Japanese Government Bonds

Japanese Government Bond (JGB) transactions are confirmed and matched through the pre-settlement matching system of the Japan Securities Depository Center, Inc. (JASDEC). As central counterparties, JGB Clearing Corporation (JGCC) and Japan Securities Clearing Corporation (JSCC) guarantee settlement of each transaction for over-the-counter (OTC) trading and exchange-traded JGBs, respectively.

The Bank of Japan (BOJ) provides securities depository and securities settlement services. JGB registration and JGB book-entry systems are used for JGB settlements. JGB transfers are processed online using BOJ-NET JGB Services. Payments of interest and redemptions are also processed by BOJ-NET.

Real-time gross settlement (RTGS) is used for transfers through BOJ’s current accounts on BOJ-NET. RTGS and delivery-versus-payment systems ensure that both securities and fund transfers occur on a real-time gross basis by connecting BOJ-NET JGB services with the BOJ-NET funds transfer system.

Corporate Bonds

Corporate, municipal, and government-guaranteed bonds are settled at registrar banks using the online network system operated by the Japan Bond Settlement Network Co., Ltd. (JBNet). JBNet was established to improve the system of delivery and settlement of registered corporate bonds.

In response to new legislation enabling the dematerialization of corporate bonds, JASDEC began using a book-entry transfer system for corporate bonds in January 2006. Transactions in corporate and other bonds are confirmed and matched by the JASDEC pre-settlement matching system, and automatically transmitted to the book-entry transfer system, which also introduced real-time delivery-versus-payment by linking deliveries of securities at JASDEC with transfers of funds at BOJ (BOJ-NET Funds Transfer System).