The Japanese Ministry of Finance has released a paper on the introduction of a new trading system for Japanese Government Bonds. It reads as follows:
Paperless trading of JGBs will commence from January 2003. For this purpose, a new book-entry transfer system will be adopted. Under the new system, JGBs will be traded by entering them into the books maintained at financial institutions. The new book-entry transfer system has the following advantages:
1. The law clearly prescribes that JGB transactions, including sale and purchase, shall be effected by entering the JGBs into the books maintained at financial institutions under the new book-entry transfer system.
2. Moreover, by making the transactions paperless, the new book-entry transfer system will eliminate the loss and forgery of JGB certificates. In addition, this system will facilitate the speed and efficiency of transactions and clarify the transaction relationships of JGBs.
We kindly request holders of JGBs to convert them to the “book-entry transfer JGBs”.
With the adoption of the new book-entry transfer system, the current de facto book-entry transfer system entailing the deposit of JGB certificates with financial institutions, will cease being operative. However, JGBs held under the current book-entry transfer system can be converted to JGBs traded under the new book-entry system (referred to as the “book-entry transfer JGBs”).
Please inquire about the procedures for conversion to the book-entry transfer JGBs with the financial institutions where your JGB certificates are currently deposited.