Japanese Corporate and Municipal bonds service
CBL accepts only tax-exempt eligible beneficial owners for corporate and municipal bonds.
The following CBL clients are eligible for the Clearstream Banking Corporate and Municipal bonds service:
- Non-resident investors acting as intermediaries;
- Non-resident investors holding proprietary positions;
- Designated Financial Institutions (DFI) licensed by the FSA holding proprietary positions.
All intermediaries in the custody chain are required to have the Foreign Indirect Account Management Institution (FIAMI) status for corporate bonds obtained from JASDEC. The last financial institution in the custody chain with which the final beneficial owner has the account with must, in addition to the FIAMI status, also have obtained the QFI statuses for corporate bonds from the National Tax Agency (NTA) Commissioner via JASDEC. CBL and CBF have already obtained FIAMI status and QFI status required to hold tax-exempt corporate/municipal bonds.
Intermediaries must request FIAMI status for corporate bonds and QFI status for corporate bonds through CBL and CBL's subcustodian HSBC, even if the status has already been obtained through another subcustodian.
Settlement process
Japanese corporate and municipal bonds settle on a T+2 cycle. Internal and external settlements are allowed, but the securities are currently not eligible for Bridge transactions with Euroclear Bank.
Account opening requirements
Clients who want to make their account eligible for the service should follow the procedure found in the Market Taxation Guide - Japan under the section Japanese corporate bonds - rates, eligibility, availability of relief etc for details on the required documents.
An “End Investor Registration Number” will be allocated and sent to the client via Swift message. If a Registration Number was previously provided for Japanese Government Bonds (JGBs), a new number for corporate bonds will not be provided.
Change in client details
Where there is any change in the address, registered address or name of the bond holder, the client must provide the completed and signed “Application Form for Amendment” or “Notification Form for Amendment” (for Partnership or Trust only).
Intermediary clients are also reminded to notify Clearstream Banking Tax Helpdesk immediately if there are any changes to the client's address, name, representatives or any other relevant information already reported to grant AMI, FIAMI and QFI statuses as soon as the change occurs.
Blocking of positions before interest payment date
Interest payment entitlements are based on positions as at record date, which is normally one day before the payment date (PD-1). This is also known as frozen period and positions are non-transferable during the frozen period (that is one business day before the record date) and will be blocked at HSBC.
Transferring holdings to CBL
When preparing an asset/portfolio transfer, clients must, before the transfer occurs, advise CBL that they are appointing CBL as a Designated Participant, as follows:
Clients transferring proprietary holdings
Submit the Application Form, which should be certified by CBL as the new QFI. Please note that eligibility of tax exemption should be confirmed by the relevant QFI in the custody chain respectively.
Clients transferring third-party holdings
- The client must notify CBL of the intended change and complete an application process to obtain another approval as a FIAMI under CBL through HSBC on book-entry system for Corporate Bonds from JASDEC.
- Submit the application form, which should be certified by the client as the QFI, through CBL to the local tax office via HSBC.
Beneficial Owner Disclosure Requirement
Under the Special Taxation Measures Law, clients considered as beneficial owners are required to be disclosed by CBL to the local tax authorities through our depository. Specific consent is hereby granted to CBL by clients holding Japanese corporate and municipal bonds to disclose client information in accordance with this clause.