Mondo Visione Worldwide Financial Markets Intelligence

FTSE Mondo Visione Exchanges Index:

System Adjustments Accompanying The Commencement Of Handling Of Foreign Stock, Etc. By Japan Securities Depository Center, Inc.

Date 24/01/2006

1. Concept

With the commencement of transfer and settlement by the Japan Securities Depository Center, Inc. (below JASDEC) of foreign stocks, foreign subscription warrants, foreign investment trust beneficiary certificates, and depository receipts (below foreign stocks, etc.), TSE foreign stock transfer and settlement system will be abolished, and the necessary adjustments will be made to the listing system relevant to foreign stocks, etc. and to the settlement method for clients.
- Currently, foreign stocks, etc. are handled through the book-entry transfer and settlement system for foreign stocks operated by the Japan Securities Settlement & Custody, Inc., through assignment by TSE.

2. Outline

(1) Listing system
a) Transfer and settlement by JASDEC of foreign stocks will be a new listing / continuing listing condition for foreign stocks, etc.
b) Listed foreign companies will be required to ensure that services for beneficial shareholders such as Japanese language notifications, etc. and dividend payments are properly provided to beneficial shareholders.
- Designation and contract pertaining to institutions that will handle shareholder services and dividend payment services are to be set forth by JASDEC.

(2) Method for settlement by clients, etc.
a) Settlement of foreign stocks, etc. between trading participants and clients will be performed by account transfer according to the rules set forth by JASDEC.
- Settlements between clearing participants involved in exchange transactions will also be performed by JASDEC.
b) Obligation for clients to deposit foreign stocks, etc. in advance of placing a sell order will be eliminated.
- In consideration of developments in eliminating paper and advances in matching services, systematic obligations for advance deposit of foreign stocks, etc. will not be set in place, similar to domestic products.
c) Necessary adjustments will be made to the clause pertaining to foreign securities trading accounts with the change in settlement organization.
- These systematic adjustments are not anticipated to have any particular influence on the reference forms of the agreement pertaining to foreign securities trading account set forth by the Japan Securities Dealers Association.

3. Timeframe

a) Implementation is planned for April, 2006
- The specific implementation date will be determined in the future taking into consideration the status of adaptation by JASDEC and other relevant institutions.
b) Phased transfer on a country-by-country basis is assumed, and necessary transitional measures will be taken.

* TSE is asking for public comment on this plan until February 7.