Market Link Guide – Japan – JGBs
Key features
CSD link as defined under CSDRa | Yes |
Type of link | Indirect via Hongkong and Shanghai Banking Corporation Limited (Tokyo Branch) to Bank of Japan |
a. CSD Regulation (EU) No 909/2014, Article 2(29).
CSD | Custodian | |
Name | Bank of Japan (BOJ) | Hongkong and Shanghai Banking Corporation Limited (HSBC), Tokyo branch |
FATCA GIIN | Not available | 4RI52Y.00000.BR.392 |
LEI | 353800717BLAHZMEXR15 | 2HI3YI5320L3RW6NJ957 |
Country of incorporation | Japan | Hong Kong via its branch in Tokyo |
Account type | Dedicated omnibus account for CBL’s assets held at BOJ, under HSBC’s participant status | Omnibus |
Legal Account name/holder | The Hongkong and Shanghai Banking Corporation Limited - 0411-7111 | Clearstream Banking S.A. |
Operational arrangements
| Yes/No | Remarks | |
| Settlement free of payment | Yes | |
| Settlement against payment | Yes | Eligible settlement currency: Japanese Yen (JPY). |
| Settlement against payment in central bank money account of CBL/CBL clients | No | CBL holds a cash account at the custodian. Against payment settlement in JPY takes place on the cash account of the custodian at the Bank of Japan. |
| Bridge settlement | No | |
| Shaping facility | No | |
| Partial settlement | No | |
| Settlement penalty fees | Yes | Refer to the Market Profile. |
| Pre-matching | Yes | |
| Back-to-back processing | Yes | |
| Allegements | Yes | |
| Automatic compensation | No | |
| Registered securities | No | |
| Multi-Market Securities | Yes | Refer to the Multi Market-Securities Guide. |
| Lending and borrowing | No | |
| Proxy voting | No | |
| Investment Funds | No | |
| Liquidity Hub Connect | No | |
| Sale and purchase of rights | No | |
| Repo services | Yes | CBL internal settlement. |
| Market restrictions | Yes | Refer to Investment Regulation. |
| FTT | No | |
| Daily reconciliation | Yes |
Moment of entry of instructions | The rules of BOJ do not define the moment of entry within the meaning of the Settlement Finality Directive. |
Irrevocability of instructions | JGBs are settled under Real Time Gross Settlement (RTGS), which is true DVP. Transfer of JGBs cannot be cancelled once transfer instructions are settled through book-entry system for JGBs, regardless DVP or non-DVP mode. |
Finality of instructions | The attribution of rights to the JGBs is final when it is entered or recorded in the transfer account ledgers. |
Local legislation
The below section is valid on the date of the legal opinions that were issued and might be subject to change. The information is provided for guidance only and should not be considered in isolation or as constituting a complete or definitive legal advice on any specific matter. The scope of the legal opinions is limited to the local legislation applicable to the relevant CSD (and intermediary, if any). For links using an intermediary located in another jurisdiction, please find a separate Local legislation section for the jurisdiction of the intermediary below. For clients accessing local markets via other Clearstream entities, please also review the Local legislation section in the relevant Market Link Guide for such Clearstream entity.
Local legislation of the CSD/Intermediary | |
Date of legal opinion | 15 June 2024 |
Nature of rights on securities | Substantive law of the jurisdiction will govern the nature of the rights on the securities. Rights on the Securities are of other nature/type (chose in action, right to provide instructions to CSD on behalf of Clients, co-ownership rights, trustee rights, sui generis rights, etc.). Counsel noted differences in conclusions in case of sub-accounts for Clients within the Direct CSD Account. |
Recognition of nominee concept | Nominee concept not expressly recognised under local law, but possible to hold assets in name of another entity. |
No right of retention to the CSD under local law | CSD does not have a lien or similar encumbrances on the securities under local law. |
No upper-tier attachments | Securities would not be subject to attachment. |
No right of use without prior consent | Use not restricted under local law, but contractual restriction would be enforceable. |
Segregation of assets at the CSD | CSD is under legal/regulatory obligation to segregate the securities held for each participant. |
Loss of assets | No general restrictions on ability to recover lost assets or on indemnification under local law. |
Ability to recover client assets in the event of insolvency of CSD | Securities would be recoverable. |
Ability to recover client assets in the event of insolvency of Agent | Securities would be recoverable in the event of insolvency of the Subcustodian. Claim to cash as a general creditor in case of insolvency of the Subcustodian. |
Shortfall pro-rated among holders | Shortfall in the securities would be allocated among the holders of the applicable securities pro rata to their respective ownership percentages. |
Settlement finality in case of insolvency | No provisions on settlement finality under local law. |