

11

12

2011.1

0.4

2

0.4

3

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

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

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

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

Tokyo Stock Exchange. In fiscal 2010, although the aggregate

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

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

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

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

up-to-date.

Japan Securities Depository Center, Inc. Annual Report 201119

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

handles various types of bonds, both through public offer-

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

ings and private placements. These include corporate bonds,

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

municipal bonds, bonds issued by investment firms, specified

year increase of ¥4,521.6 billion).

bonds issued by special purpose companies (SPCs), bonds

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

there were a number of defaults on obligations to public

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

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

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

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

East Japan Earthquake at the end of the fiscal year slowed

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

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

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

Issuers 2,539 companies and organizations*

Issuing/
paying agents

JASDECJASDEC
Participants(Direct AMIs)

Indirect
AMIs

88

432

204
Fund settlement corporations

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

20

Japan Securities Depository Center, Inc. Annual Report 2011

Bond holders

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

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

72,81773,298241.0(Issues)

71,202240.2

67,788245.5

71,015250.0

70,62770,364

246.9

246.2

70,00069,847

69,992

248.8

248.4

248.1

247.1

70,07469,71569,556

250.5

250.2

249.7

69,504

69,111

67,788
251.9
250.0

251.3

80,00060,000200

40,000100

0 (FY) 2007

20,000
2008

2009

2010

2010.4

5

6

7

8

9

10

11

12

2011.12

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

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

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

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

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

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

on the interest accrued on municipal bonds was inaugurated,

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

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

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

Japan Securities Depository Center, Inc. Annual Report 201121

Book-Entry
Transfer System
for Investment
Trusts22

3

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

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

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

JASDEC participants are diverse, consisting of not only secu-

ment trusts.

rities companies but also entities such as banks, insurance

The system covers investment trusts managed by trus-

companies, Shinkin banks, credit cooperatives, agricultural

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

cooperatives, and investment trust management companies

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

JASDEC participants was 881 companies as of March 31,

a beneficiary who is an investor in the investment trust.

2011.

(Exchange traded funds (ETFs) and investment trusts of

The Book-entry Transfer System for Investment Trusts

the non-trustor instruction type are outside the scope of theenables direct or indirect connection between trustors,

system.) Since the system was launched on January 4, 2007,

trustees, account management institutions, and JASDEC.

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

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

investment trust beneficiaries.

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

Flow of funds
Flow of data

(beneficiary)

Private vendor financial network systems/fax

Fund
distributors

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

AMIs

Fund settlement
corporations(BOJ NET Fund
settlement
corporations)

JASDECBank of Japan
Japanese Bankers
Association financial
network system

Trustees

Fund settlement
corporations(BOJ NET Fund
settlement
corporations)Japan Securities Depository Center, Inc. Annual Report 201123

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

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

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

Fund settlement systems in the Book-entry Transfer

publicly offered and 2,690 privately placed investment

System for Investment Trusts include DVP settlement (using

trusts. The number of transactions undertaken for both new

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

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

redemptions) achieved new record highs, with the number

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

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

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

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

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

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

value.

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

200
150

5,906

6,297

6,575

105.5

110.2

114.9

(Issues)

6,329

6,337

6,369

6,391

6,414

6,436

6,468

6,510

6,525

6,547

6,566

6,575

8,000

111.2

111.8

112.1

112.5

113.1

113.5

114.0

114.5

114.7

115.3

115.5

114.9

6,000

100

4,000

50

2,000

0

(FY)

2008

2009

2010

2010.4

5

6

7

8

9

10

11

12

2011.1

2

3

0

6,822

6,942

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

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

(Transactions)

8,000
6,000

5,686

5,118

4,769

6,525

6,169

6,244

5,412

5,301

5,381

5,386

6

7

5,489
5,291

5,506

5,261

6,745

6,672

6,539

6,159

5,907

6,196

5,743

5,499

6,348

6,395

6,030

4,000
2,000
0

(FY)

2008

2009

2010

2010.4

5

8

9

10

11

12

2011.1

2

3

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

600
282.8

261.4

400

260.3

288.6

301.9

311.0

2009

2010

382.7

332.3
349.9

317.5

240.1

230.2

259.2

270.1

261.2

6

7

8

305.4

273.6

274.0

248.6

266.9

299.1

293.5

303.9

319.4

9

10

11

12

325.7

371.4

311.9

296.2
326.8

349.8

200
0

24

(FY)

2008

2010.4

5

Japan Securities Depository Center, Inc. Annual Report 20112011.1

2

3

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

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

Trustees 11 (12)Issuers 83 (87)

JASDECJASDEC Participants 182(187)

BOJ Net Fund settlement corporations

46 (46)

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

Indirect AMIs
Life and non-life
insurance companies

Others
8

1

Total

699
97

6

OthersSecurities
companies

Banks

Life and non-life
insurance companies

9

11

82

JASDEC Participants
Financial institutions
for small businesses

Financial
institutions
for smallbusinesses
505

Investment
trust
managementcompanies 18

Total

182

Banks
37

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

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

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

between fund distributors in the Book-entry Transfer System

improve the functioning of the Book-entry Transfer System

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

the goal of having it begin operations in 2014.

tively major system reorganizations, such as the introduction

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

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

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

will continue efforts to optimize the functionality and user-

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

friendliness of the system.

Japan Securities Depository Center, Inc. Annual Report 201125

DVP Settlement
System for NETDs

26

4

Business Overview 4 — DVP Settlement System for NETDs

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

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

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

consist of such trades of domestic and overseas institutional

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

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

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

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

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

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

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

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

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

been delivered. The use of the DVP settlement system for

Settlement within the DVP settlement system for NETDs

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

the settlement amounts through the system, diminishing the

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

JDCC account within JASDEC and the transfer of the securi-

conducted safely and reliably. To further support reliability,

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

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

and electronically using Straight Through Processing (STP).

ment amounts pass through the JDCC’s account within the

Since May 2004, the DVP settlement system for NETDs

BOJ-NET funds transfer system and settlement is concluded

has been administered by JASDEC’s wholly owned subsid-

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

on each settlement date (net).

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

SellerTransfer of securities and payment carried out separately

Buyer

Payment of settlement amount

Use of DVP settlement
Account delivery through JASDEC

Seller’s
account

Securities
data

Account of JASDEC
DVP Clearing Corp.

Securities
data

Buyer’s
account

Stocks data transfer and payments are linked on the system, enabling secure and reliable settlement

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

Seller’s
account

Funding data

Account of JASDEC
DVP Clearing Corp.

Funding data

Buyer’s
account

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

Japan Securities Depository Center, Inc. Annual Report 201127

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

We began back-tests each working day to verify the

securities handled by JASDEC through its Book-entry

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

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

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

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

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

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

DVP transactions

300,000

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

84,883

83,29986,22459,37456,18659,727200920102010.4

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

7

8

989,302

90,387

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

51,76954,67659,54310

11

12

55,088100,000

0

(FY)

2007

2008

5

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

28

Japan Securities Depository Center, Inc. Annual Report 20112011.1

2

3

Business Overview 4 — DVP Settlement System for NETDs

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

2,500
2,000

Total value of net settlement payments

40
1,294.7
948.5

1,000
10.4

0

50

1,804.7

1,500

500

(%)

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

963.7

1,037.1

1,196.7

1,157.6
867.2

821.9

805.2
14.7

12.8

12.3

12.2

12.5

11.5

11.3

14.2 746.011.2

166.3

116.6

118.0

129.9

137.8

98.2

116.3

83.3

5

6

7

8

2008

2009

2010

2010.4

907.3

906.5

905.5

1,323.1

922.7

30
20

10.9

10.4

12.2

12.3

12.2

13.2

118.6

98.9

94.5

110.7

113.7

141.5

174.9 10

9

10

2

3

11

12

2011.10

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

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

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

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

JDCC is aiming to improve its systems and offer a greater

the bounds of liquid assets, JDCC has set maximum upper

range of services in its ongoing efforts to operate its systems

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

individual participant. To optimize and refine the system

convenience.

Japan Securities Depository Center, Inc. Annual Report 201129

Pre-Settlement
Matching System(PSMS)

30

5

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

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

plex undertaking, due to the wide range of organizations

and services, including foreign securities.

involved—including investment trust management

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

banks—and the huge amount of transaction data exchanged

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

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

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

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

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

services using sophisticated computer systems.

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

Since launching the initial system in September 2001,

companies) increased the number of registered users as of

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

record high set in the previous year.

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

PSMS (for non-resident transactions)
Overseas
GlobalcustodiansJapan

Settlement
instruction

Investment
managers

Settlement
instruction

Order

Securities
companies

Notice ofexecution
Allocation,
matching

Settlement
instruction

Settlement
instruction

Subcustodians
Notice ofmatching status

Pre-settlement
matching
systemSettlement
instruction

Notice ofmatching status

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

Notice ofexecution

Order

Securities
companies

Notice ofexecution

Order

Stock
exchanges

Japan Securities Depository Center, Inc. Annual Report 201131

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

we recognize that our computer systems do not yet fully

be reflected in international standards. This fiscal year we

conform to recent developments in this field. Though we use

largely completed our study comparing the message formats

ISO15022, the international standard for messaging, when

we use in settlement matching for domestic transactions

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

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

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

matching for domestic transactions with ISO20022 message

we needed to maximize user convenience by achieving theformats.

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

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

Accordingly, since fiscal 2007 JASDEC has been pursu-

the world, while running our existing communication

ing a project to achieve full conformity with international

network in parallel, enabling users to choose between them.

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

Introduction of the SWIFT network will, we believe, enable

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

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

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

In principle, we will use message formats that will

the tolerance matching function for non-resident transac-

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

throughout our entire system. We plan to bring our new

message standards, which is designed to replace the current

system into service in January 2014.

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

By expanding the range of asset classes and services

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

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

32

Japan Securities Depository Center, Inc. Annual Report 2011

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

Centralized matching method for three parties (domestic transactions)

Stock exchanges
Notice of execution

Investment trust
management/
advisory
companies

Order

Order
Notice of execution
Allocation

Pre-settlement
matching system
Investment instruction

Trade report

Notice of matching status

Trade matching
Notice of matching status

Investment instruction andtrade report

Affirmation/
Disaffirmation

Trade reportaffirmation

Securities
companies

Notice of trade reportaffirmation status

SSI

Trust banks

Settlement
matching

Notice of matching status

Notice of matching status

Request for DVP transfer

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

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

2,000
1,544

1,503
1,327

1,500

1,314

1,457

1,364
1,196

1,217

6

7

1,134

1,173

8

9

1,551
1,339

1,239

1,253

12

2011. 1

1,342

1,000
500
0

(FY)

2008

2009

2010

2010. 4

5

10

11

2

3

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

Japan Securities Depository Center, Inc. Annual Report 201133

Custody Services
for Foreign Stock
Certificates, etc.

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

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

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

dividend-paying banks.

Although foreign stock certificates, etc. are generally

JASDEC also undertakes the necessary procedures regard-

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

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

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

shareholders can also be exercised by beneficial shareholders

JASDEC entrusts dividend payments to relevant

through instructions issued to JASDEC.

share-handling service agents. Information on beneficial

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

vices necessary for reliable settlement of trading activities

to the share-handling service organizations by the JASDEC

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

participants through JASDEC.

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

Based on this information, the share-handling service

payments.

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

Notice ofbeneficial
shareholders

Shareholder notice host

Beneficial
shareholder
reportDividend
information

Custodian banks

Stockexchange
DVP

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

Collateralmatching

Japan Securities Clearing Corporation

Notice ofbalance

Account transfer host(settlement)

Standard
non-DVP
transfer

Standard
DVP
transfer

Communication
server with foreign
CSDs/banks

Localcustody/transfer

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

Japan Securities Depository Center, Inc. Annual Report 201135

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

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

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

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

warrants to its shareholders.

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

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

At present, Depository and Book-entry Transfer System

submit the necessary documents in Japan as well, including

for Foreign Stock Certificates, etc. includes five categories:

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

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

Japanese stock exchanges.

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

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

categories of foreign stocks, overseas ETFs, country funds,

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

and foreign share option certificates stood at 41, while the

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

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

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

200,000

42

150,000

130,692

100,000

25

42

41

42

42

42

41

40

40

40

40

39

39

41

50
40

79,53189,90582,591

86,55787,60081,584

82,77982,70583,943

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

50,000100 (FY) 2008

2009

2010

2010.4

5

6

7

8

9

10

11

12

2011.12

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

400,000

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

125

106

100,000
65
102,000

80,00010,000036

76,36026(FY) 2008

2009

2010

6,000
6,000
12

6,000

6,000

6,000

6,000

4

4

4

4

2010.4

5

Japan Securities Depository Center, Inc. Annual Report 2011

6

7

8

76,36076,36076,36065

65

6576,360 100
65

3,700

6,000
4

19

15

9

10

11

75
50
25

12

2011.12

30

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

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

500,000

246,465

118,585

115,478

91,632100,000

73,87970,000

7,362

8,000

6,522
5,207

4,692

4,000

2,337

(FY)

2009

2010

2010.4

5,710

4,775

830

0

7,431

6,052

5

1,324

1,940
769
745

507

6

7

8

884

9

2,934

2,249
1,010

10

11

2,071

1,686

1,517

12

2011.1

2

3

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

469,524500,000

274,120
258,701

300,000

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

17,014
18,22720,00017,257

15,965
11,1108,712
8,483

11,25810,000
0

(FY)

2009

2010

2010.4

5

6

7

8

9

16,62012,428

10,8446,671

10

15,676
11,536

8,434

11

12

11,531

2011.1

24,332

24,864
13,897

2

3

Japan Securities Depository Center, Inc. Annual Report 201137

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

38

Business Overview — International Relationships◆ Major International Activities in FY2010

2010① April 16, 2010

② May 25-27, 2010

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

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

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

April

①

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

CSD Contact Group meeting
②

June

③

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

④ August 23-27, 2010

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

July

August④
September⑤⑥⑤ September 6, 2010

⑦ October 24-28, 2010

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

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

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

Sibos 2010/CSD Contact Group meeting

12th ACG Cross Training Seminar
October⑦
November

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

December⑧

2011⑧ December 2-3, 2010

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

January

February⑨ April 13-15, 2011

March

11th Conference of CSDs

April

⑨

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

Japan Securities Depository Center, Inc. Annual Report 201139

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

The financial authorities of the countries participating in

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

Ministers’ Meeting as a measure to tackle the 1997 Asian

within the region to enhance financial intermediary functions

financial crisis. Asian countries have been facing common

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

difficulties in the fund procurement required for medium- to

The successful procurement of funds for long-term invest-

long-term investments within the region.

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

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

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

the region.

factors in generating the Asian financial crisis.

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

In September 2010, Task Force 3 (whose responsibility is

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

to improve the regulatory framework) established the ABMF

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

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

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

40

Japan Securities Depository Center, Inc. Annual Report 2011

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

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

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

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

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

held at its inaugural meeting at Tokyo in September 2010.

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

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

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

countries and to visit those countries in the Asian region to

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

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

the end of the year.

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

Task Force 1

Task Force 2

Task Force 3

Task Force 4

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

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

Improving
the Regulatory Framework
Chaired by Malaysia/Japan

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

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

Sub-Forum 2

Chair: Japan, Vice-Chair: Malaysia

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

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

Technical Working
Group (TWG)

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

Japan Securities Depository Center, Inc. Annual Report 201141

Analysis of Business Performance and Financial Results
Note: In the following section, all comparisons are with the previous fiscal year (fiscal 2010, ended March 31, 2011) unless stated otherwise.

During the reporting period ended March 31, 2011, the2.5 billion account units for ETFs (up 257 million accountJapanese economy began to show signs of improvement inunits), 13.7 million account units for REITs (up 3.1 million

personal consumption and corporate earnings. However,account units), and 700,000 account units for preferred

employment and wages remained depressed and the recov-

equity investment of financial institutions established byery in consumption lacked strength, lending considerable

cooperative associations (unchanged from the end of theuncertainty to the outlook.

previous fiscal year). The total number of book-entry

In securities markets, despite the Nikkei Average reach-transfers handled decreased by 1.3 million to 83.4 million

ing a 2010 calendar year high of ¥11,339 in April amidtransactions, with increases in both account balances andexpectations of a recovery in corporate earnings, factors

number of transactions, and the impact of the reduction insuch as European financial instability, U.S. economic

commission rates, as noted above, meant that earnings in

uncertainty and the strong yen led to a fall in the market,

this business segment for the year declined ¥773 million, orwith the Nikkei Average dropping below ¥9,000 in mid

4.2%, to ¥17,562 million. During the period under review,

August. It subsequently recovered to the ¥10,000 level inrefunds of ¥3,018 million were made on book-entry trans-

November, supported by an easing of the yen and additional

fers and account management.

measures taken by the FOMC in the U.S., and sustained thisAfter deduction of this amount, earnings from the Book-

level through the start of 2011. After the Great East Japan

entry Transfer System for Stocks, etc. decreased ¥1,049

Earthquake in March the Nikkei again fell through themillion, or 6.7%, to ¥14,544 million.

¥10,000 level as the extent of the disaster became apparent
and investors took flight from risk.
JASDEC’s operating revenues for fiscal 2010 declined¥1,246 million, or 5.9%, year on year, to ¥19,726 million,
primarily due to reductions in the rate of commission
charged for book-entry transfers for stocks, etc. While operating expenses decreased ¥1,270 million, or 6.9%, to ¥17,068
million, operating income increased ¥24 million, or 0.9%, to¥2,658 million. Income before income taxes increased ¥68
million, or 2.6%, to ¥2,673 million. As a result, net income
for the period was ¥1,608 million, representing a year-

Book-Entry Transfer for Commercial Paper
This business segment had a total of 488 corporate issuers
as of March 31, 2011, decreased by 2 issuers from the endof the previous fiscal year. Total transaction value was¥14.0 trillion, down ¥85.3 billion year on year, and the total
number of issuance, transfer and redemption transactions
handled was 283,202 transactions, a decrease of 21,457
transactions. Earnings from this business segment declined¥30 million, or 6.3%, to ¥457 million.

on-year increase of ¥291 million, or 22.2%. The earnings
performance of each of JASDEC’s business segments is asfollows.

Book-Entry Transfer System for Stocks, etc.
In this business, JASDEC was handling a total of 3,819 issues
as of March 31, 2011, representing 87 fewer issues than one
year earlier. Account balances included 418.6 billion shares(up 5.6 billion shares compared to one year earlier), ¥1.1
trillion for bonds with share options (down ¥43.4 billion),

42

Japan Securities Depository Center, Inc. Annual Report 2011

Book-Entry Transfer System for Corporate Bonds
This business segment was handling a total of 67,788 issues
as of March 31, 2011, representing 3,414 fewer issues than
one year earlier. Total transaction value was ¥250.7 trillion, an increase of ¥4.5 trillion year on year, and the total
number of issuance, transfer and redemption transactions
handled was 505,677 transactions, an increase of 24,587
transactions. Earnings from this business segment declined¥8 million, or 0.6%, to ¥1,288 million.

Book-Entry Transfer System for Investment Trusts

Pre-Settlement Matching System

This business segment was handling a total of 6,575 issues

Earnings from this business segment declined ¥9 million,

as of March 31, 2011, representing 278 more issues than one

or 0.5%, to ¥2,001 million. During the year under review

year earlier, and comprising 3,885 publicly offered invest-

JASDEC made refunds on pre-settlement matching services

ment trusts and 2,690 privately placed investment trusts.

totaling ¥615 million. After deduction of this amount, earn-

The total account balance, based on principle value, wasings from this business segment decreased ¥138 million, or¥114.9 trillion, representing a ¥4.6 trillion increase from one

9.1%, to ¥1,386 million.

year earlier and comprising ¥83.1 trillion in publicly offeredinvestment trusts and ¥31.7 trillion in privately placed

Custody Services for Foreign Stock Certificates, etc.

investment trusts. The total number of issuance, purchase

This business segment had an account balance of 89 million

and redemption transactions handled was 4,084,753 trans-foreign stocks, etc., excluding foreign covered warrants, as

actions, an increase of 143,945 transactions. Earnings fromof March 31, 2011, an increase of 10 million compared tothis business segment increased ¥22.1 million, or 2.1%, to

one year earlier. The account balance for foreign covered¥1,062 million.

warrants was 76 million warrants, a decrease of 25 million

DVP Settlement Services for NETDs

compared to one year earlier. The total number of trans-

This business segment handled a total of 20.4 million

transactions, 2,492 more than in the previous year. Earnings

NETD DVP settlements during the year ended March 31,

from this business segment declined ¥35 million, or 13.3%,

2011, a year-on year decrease of 0.3 million settlements, andto ¥228 million.

actions (including foreign covered warrants) was 152,407

earnings from this segment declined ¥13 million, or 1.5%,
to ¥943 million. During the year under review JDCC maderefunds on DVP settlement commissions totaling ¥182 million. After deduction of this amount, earnings from DVP
settlement services decreased ¥6 million, or 0.9%, to ¥760
million.

Financial results (consolidated)
Operating revenues

30,000Net income

Operating income(Millions of yen)

26,022(Millions of yen)

27,163

3,000
2,000

0
(FY ended)

2,605

2,673

3/2008 3/2009 3/2010 3/2011

189,283.71

182,082.62

154,949.18
156,934.33

1,547
2,617

Net assets(Millions of yen)

400,000

80,000300,000

60,000200,000

40,000100,000

20,00000(FY ended)

61,615
19,72620,000

4,368

(Yen)

4,000
20,973

10,000Total assets

Net income per share

1,333

1,317

1,608

1,000
0 3/2008 3/2009 3/2010 3/2011(FY ended)

54,83917,8973/200859,92518,8903/200957,454

19,8683/201021,1363/2011

Japan Securities Depository Center, Inc. Annual Report 201143

Consolidated Financial Statements
Consolidated Balance Sheets (As of March 31, 2010 and 2011)¥ (thousands)
2010
2011
ASSETS
Current Assets:
Cash and deposits
Accounts receivable – trade
Deferred income taxes (Note 12)
Designated assets for clearing funds (Note 3)
Other current assets
Allowance for doubtful accounts
Total Current Assets$ (thousands)(Note 4)2011

¥ 3,468,876
3,318,125
87,514
33,121,473
355,804(6,480)40,345,313¥ 4,516,648
3,443,641
160,592
33,530,047
323,882(7,256)
41,967,555$ 54,319
41,415
1,931
403,2483,895(87)504,721

Less: Accumulated depreciation
Total Property and Equipment

842,948
5,386,775
81,823
6,311,546(4,502,678)
1,808,867

859,4745,460,708
93,323
6,413,505(5,073,347)
1,340,158

10,336
65,673
1,122
77,131(61,014)
16,117

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

15,988,208
43,0559,165
18,03816,058,467

12,218,911
346,479
6,468
17,923
12,589,781

146,950
4,167
78
215
151,410Investment and Other Assets:
Investment securities (Note 2-(2))
Long-term prepaid expenses
Deferred income taxes (Note 12)Long-term refundable lease deposits
Claims provable in bankruptcy, rehabilitation and other
OthersAllowance for doubtful accounts
Total Investment and Other Assets

356,179
46,642774,595
506,282
44,356
1,000(16,621)
1,712,434

414,128
18,265598,833
503,534
31,1141,000(10,181)
1,556,695

4,980
219
7,202
6,056
374
12
(122)
18,721¥59,925,084¥57,454,190$690,970

Property and Equipment:
Buildings and structures
Tools and furniture
Lease assets

Total Assets

The accompanying notes are an integral part of these statements.

44

Japan Securities Depository Center, Inc. Annual Report 2011$ (thousands)(Note 4)2011

¥ (thousands)
2010
2011
LIABILITIESCurrent Liabilities:¥   823,303¥   769,998$   9,260

4,800,000——

Lease obligations (Note 9)

20,00322,789274

Income taxes payable

101,677

894,525

10,758

Allowance for employees’ bonuses

182,234

183,096

2,202

Allowance for executives’ bonuses

20,70020,500247

Consumption taxes payable

391,978

117,831

1,417

33,121,473

33,530,047

403,248

182,401

329,609

3,964

39,643,774

35,868,397

431,370

Lease obligations (Note 9)

52,66840,363485

Allowance for employees’ retirement benefits (Note 10)

256,723

311,333

3,744

Allowance for executives’ retirement benefits

41,16030,000361

Allowance for loss on business trust agreement cancellation

62,694

67,121

807

Total Long-term Liabilities

413,246448,818

5,397

40,057,021

36,317,216

436,767

4,250,000

4,250,000

51,112

Capital surplus

4,250,000

4,250,000

51,112Retained earnings

11,368,062

12,636,974

151,979

Total Shareholders’ Equity

19,868,062

21,136,974

254,203

Total Net Assets

19,868,062

21,136,974

254,203

Total Liabilities and Net Assets¥59,925,084¥57,454,190$690,970

Accounts payable – trade
Short-term borrowings (Note 5)

Deposits received for clearing funds (Note 3)
Other current liabilities
Total Current Liabilities

Long-term Liabilities:

Total Liabilities

NET ASSETS
Shareholders’ Equity:
Common stock
Authorized: 10,000 shares
Issued: 8,500 shares

The accompanying notes are an integral part of these statements.

Japan Securities Depository Center, Inc. Annual Report 201145

Consolidated Financial Statements
Consolidated Statements of Income and Comprehensive Income (For the years ended March 31, 2010 and 2011)

Operating Revenues
Operating Expenses:
Executives’ compensation and bonuses
Salaries and bonuses
Severance costs for employees (Note 10)
Maintenance of systems
Outside services
Depreciation and amortization
Rent
Advertisements
OthersTotal Operating Expenses
Operating Income
Other Income (Expenses):
Interest income
Operational revenue on designated assets for clearing funds
Equity in earnings of affiliates
Interest expenses (Note 9)
Commitment fees
Fees for fund operation of designated assets for clearing funds
Loss on disposal of fixed assets (Note 11)
Reversal of allowance for loss on business trust agreement cancellation
Reversal of allowance for loss on computer center transfer
Reversal of allowance for doubtful accounts
Loss on business trust agreement cancellation
Others, net
Total
Income before Income Taxes and Minority Interests
Income Taxes (Note 12)
Current
Prior years
Deferred
Total income taxes
Income before Minority Interests
Net Income
Income before Minority Interests
Comprehensive Income
Comprehensive income
Comprehensive income attributable to JASDEC shareholders
Comprehensive income attributable to minority shareholders¥ (thousands)
2010
2011
¥20,973,007¥19,726,909$ (thousands)(Note 4)2011
$237,244

209,497
1,918,927
102,9706,868,608
358,300
6,386,058
670,626
109,835
1,713,850
18,338,677
2,634,330

210,976
1,966,166
102,322
6,779,277
2,350
5,725,759
551,479
78,4601,651,664
17,068,456
2,658,452

2,537
23,646
1,230
81,531
28
68,861
6,632
944
19,864205,273
31,971

254
19,76759,261(66,265)(43,900)(7,794)(178,610)
1,010
33,200—(52,878)
9,091(226,865)
2,407,464

110
18,19062,249(20,812)(42,678)(7,790)(3,191)
—
—
8,126
—
5,812
20,017
2,678,469

1
219
748
(250)
(513)
(93)
(38)
—
—
97
—
69
241
32,212

224,403
972,282(106,289)
1,090,396—
1,317,068—¥        —966,873—
102,684
1,069,557
1,608,911
1,608,911
1,608,911¥ 1,608,911

11,628—1,235
12,863
19,34919,34919,349$ 19,349——

1,608,911—

19,349—The accompanying notes are an integral part of these statements.

46

Japan Securities Depository Center, Inc. Annual Report 2011

Consolidated Statements of Changes in Net Assets (For the years ended March 31, 2010 and 2011)¥ (thousands)
Number ofcommon stock
sharesCommonstock

CapitalsurplusRetainedearnings

Total
shareholders’equityTotal
net assets

8,500¥4,250,000¥4,250,000¥10,390,994¥18,890,994¥18,890,994

Cash dividends

—

—

—

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

Net income for the year

—

—

—

1,317,068

1,317,068

1,317,068

Balance as of March 31, 2010

8,500

¥4,250,000¥4,250,000¥11,368,062¥19,868,062¥19,868,062

Cash dividends

—

—

—

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

Net income for the year

—

—

—

1,608,911

1,608,911

1,608,911

Balance as of March 31, 2011

8,500

¥4,250,000¥4,250,000¥12,636,974¥21,136,974¥21,136,974

Balance as of March 31, 2009

$ (thousands) (Note 4)
Number ofcommon stock
sharesCommonstock

CapitalsurplusRetainedearnings

Total
shareholders’equityTotal
net assets

8,500$51,112$51,112$136,718$238,942$238,942

Cash dividends

—

—

—

(4,088)(4,088)(4,088)Net income for the year

—

—

—

19,34919,34919,349Balance as of March 31, 2011

8,500

$51,112$51,112$151,979$254,203$254,203

Balance as of March 31, 2010

The accompanying notes are an integral part of these statements.

2010

2011

U.S.Dollars(Note 4)2011

¥154,949.18
40,000¥189,283.71
40,000$2,276
481

8,500

8,500

Yen
Per Share (Note 17)
Net income – primary
Dividends
Weighted-average number of common stock outstanding (in shares)—

Japan Securities Depository Center, Inc. Annual Report 201147

Consolidated Financial Statements
Consolidated Statements of Cash Flows (For the years ended March 31, 2010 and 2011)¥ (thousands)
2010
2011
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 in allowance for employees’ retirement benefits
Decrease in allowance for executives’ retirement benefits
Decrease in allowance for loss on business trust agreement cancellation
Decrease in allowance for loss on computer center transfer
Interest income
Interest expenses
Equity in earnings of affiliates
Foreign exchange loss
Loss on sale of property and equipment
Loss on disposal of property and equipment
Loss on disposal of intangible assets
Increase in accounts receivable – trade
Decrease in accounts payable – trade
Decrease (increase) in other assets
Decrease (increase) in other liabilities
Sub-totalInterest and dividends received
Interest paid
Income taxes paid
Income taxes paid for prior years
Income taxes refunded
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities:
Payments for purchase of property and equipment
Payments for purchase of intangible assets
Proceeds from repayment of lease deposits
Payment of lease deposits
Other payments
Net Cash Used in Investing Activities
Cash Flows from Financing Activities:
Short-term borrowings
Repayment of short-term borrowings
Repayment of lease obligations
Cash dividends paid
Net Cash used in Financing Activities
Effect of exchange rate changes on cash and cash equivalents
Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year$ (thousands)(Note 4)2011

¥ 2,407,464
6,386,058
327(2,867)400
57,300—(940,103)(242,379)(254)
66,265(59,261)294
730
47,232
131,378(157,039)(45,122)
98,970828,786
8,578,181
11,754(92,300)(685,984)(903,351)
200,702
7,109,001¥2,678,469
5,725,759(5,664)861(200)
54,610(11,160)——(110)
20,812(62,249)
2,607
—
3,000
190
(112,274)(53,305)(103,819)(269,088)
7,868,440
4,410(22,167)(197,796)(59,016)
233,786
7,827,657$32,21268,860
(68)
10
(2)
656
(134)
—
—
(1)
250
(748)
31
—
36
2
(1,350)(641)(1,248)(3,236)
94,62953(266)(2,379)(710)
2,811
94,138(314,290)(1,734,155)
266,575(258,082)(1,000)(2,040,953)(66,637)(1,551,786)
4,128(1,380)—(1,615,676)(801)(18,663)49(16)—(19,431)22,800,000(26,400,000)(14,855)(340,000)(3,954,855)(294)
1,112,897
2,355,978¥ 3,468,876—(4,800,000)(21,600)(340,000)(5,161,600)(2,607)
1,047,772
3,468,876¥4,516,648—(57,727)(260)(4,088)(62,075)(31)
12,601
41,718$54,319

The accompanying notes are an integral part of these statements.

48

Japan Securities Depository Center, Inc. Annual Report 2011

Notes to the Consolidated Financial Statements
1. Basis of Presenting the Consolidated Financial Statements
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
with accounting principles and practices generally acceptedin Japan, which are different in certain respects as to theapplication and disclosure requirements of International
Financial Reporting Standards.
2. Summary of Significant Accounting Principles(1) Consolidation
The consolidated financial statements include theaccounts of Japan Securities Depository Center,
Inc. and its wholly owned subsidiary, JASDEC DVP
Clearing Corporation (hereafter, “JDCC”) which is the
only subsidiary of the Company. JDCC operates undera fiscal year ending March 31, which is the same as thatof the Company.
(2) Application of equity method
The equity method is applied to shares of Tosho System
Services Co., Ltd. (hereafter, “TSS”) included andpresented in Investment securities.
(3) Property and equipment (except lease assets)
Depreciation for buildings, excluding improvements, iscalculated using the straight-line method. Depreciationfor other capital assets is calculated using the decliningbalance method.
The main estimated useful lives are as follows:		
Buildings and structures
3-50 years
		
Tools and furniture
2-15 years(4) Intangible assets (except lease assets)
Costs of software for internal use are capitalized andamortized on a straight-line basis over an estimateduseful life of 5 years. Other intangible assets are amortized using the straight-line method over the period
registered by the Corporation Tax Act.
(5) Lease assets
The straight-line method is applied to assets leased
under finance leases without ownership transfer andthe residual value is zero. The Company accounts forfinance leases without ownership transfer as operatingleases if the transaction commenced prior to the previous fiscal year ended March 31, 2009.
(6) Allowance for doubtful accounts
The allowance for doubtful accounts is provided at an
amount determined based on the Company’s historical

average charge-off ratio for ordinary receivables, andestimates of uncollectible amounts determined by reference to specific doubtful receivables from customers
which are experiencing financial difficulties.
(7) Allowance for bonuses
Allowance for employees’ bonuses and allowance for
executives’ bonuses are provided for bonuses attributable to each fiscal year based on the estimated amountof the respective payments.
(8) Allowance for loss on business trust agreement
cancellation
Allowance is provided for an adjustment fee on cancellation of entrusted operations due to dematerializationof stock certificates.
(9) Consumption taxes
The consumption taxes withheld by the Company andits subsidiary on sales and the consumption taxes paidby the Company and its subsidiary on purchases ofgoods and services are not included in the amounts of
the relevant accounts in the accompanying statements
of income. The consumption taxes withheld and paid
are recorded as an asset or a liability, as the case may
be, and the net balance is shown in the balance sheets.
(10) Adoption of new accounting standardsi) From the fiscal year ended March 31, 2011, theCompany has applied the Accounting Standard
for Equity Method of Accounting for Investments(Accounting Standard Board of Japan Statement
No.16, March 10, 2008) and the Principal Solution
on Unification of Accounting Policies Applied to
Associates Accounted for Using the Equity Method(Practical Issues Task Force No. 24, March 10, 2008).
This has not resulted in any significant effect on
income.
ii) From the fiscal year ended March 31, 2011, theCompany has applied the Accounting Standard for
Asset Retirement Obligations (Accounting Standard
Board of Japan Statement No.18, March 31, 2008)
and the Guidance on Accounting Standard for Asset
Retirement Obligations (Accounting Standard Boardof Japan Guidance No.21, March 31, 2008). This has
not resulted in any significant effect on income.
(11) Changes to presentation
From the fiscal year ended March 31, 2011, theCompany has disclosed “Income before minority
interests” based on the Partial Amendments to Cabinet
Office Ordinance on the Regulation for Terminology,
Forms and Preparation of Financial Statements (Cabinet
Japan Securities Depository Center, Inc. Annual Report 201149

Office Ordinance No. 5, March 24, 2009) according with
the Accounting Standard for Consolidated Financial
Statements (Accounting Standard Board of Japan
Statement No. 22, December 26, 2008).
(12) Supplemental information
From the fiscal year ended March 31, 2011, theCompany has applied the Accounting Standard for
Presentation of Comprehensive Income (AccountingStandard Board of Japan Statement No. 25, June 30,2010).
3. 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 theCompany, receives cash or securities as collateral from the
DVP participants whom JDCC officially acknowledge as
parties who undertake securities obligations in accordancewith the provisions set forth in JDCC’s general provisions inaccordance with Article 156, Paragraph 7-1, of the Financial
Instruments and Exchange Act (Law No. 25, 1948).
JDCC manages cash and securities entrusted by the DVP
participants as clearing funds defined in Article 156-11 of
the Financial Instruments and Exchange Act separatelyfrom other assets in accordance with JDCC’s generalprovisions and Article 7 of the Cabinet Office Ordinanceon Financial Instruments Clearing Organization (Cabinet
Office Ordinance No. 76, 2002).
(1) Participant fund specified assets andparticipant 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 therespective obligations of DVP participants are covered.
The aggregate amount of minimum participant funds
required by JDCC’s general provisions as of March 31,
2010 and 2011 was ¥15,000,000 thousand ($180,390
thousand). In the event a DVP participant defaults on
the required payment obligations of the DVP for the
NETDs settlement system, JDCC shall take deposits
from the participant fund of this DVP participant to

50

Japan Securities Depository Center, Inc. Annual Report 2011

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
are presented as Designated assets for clearing assets
and Deposits received for clearing funds, respectively.
(2) Collateral securities
Under the DVP for NETDs settlement system, DVP
participants are able to entrust marketable securities
listed in JDCC’s general provisions (hereafter, “collateral securities”) to ensure 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 insecurities markets or through other methods deemed
appropriate by JDCC.
As of March 31, 2010 and 2011, the market valueof collateral securities entrusted to JDCC was¥109,579,182 thousand and ¥84,977,948 thousand($1,021,983 thousand), respectively.
4. U.S. Dollar Amounts
Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of ¥83.15=US $1,
the rate of exchange as of March 31, 2011, has been used intranslation. The inclusion of such amounts is not intended
to imply that Japanese yen have been or could be readily
converted, realized or settled in U.S. dollars at this or any
other rate.
5. Commitment Line and Overdraft Contracts
To ensure agile and stable fund raising, the Company has
overdraft contracts (¥7,000,000 thousand ($84,185 thousand) in total) with four banks. To prepare for a possible
deficiency of funds due to a default by DVP participants,
JDCC has concluded commitment line agreements(¥45,000,000 thousand ($541,190 thousand) in total) withthree banks, as part of a liquid fund for completing fundsettlement on the required day.
6. Net Assets
The Companies Act of Japan provides that an amountequal to 10% of the amount to be distributed as distribu-

tions of capital surplus (other than the capital reserve)
and retained earnings (other than the legal reserve) betransferred to the capital reserve and the legal reserve,
respectively, until the sum of the capital reserve and thelegal reserve equals 25% of the common stock account.
Such distributions can be made at any time by resolutionof the shareholders or by the Board of Directors if certain
conditions are met, but neither the capital reserve nor thelegal reserve is available for distributions.
7. Lease Transactions
Finance lease transactions, other than those in which
the ownership of the leased asset is transferred to thelessee that commenced before the first fiscal year inwhich the new accounting standard is applied continue
to be accounted for as operating lease transactions. The
following table shows the amounts which would have beenrecorded as finance leases as of March 31, 2010 and 2011
and for the years then ended:¥ (thousands)
2010
2011
Tools and furniture:
Acquisition cost
Accumulated
depreciation
Net book value
Software:Acquisition cost
Accumulated
depreciation
Net book value¥1,882,666¥1,882,666$ (thousands)
2011(15,775)$ 6,866¥  216,774$ 2,607(108,384)(151,739)¥ (108,389) ¥    65,034(1,825)$   782

Lease obligations includinginterest thereon:
Due within one year¥  421,227
Due over one year
642,797			
Total¥1,064,075¥  423,950
218,847¥  642,797$ 5,098
2,632$ 7,730

Finance lease charges
Depreciation expense
Interest portion¥  426,663
419,887
5,359$ 5,1315,049
64¥  418,839
412,437
7,557

8. Fair Value Measurements for Financial Instruments
1. Basic policies for financial instruments
	The Company limits financial investment toshort-term deposits, and fund raising to borrowings
from banks and others. Because accounts receivable
are subject to counterparty risk from participantsin the book-entry transfer system, the Company
continuously monitors the financial conditions of theparticipants.
2. Estimated fair value of financial instruments
	The following table presents carrying amount on
the balance sheet, fair value and difference between
carrying amount and fair value as of March 31, 2010
and 2011.
For the year ended March 31, 2010
Carrying
amount on thebalance sheet

Notes 1. Methods applied in calculating the above data are as follows:
Depreciation: S traight-line method with zero residual value
over the lease contract period
Interest: C omputed as the difference between the lease obligations and the acquisition cost, allocated over the leaseterm based on the interest rate method.

Fair value

Difference¥ (thousand)$22,641(935,196) (1,311,729)¥  947,469 ¥  570,936¥  216,774

2. Finance lease transactions① Lease assets:	Property and equipment: Backup system hardware
Intangible assets: Back up system software② Depreciation: Based on zero residual value over the lease term

(1) Cash and deposits(2) Accounts
receivable-tradeAllowance for
doubtful accounts*¥ 3,468,876 ¥ 3,468,876
3,318,125(6,480)3,311,644——

3,311,644(3) Designated assets forclearing funds
33,121,473 33,121,473(4) A ccounts payable-trade(823,203)(823,303)(5) Short-termborrowings(4,800,000) (4,800,000)(6) Deposits received forclearing funds(33,121,473) (33,121,473)

—
—
—
—
—

*Allowance for doubtful accounts is deducted from Accounts receivable-trade.
Notes 1. Calculation methods for fair value of financial instruments(1) Cash and deposits, and (2) Accounts receivable-trade	The book value was deemed to be fair value for these items
since the book value approximates fair value because of theshort settlement period.
(4) Accounts payable-trade, and (5) Short-term borrowings
	The book value was deemed to be fair value for these items
since the book value approximates fair value because of theshort settlement period.
(3) Designated assets for clearing funds, and (6) 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.

Japan Securities Depository Center, Inc. Annual Report 201151

2. Investment securities totaling ¥356,179 thousand as of March 31,
2010 are affiliated companies’ stocks for which market quotes
are not available and future cash flow is extremely difficult
to estimate. Accordingly, such Investment securities are notincluded in the above table.

3. Estimated redemptions for monetary claims and securities withmaturities after the end of the consolidated financial period:
All deposits and accounts receivable-trade in the above table
have settlement dates within one year.

For the year ended March 31, 2011
Carrying amount on
the balance sheet(1) Cash and deposits(2) Accounts receivable-tradeA llowance for doubtful accounts *(3) Designated assets for clearing funds(4) Accounts payable-trade(5) Deposits received for clearing funds

Fair value

Difference¥ (thousand)$ (thousand)¥ (thousand)$ (thousand)¥ 4,516,648$ 54,319¥ 4,516,648$ 54,319—

3,443,641

41,415(7,021)84

3,436,620

41,3303,436,620

41,330—33,530,047

403,248

33,530,047

403,248—(769,998)(9,260)(769,998)(9,260)—(33,530,047)(403,248)(33,530,047)(403,248)—* 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 in maintaining a stablesecurities trading environment.
2. Investment securities totaling ¥414,128 thousand ($4,980 thousand) as of March 31, 2011 are affiliated companies’ stocks for which market
quotes are not available and future cash flow is extremely difficult to estimate. Accordingly, such Investment securities are not included in theabove table.
3. Estimated redemptions for monetary claims and securities with maturities after the end of the consolidated financial period:
All deposits and accounts receivable-trade in the above table have settlement dates within one year.

9. Lease Obligations
The Company had ¥40,363 thousand ($485 thousand)long-term lease obligations, and ¥22,789 thousand ($274
thousand) short-term lease obligations. The weighted
average interest rate of lease obligations was 1.4% perannum. Total borrowings by lease obligations were ¥63,152
thousand ($759 thousand) as of March 31, 2011.
10. Allowance for Severance Indemnities for Employees
Allowance for employees’ retirement benefits on March
31, 2010 and 2011 represented the amount that would bepayable by the Company if all eligible employees voluntarily terminated their employment at the balance sheet
dates. Severance costs for employees charged to income
for the years ended March 31, 2010 and 2011 amounted
to ¥102,970 thousand and ¥102,322 thousand ($1,230
thousand), respectively.

52

Japan Securities Depository Center, Inc. Annual Report 2011

11. Loss on Disposal of Fixed Assets
The following table shows disposal of fixed assets:

Buildings andequipments¥ (thousands)
2010
2011

$ (thousands)
2011¥ 32,723¥1,633$20

Tools and furniture

14,5081,367

16Software
Long-term
prepaid expenses

125,594

190

2

5,783

—

—

Total

¥178,610¥3,191$38

12. Income Taxes(1) Deferred tax assets
The following table shows the breakdown of deferred
tax assets:¥ (thousands)
2010
2011
Deferred tax assets:
Accrued business tax ¥      — ¥ 71,133
Allowance for
employees’ bonuses
73,98774,337
Business facility taxes
4,364
4,131
Accrued social
insurance premiums
9,502
10,100Allowance for
doubtful accounts
3,035
888
Allowance for
employees’
retirement benefits
104,229
126,401
Excess amortizationof deferred charges
for tax purposes
4,005
1,657
Allowance for
executives’retirement benefits
16,71012,180
Excess depreciationof fixed assets
666,360
470,774
Sub-total deferred tax assets 882,195
771,605
Valuation allowance(16,710)(12,180)
Total deferred tax assets 865,485
759,425
Deferred tax liabilities:
Enterprise taxes payable
3,375—
Total deferred tax liabilities
3,375—
Net deferred tax assets¥862,109 ¥759,425$(thousands)
2011$  855
894
50
121
11
1,520
20
146
5,662
9,279
(146)
9,133
—
—
$9,133(2) Reconciliation between the nominal statutory income
tax rate and the effective income taxes rate
This disclosure requirement is not applicable because
the difference between the statutory tax rate and theeffective tax rate for the years ended March 31, 2010
and 2011 is less than 5% of the statutory tax rate.

13. Notes to the Consolidated Statements of Changes in Net
Assets(1) Outstanding sharesClass ofshare
OrdinarysharesClass ofshare
OrdinarysharesMarch 31,
2009

Increase

Decrease

March 31,
2010

8,500
March 31,
2010

—

—

Increase

Decrease

8,500
March 31,
2011

8,500

—

—

8,500

(2) Treasury stock
Not applicable.
(3) Stock subscription rights and other securities
Not applicable.
(4) Dividends
1. Payment of the dividends
Total
Amount Dividendper Share Record Effective
Class of Payment
¥
¥
Date
Date
Resolution Share Source (thousands)
Ordinary
GeneralMarch 31, June 22,
Ordinary Retained¥340,000 ¥40,000
Shareholders
2010
2010
Shares Earnings
Meeting(June 21, 2010)

2. D
 ividends for which the record date is in the year ended
March 31, 2011 and for which the effective date is in theyear ending March 31, 2012
Total
Amount Dividendper Share Record Effective
Class of Payment
¥
¥
Date
Date
Resolution Share Source (thousands)
Ordinary¥340,000
General¥40,000 March 31, June 21,
Ordinary Retained($4,088
Shareholders($481)
2011
2011
Shares Earnings
thousand)Meeting(June 20, 2011)

Japan Securities Depository Center, Inc. Annual Report 201153

14. Stock Options
Not applicable
15. Segment Information(1) B usiness segment (From April 1, 2009 to March 31,
2010)
Disclosure is omitted because the Company operates asingle business unit, the book-entry transfer system forsecurities.
(2) G eographic information (From April 1, 2009 to March
31, 2010)
Disclosure is omitted because the Company had
neither overseas consolidated subsidiaries nor overseas
branches.
(3) O verseas sales (From April 1, 2009 to March 31, 2010)
Disclosure is omitted because the Company did nothave any overseas sales for the years ended March 31,
2010.
(4) D
 isclosure and Measurement (From April 1, 2010 toMarch 31, 2011)
The Company has one business segment for Bookentry Transfer of Securities, therefore omitted thesegment information.
(5) E nterprise-wide disclosures (From April 1, 2010 toMarch 31, 2011)① Information by products and services
	The Company omitted segment information because
operating revenues in consolidated statements ofincome and comprehensive income from externalcustomers in one business product exceeded 90%
from April.
② Information about geographic areasi) Operating revenues
Disclosure is omitted because the Company had
no operating revenue from external customers inoverseas.

54

Japan Securities Depository Center, Inc. Annual Report 2011ii) Tangible assets
Disclosure is omitted because the Company had
no tangible assets in overseas.
③ I nformation about major customers
Name of the customers
Japan Securities Clearing Corporation
Amount of Revenue¥2,195,894 (thousands) ($26,408 thousands)
Reportable Segment
Book-entry and Transfer Securities(6) Disclosure of information about impairment loss on
fixed assets in reportable segments (From April 1, 2010
to March 31, 2011)None(7) Disclosure of information about amortization andyear-end balance of goodwill in reportable segments(From April 1, 2010 to March 31, 2011)None(8) Disclosure of information about bargain purchasegain negative goodwill in reportable segments (FromApril 1, 2010 to March 31, 2011)None(9) Supplemental information
From the current fiscal year, the Company has applied
the Revised Accounting Standard for Disclosures about
Segments of an Enterprise and Related information(ASBJ Statement No. 17 revised March 27, 2009),
and its Implementation Guidance (Guidance on the
Accounting Standard for Disclosure No. 20, March 21,2008).

16. Related Party Transactions
The material transactions of the Company with related companies or individuals, excluding transactions with the consolidated
subsidiary that are eliminated in the consolidation and those disclosed elsewhere in these financial statements, for the years
ended March 31, 2010 and 2011 are as follows:
For the year ended March 31, 2010
Related party transactions(1) Subsidiaries and affiliates
Relationship

CapitalNames ofcompanies¥
Address (thousands)

Principal
business

Design &Tosho System Chuo-ku,¥100,000 development ofService Co. Ltd. TokyosoftwareAmountBalance
Percentage Directors(Note 1)at end ofof owner- holding
periodDescriptions
ship with concurrent
Business¥¥voting right positions relationship Transactions (thousands) (Note 2) (thousands)

20%
directly
held

Two

Payment ofcomputer ¥1,830,588 Accounts¥246,133
payable-trade
Purchasing maintenancefee
softwareand system
maintenance Purchase of¥431,170——
softwareNotes 1. The transaction amounts above exclude consumption taxes. However, the end balances include consumption taxes.
2. The terms and conditions of the above transactions are on an arm’s-length basis.

(2)Others
Relationship
CapitalNames ofcompanies¥
Address (thousands)

Principal
business

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

Clearing
securities

Percentage Directorsof owner- holding
ship with concurrent
Businessvoting right positions relationship

—

Three

Amount(Note 1)

Balanceat end ofperiodDescriptions¥¥
Transaction (thousands) (Note 2) (thousands)

Commission Commission¥2,459,261
incomeincomeAccounts
receivabletrade¥293,347

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

Japan Securities Depository Center, Inc. Annual Report 201155

For the year ended March 31, 2011
(1) Subsidiaries and affiliates
Relationship

CapitalNames ofcompanies¥
Address (thousands)

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

Principal
business¥100,000
Design &($1,202 development of
thousands)
softwareAmountBalance
Percentage Directors(Note 1)at end ofof owner- holding
periodDescriptions
ship with concurrent
Business¥¥voting right positions relationship Transactions (thousands) (Note 2) (thousands)

20%
directly
held

Two

Payment of¥173,220¥1,960,369
Accounts
computer($2,083($23,576
payable-trademaintenance
Purchasing
thousands)
thousands)
fee
softwareand system
Current¥26,132
maintenance Purchase of ¥373,488($4,491
liabilities($314
softwarethousands) (Others) thousands)

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

(2) Others
Relationship
CapitalNames ofcompanies¥
Address (thousands)

Principal
business

Japan Securities¥2,600,000
Clearing
Chuo-ku,($31,268
CorporationTokyo
thousands)(Subsidiary ofother affiliates)

Clearing
securities

Percentage Directorsof owner- holding
ship with concurrent
Businessvoting right positions relationship

—

Three

Amount(Note 1)

Balanceat end ofperiodDescriptions¥¥
Transaction (thousands) (Note 2) (thousands)

Commission Commission
incomeincome¥2,195,894($26,408
thousands)

Accounts¥304,962
receivable($3,667
trade
thousands)

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

17. Earnings Per Share
The basis for calculating earnings per share for the years ended March 31, 2010 and 2011 is as follows:

Net income as reported in the consolidated statements of income¥ (thousands)
2010
2011
¥1,317,068¥1,608,911

Net income pertaining to common stock shareholders¥1,317,068¥1,608,911$19,349

8,500

8,500

—

Weighted-average number of common stock shares outstanding (in shares)

56

Japan Securities Depository Center, Inc. Annual Report 2011

$ (thousands)
2011$19,349

Report of Independent Auditors
The Board of Directors and Shareholders ofJapan Securities Depository Center, Inc.
We have audited the accompanying consolidated balance sheets of Japan Securities Depository
Center, Inc. and consolidated subsidiaries as of March 31, 2010 and 2011, and the related consolidated
statements of income and comprehensive income, changes in net assets, and cash flows for the years
then ended, all expressed in yen. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Japan Securities Depository Center, Inc. and consolidated
subsidiaries at March 31, 2010 and 2011, and the consolidated results of their operations and their
cash flows for the years then ended in conformity with accounting principles generally accepted inJapan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect tothe year ended March 31, 2011 are presented solely for convenience. Our audit also included thetranslation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has been
made on the basis described in Note 4.

June 17, 2011

Japan Securities Depository Center, Inc. Annual Report 201157

History

1984

Relevant
Legislation

1985

1991

1992

2000

May 15th
Law Concerning Central Securities
Depository and Book-Entry Transfer ofStock Certificates and Other Securities(CSD Law) was promulgated (effective on
November 14th)

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

2001

2002

June 27th
The Law for Partial Amendments
to the Law Concerning Book-Entry
Transfer of Stock Certificates, etc.
was promulgated(fully effective on April 1st, 2002)

May 27th
JASDEC was designated as
the depository organization
under the CSD Law

Nov. 2nd
Detailed plan for conversionof JASDEC to a joint-stockcompany was announced

Jan. 4th
Japan Securities
Depository Center,
Inc. was established

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

Organization of
JASDEC and
its Subsidiaries

Sept. 10th
Pre-Settlement Matching
System (PSMS) started
Oct. 9th
Oct. 9th
Depository and bookFull-scale depository and bookentry transfer businessentry transfer business started
started (initially for 50
listed stocks on the TSE)

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.

Name of Place

58

Oct. 9th
Computer system for depository and book-entry transfer
began operation

Nov. 26th
Handling of convertible
bonds started

May 8th
New depository andbook-entry transfer
system launched

Environmental protection

May 1stJASDEC launched proprietarysystem for DVP settlement of
exchange trades

Social welfare

JASDEC supported “Suigen Shinrin
Tsukuri,” a movement operated by
Kanagawa Prefecture to maintain thehealth and vitality of forestry around ourwater 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.

P.12-15 Book-Entry Transfer System for
Stocks, etc.

P.16-21 B ook-Entry Transfer System forCommercial Paper and Corporate Bonds

P.22-25 Book-Entry Transfer System for
Investment Trusts

Paris Nord, France

Parc du Champ-de-Mars, France

St. Peter’s Square, Italy

Japan Securities Depository Center, Inc. Annual Report 2011

2003

2004

2005

2006

2007

2008

June 9th
The Law for Partial Amendments to the Law
Concerning Book-entry Transfer of Corporate
Bonds and Other Securities for the Purposeof Streamlining the Settlement for Trades ofStocks and Other Securities (Securities Trade
Settlement Streamlining Law) was promulgated

2009

2010

Jan. 5thThe Securities Trade Settlement
Streamlining Law was enacted

Jan. 10th
JASDEC received official
designation as Book-Entry Transfer
Institution under the stipulationsof the Law Concerning Book-Entry
Transfer of Corporate Bonds, etc.

June 6th
JASDEC DVP Clearing
Corporation (JDCC)
was established

April 6th
JDCC obtained a license for securities
obligation assumption business to act asa securities clearing agency

March 31st
JASDEC inaugurated Short-Term
Corporate Bonds (Commercial
Paper) Book-entry Transfer
System
May 17th
DVP settlement system for
Non-Exchange Transaction
Deliveries (NETDs) started

Jan. 10th
JASDEC inaugurated
Book-entry Transfer System
for Corporate Bonds
Jan. 4th
JASDEC inaugurated Book-entry
Transfer System for Investment
TrustsFeb. 14th
JGB repo and gensaki (transactions
with repurchase agreement) wereadded to the list of targets of PSMS
May 1stJASDEC inaugurated
Custody services for
Foreign Stocks
Jan. 4th
JASDEC launched Securities
Information Tracing System(SITRAS) for lost stocks

Medical careInternational cooperation

Jan. 4th
JASDEC inaugurated
Book-entry Transfer
System for Investment
Trusts listed on thestock exchanges, i.e.
for Exchange-Traded
Funds (ETFs).

Jan. 5th
JASDEC inaugurated
Book-entry Transfer
System for Stocks,
etc.
Jan. 4th
Operations of SITRAS
were terminatedJuly 1st
JASDEC inaugurated
Japanese Depository
Receipts in Bookentry Transfer System
for Stocks, etc.

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 organizationthat primarily provides emergency
medical care to people in distress.

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 awareness ofother reasons, have insufficient funding.

P.26-29 DVP Settlement System for NETDs

P.30-33 Pre-Settlement Matching System(PSMS)

P.34-37 Custody Services for Foreign
Stock Certificates, etc.

P.38-41 International Relationships

Cloverleaf Interchange, U.S.A.

Galleria Vittorio Emanuele II, Italy

Suburban housing, U.S.A.

Melbourne Airport, Australia

Japan Securities Depository Center, Inc. Annual Report 201159

Corporate Data(as of March 31, 2011)

Profile of the company
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 (as of June 20, 2011)

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

208

Board Members and Auditors (As of July 1, 2011)
Chairman

Yoshinobu Takeuchi

President & CEO

Haruhiko Kato

President, JASDEC DVP Clearing Corporation

Managing Director

Seikichi Ihara

Managing Director, JASDEC DVP Clearing Corporation

Managing Director

Yoshinori Seyama

Managing Director, JASDEC DVP Clearing Corporation

Managing Director

Munetaka Saito

Managing Director, JASDEC DVP Clearing Corporation

DirectorMoriyuki Iwanaga

Executive Officer, Tokyo Stock Exchange, Inc.

Director

Masakazu Kubota

Senior Managing Director, Japan Business Federation

Director

Ritsuro Koza

Director

Masahiko Koyanagi

Executive Director, Japan Securities Dealers Association

Director

Masaru Takei

Executive Vice President, Tokyo Electric Power Company

Director

Yasushi Tachihara

Executive Officer, SMBC Nikko Securities Inc.

Director

Ayumi Tomoda

Operations Head, Citigroup Global Markets Japan Inc.

Director

Masahisa Nakagawa

Senior Managing Director,
Daiwa Securities Capital Markets Co. Ltd.

Director

Kunihisa Hama
LawyerDirector

Masayuki Hoshi

Managing Executive Officer, Mizuho Corporate Bank, Ltd.

Senior Managing Director, Nomura Securities Co., Ltd.

Director

Shigeyuki Maeda

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

Director

Kanetsugu Mike

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

Director

Hiroshi Misawa

Senior Executive Officer,
Chuo Mitsui Asset Trust and Banking Company, Limited

Director

Akira Moriwaki

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

Standing Auditor

Hiroshi Kitta

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

AuditorJun Ohta

Director and General Manager,
Sumitomo Mitsui Banking Corporation

AuditorMasahiko Kawaguchi

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

60

Japan Securities Depository Center, Inc. Annual Report 2011

Major shareholders

SharesTotal shares approved for issue

10,000Total issued shares

8,500

Paid-in capital¥4,250,000,000

Shareholders

155

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

Number ofshares held

Stake inCompany (%)

1,928
1,049
485
425
425
424
321
320
284
230

22.68
12.34
5.70
5.00
5.00
4.98
3.77
3.76
3.34
2.70

Organization structure
Meeting of Shareholders
Board of Auditors
Auditors Office
Board of Directors
President & CEO
Compliance Office
General Administration Department
Corporate Planning Department
Equity Department
Shareholders Notification Office
Fixed Income and Investment Trust Department
International Department
Post–trade Services Department
Information Services Department
First Systems Department
Second Systems Department

Japan Securities Depository Center, Inc. Annual Report 201161