Regulations Concerning Securities in Lieu of Cash for Guarantee Deposits

Transcription

1 Regulations Concerning Securities in Lieu of Cash for Guarantee Deposits (As of January 1, 2013) The classes of securities that Transaction Participants may deposit with the OSE in lieu of guarantee deposits pursuant to Rule 11, Paragraph 2 of the Regulations for Transaction Participants and their substitution value shall be as stipulated in the appended schedule. 1

2 Appendix Schedule of Classes of Securities in Lieu of Cash for Guarantee Deposits and their Substitution Value 1. The substitution value of securities shall be the amount of the market value of said securities on the day 2 days before the deposit date (or, in the event that this falls on a holiday, the preceding day) multiplied by a percentage stipulated by the OSE, provided, however, that the OSE may change the substitution value pursuant to Rule 11, Paragraph 3, Item 2 of the Regulations for Transaction Participants. 2. The classes of securities, market values and percentages stipulated by the OSE referred to in the preceding paragraph shall be as follows. Type of Securities Market Value Assessed collateral rate of Market Value Government bonds published by the Japan Securities Dealers Association (JASDA) values (1) Government bonds (excluding floating rate government bonds, separate principal trading government bonds, and separate interest trading government bonds) a. Remaining period of 1 year or less: 99/100 b. Remaining period of 1 to 5 years: 99/100 c. Remaining period of 5 to 10 years: 97/100 d. Remaining period of 10 to 20 years: 97/100 e. Remaining period of 20 to 30 years: 95/100 f. Remaining period of more than 30 years: 95/100 (2) Floating rate government bonds a. Remaining period of 1 year or less: 98/100 b. Remaining period of 1 to 5 years: 98/100 c. Remaining period of 5 to 10 years: 96/100 d. Remaining period of 10 to 20 years: 96/100. (3) Separate principal trading government bonds, and separate interest trading government bonds a. Remaining period of 1 year or less: 98/100 b. Remaining period of 1 to 5 years: 98/100 c. Remaining period of 5 to 10 years: 96/100 d. Remaining period of 10 to 20 years: 96/100 e. Remaining period of 20 to 30 years: 93/100 f. Remaining period of more than 30 years: 92/100 2

3 Government-guara nteed bonds Yen-denominated bonds defined by Rule 2.11 of the Enforcement Order for the Financial Products Exchange Act (Note 3) published by the JASDA. values (1) Remaining period of 1 year or less: 98/100 (2) Remaining period of 1 to 5 years: 98/100 (3) Remaining period of 5 to 10 years: 96/100 (4) Remaining period of 10 to 20 years: 96/100 94/100 94/100 US treasury securities Final quotation in the New York market on the previous day (1) Remaining period of 1 year or less: 85/100 (2) Remaining period of 1 to 5 years: 85/100 (3) Remaining period of 5 to 10 years: 85/100 (4) Remaining period of 10 to 20 years: 84/100 83/100 83/100 Municipal bonds (Note 3) Special bonds (except government-guaran teed bonds) (Note 4) published by the JASDA. published by the JSDA values values (1) Remaining period of 1 year or less: 98/100 (2) Remaining period of 1 to 5 years: 98/100 (3) Remaining period of 5 to 10 years: 96/100 (4) Remaining period of 10 to 20 years: 96/100 94/100 94/100 (1) Remaining period of 1 year or less: 97/100 (2) Remaining period of 1 to 5 years: 97/100 (3) Remaining period of 5 to 10 years: 95/100 (4) Remaining period of 10 to 20 years: 95/100 3

4 Corporate bonds (except corporate bonds with subscription to new shares or exchangable bond) (Note 3)(Note 4) instruments exchange. instruments exchange 93/100 93/100 Yen-denominated foreign bonds (except the Yen-denominated bonds defined by Article 2.11 of the Enforcement Order for the Financial Instruments and Exchange Act, convertible bond and exchangeable corporate bonds) (Note 3) (Note 4) published by the JSDA instruments exchange. values (1) Remaining period of 1 year or less: 83/100 (2) Remaining period of 1 to 5 years: 83/100 (3) Remaining period of 5 to 10 years: 81/100 (4)Remaining period of 10 to 20 years: 81/100 instruments exchange 79/100 79/100 certificate of a bond investment trust Market value of the previous day published by the Investment Trust Association of Japan. Published market value 85/100 Convertible bonds (Note 3)(Note 5) Exchangeable corporate bonds (Note 3)(Note 6) Listed on a domestic financial instruments exchange. instruments exchange 80/100 4

5 Stock Preferred equity investment securities Foreign depositary receipts securities of foreign investment trusts Foreign investment securities Listed on a domestic financial products exchange. 70/100 securities of beneficiary securities issuing trusts securities of foreign beneficiary securities issuing trusts certificate of an investment trust Listed on a domestic financial products exchange. (except the beneficiary certificates of a bond investment trust) Market value of the previous day published by the Investment Trust Association of Japan. Published market value 70/100 Investment securities 5

6 Notes: 1. For issues listed on multiple financial instruments exchanges, this shall be a financial instruments exchange selected in the order stipulated by the OSE. 2. If said financial instruments exchange publishes quoted prices, the closing price means the last quoted price. 3. Limited to those in which the underwriting contract on issue was concluded by a financial products dealer (limited to those that have received business registration in relation to the activities listed in Rule 28, Paragraph 1, Item 1 of the Law). 4. Special bonds (excluding government backed bonds), corporate bonds (excluding bonds with subscription right to new shares and exchangeable bonds), and Yen denominated foreign bonds (excluding Yen denominated bonds as stipulated in Rule 2-11 of the Financial Instruments and Exchange Law Enforcement Regulations (Cabinet Order No. 321, 1965), convertible bonds with subscription rights to new shares and exchangeable bonds) shall be limited to those deemed eligible by the OSE, considering the credit worthiness of the issuers and other circumstances; for instance, credit ratings obtained from qualified credit rating institutions (meaning designated institutions stipulated in Paragraph 13-2, Article 1 of the Cabinet Office Ordinance on Disclosure of Company Information (Finance Ministry Ordinance No. 5, 1973) are all equivalent to grade A or above. 5. Convertible bonds with subscription rights to new shares (meaning convertible bonds with subscription rights to new shares pursuant to Rule 2, Paragraph 1, Item 2 of the Business Regulations) shall be limited to stocks issued by companies listed on domestic financial instruments exchanges. 6. Exchangeable bonds means corporate bonds (including those issued by foreign legal entities) that are redeemed by means of stocks of a specified company other than the issuer requested by the holder. 7. Preferred equity securities means preferred equity securities issued by cooperative financial institutions. 8. Foreign Stock Depositary Receipt means a certificate representing ownership in equity issued by a foreign publicly listed company. 9. Certificate of Foreign Certificate Issuing Trust means a security or certificate issued by a foreign publicly listed company with the quality of a beneficiary certificate of a beneficiary certificate issuing trust. 3. In the order stipulated by the OSE referred to in the provisions of the preceding paragraph 6

7 the OSE shall be first, followed by other financial instruments exchanges in the order of their exchange or industry association codes (meaning the code stipulated by the Securities Identification Code Committee), provided, however, that for government bonds, the order shall be the order of their exchange or industry association codes. 4. Fraction amounts in substitution values shall be adjusted as follows. (1)Fraction amounts of less than 1 Yen relating to stocks, preferred equity securities, foreign stock depositary receipts, investment trust beneficiary certificates, foreign investment trust beneficiary certificates, beneficiary certificates of beneficiary certificate issuing trusts or beneficiary certificates of foreign beneficiary certificate issuing trusts shall be rounded down. (2)Fraction amounts of less than one Sen relating to securities other than those provided in the preceding item shall be rounded down. 5. In the event that a Transaction Participant deposits government bonds as provided in Paragraph 2 with the OSE, said deposit shall be made by means of a transfer to an account in the name of the OSE held at the Bank of Japan in accordance with the Act on Book-Entry Transfer of Corporate Bonds and Shares (Law No. 75 of 2001; hereinafter referred to as the Transfer Act ). 6. In the event that a Transaction Participant deposits any of the securities listed in the following items with the OSE, said deposit shall be made by means of a transfer to an account in the name of the OSE opened by the Japan Securities Depository Center (hereinafter referred to as the JASDEC ), in accordance with the Transfer Act. (1)Stocks, preferred equity securities, foreign stock depositary receipts, investment trust beneficiary certificates, foreign investment securities, beneficiary certificates of beneficiary certificate issuing trusts or beneficiary certificates of foreign beneficiary certificate issuing trusts, bonds (excluding government bonds and bonds with subscription right to new shares), and convertible bond with subscription right to new shares (2)Investment securities that are listed on domestic financial instruments exchanges. 7. The OSE shall delegate the reporting for deposited securities with the JASDEC described in the following items to a Transaction Participant which deposits such securities, and such delegated Transaction Participant shall perform such reporting with the JASDEC. In this 7

8 case, such delegated Transaction Participant may have other parties perform such reporting on their behalf. (1) Status report on the entrustment of administration for special shareholders pertaining to stocks issued by domestic corporations (2) Status report on the entrustment of administration for special shareholders pertaining to preferred equity securities (3) Status report on the entrustment of administration for special shareholders pertaining to investment trust beneficiary certificates (4) Status report on the entrustment of administration for special shareholders pertaining to investment securities (5) Status report on the entrustment of administration for special shareholders pertaining to beneficiary certificates of beneficiary certificate issuing trusts 8. In the event that a Transaction Participant is to deposit treasury bonds in the United States of America as stipulated by the Paragraph 2 to OSE, the said Transaction Participant shall obtain an approval of OSE in each case. 9. In the event that a Transaction Participant is to deposit treasury bonds under the provisions of the preceding paragraph, said Transaction Participant shall transfer the treasury bonds to be deposited to an account in the name of the OSE established at a bank located in New York City in the State of New York in the United States of America for the purpose of holding treasury bonds no later than 2:00 pm, United States of America Eastern Standard Time on the day before the deposit date, and shall so inform the OSE no later than 4:00 pm on the day of said book-entry transfer. In such cases, book-entry transfers (excluding book-entry transfers within the same bank) shall be made through the Federal Reserve Communications System of the United States of America. 10. In the event that a Transaction Participant requires treasury bonds deposited as securities in lieu of cash to be refunded, said clearing participant shall so inform the OSE no later than midday on desired day of said refund. 11. Notwithstanding the provisions of Paragraph 2, in the event that stocks (including preferred equity securities, foreign stock depositary receipts, investment trust beneficiary certificates, foreign investment trust beneficiary certificates, investment securities, foreign investment securities, beneficiary certificates of beneficiary certificate issuing 8

9 trusts and beneficiary certificates of foreign beneficiary certificate issuing trusts; the same hereafter in this paragraph and the following paragraph) listed on domestic exchanges meet the criteria for delisting from all of the domestic derivatives exchanges on which they are listed as stipulated by said derivatives exchanges (except in the cases listed in the following items), said stocks and corporate bonds issued by the issuer of said stocks (excluding said foreign stock depositary receipts, investment trust beneficiary certificates, foreign investment trust beneficiary certificates, beneficiary certificates of beneficiary certificate issuing trusts and beneficiary certificates of foreign beneficiary certificate issuing trusts ) shall be excluded from securities in lieu of cash from the day following the day on which they meet said criteria (or, if this falls on a holiday, the following day and the same hereinafter). (1) Cases in which the issuer of said stocks becomes, by means of a share swap or share transfer, a wholly-owned subsidiary of a company listed on a domestic stock exchange (2) Cases in which the issuer of said stocks is taken over by a company listed on a domestic stock exchange (3) Other cases in which said stocks are delisted and the stocks issued in redemption of said stocks are expected to be listed on a domestic derivatives exchange at the earliest opportunity 12. Stocks submitted to the OSE by Transaction Participants as a substitute for guarantee deposits shall be limited to stocks in the name of said Transaction Participant (or, in the event that stocks handled by the transfer business of the Japan Securities Depository Center are submitted by transferring between JASDEC accounts, said Transaction Participant s proprietary portion). 13. The provisions of the Paragraph 11 shall apply mutatis mutandis to bonds regarding which the issuer of said bonds loses benefit of term for said bonds. 9