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.
