Expectations that legislation to complete the dematerialisation of stocks in Japan would be passed by the Diet in the current parliamentary session may be disappointed.
Indications were that the Cabinet would submit a bill to amend the relevant parts of the Commercial Code, and the law concerning book-entry transfer of corporate debt, but the dissolution of the House of Representatives (the Lower House) and the recent elections have resulted in the closure of the parliament yesterday. It will take an extraordinary session to be convened before the legislation can be submitted. If so, the necessary legislation may be in place by 1 April 2004.
“If no extraordinary session is to be convened within 2003, however, the submission of the bill would be postponed until an ordinary Diet session will start in January 2004,” says a spokesman for Sumitomo Mitsui Banking Corporation in Tokyo. “In this case, the enforcement of the bill would be delayed and would be somewhat later than April 2004.”
The legislation as currently drafted would make dematerialization of stocks eligible for deposit in JASDEC mandatory within five years. The law concerning book-entry of corporate debt securities simply brings paperless debt instruments within the scope of the law. The present laws regulating JASDEC have also to be abolished, and replaced by new laws covering its intended expansion into new areas.