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Updates of Activities from CSDs in Asia-Pacific Region

Updates of Activities from CSDs in Asia-Pacific Region. 7th Meeting of AMEDA Mauritius May 23, 2008 Yoshinobu Takeuchi President & CEO Japan Securities Depository Center, Inc. Asia-Pacific CSD Group. Profile Name: Asia-Pacific Central Securities Depository Group (ACG)

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Updates of Activities from CSDs in Asia-Pacific Region

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  1. Updates of Activitiesfrom CSDs in Asia-Pacific Region 7th Meeting of AMEDA Mauritius May 23, 2008 Yoshinobu Takeuchi President & CEO Japan Securities Depository Center, Inc.

  2. Asia-Pacific CSD Group • Profile • Name: Asia-Pacific Central Securities Depository Group (ACG) • Date of establishment: November 1997 • No. of members: 30 • Objectives: to facilitate the exchange of information and to promote mutual assistance among member securities depositories and clearing organizations in the Asia Pacific region.

  3. Asia-Pacific CSD Group (cont.) - ACG Member List -

  4. Asia-Pacific CSD Group (cont.) • Activities • General Meeting • The 11th General Meeting was held on Sept. 2007 in Beijing, China, hosted by SD&C. • Next General Meeting will be held on 9-11th of November 2008 in Singapore, hosted by CDP(SGX). • Task Forces • Information Exchange Task Force • New Business Task Force • Risk Management Task Force • Technical Task Force • Cross Training Seminar • Next Cross Training Seminar will be held on 1-5 June 2008 in Bali, Indonesia under the theme “STP”.

  5. CSD Interim Meeting • Date and Place • April 16, 2008, Tokyo • Attendees • 26 people from 16 CSDs in 5 regional CSD groups • Objectives • To promote interactions among CSDs • To exchange views and opinions in a rapidly changing environments surrounding CSDs in the world • Based on the above thoughts, the meeting was proposed by JASDEC at “Top Management Meeting” in CSD9.

  6. CSD Interim Meeting (cont.) • Agenda • Updates from regional CSD groups • 5 regional group made presentation about the developments of each CSD group’s activities. • CSD 10 (Budapest) updates • KELER (Hungary) presented a current draft programs of CSD10 for review by attendees. • Breakout session • Members were divided into two groups and discussed the following topics • Cross-border settlement & Corporate action processing • Disclosure Framework

  7. CSD Interim Meeting (cont.) • Agenda • World CSD Group • Assessment of CSD meetings in the past • Holding of CSD Interim Meeting • World CSD Meeting / World CSD Group • Specific Topics for discussion • Disclosure framework • Consultative committee of CSD meeting • Delivering message from worldwide CSDs • Attendees identified specific area for cooperative work • Disclosure framework • Consultation for CSD meeting

  8. Worldwide Activities of CSDs • Current Environments • Importance of capital markets as a key driver for economic growth • Complexity of capital markets & financial instruments leads to the need for CSDs to provide value added services • Globalization of capital markets needs closer relationship among market infrastructures in the world • What is the next step?

  9. Dematerialization of Stocks, etc in Japan

  10. Reform of Securities Settlement System • Significance of the Reform • The reform started in June 2000 after the Financial System Council published a report about reform of the financial system - Demutualization of CSDs - Unified legal system - Introduction of paperless system - STP & DVP Reform of Japanese securities settlement system

  11. Purpose of the Reform DVP The principal risk has been eliminated. • DVP for street-side and customer-side transactions. • The issuance of new stocks. Key Points STP from trade matching to settlement was devised. STP • The introduction of PSMS.(Pre-Settlement Matching System) Paperless As the final stage of the paperless scheme, the dematerialization of stocks is underway. • Introduction of Paperless • System. • - Government Bonds • - Commercial Paper • - Corporate Bonds • Investment Trusts • ETFs

  12. Paperless System for Stocks • For Shareholders: • Lowers the risks of lost or stolen share • certificates. • Eliminates the need for • - delivery of physical certificates • - physical registration of shareholders’ name • -exchange of share certificates in case of • corporate reorganization Enhancement of STP Benefits Mitigation of risks • For Issuers: • Reduces the costs related to the • issuance of stocks and handling of • shareholders’ matters. • For Securities Companies: • Eliminates the need for delivery of • physical certificates.

  13. Transition to Paperless system • No specific procedures are necessary. • Shares are transformed into • dematerialized form automatically. • - Holders will be able to trade shares from • the enforcement date. Shares with JASDEC • Shares are transferred to a “Special account” at the time of enforcement date. • In case the shareholders want to sell such shares, certain procedures need to be taken. Shares outside JASDEC

  14. Challenges for post-paperless • Enhancement of international competitiveness of Tokyo financial markets • Response to international standardization • Expansion of business scope of CSDs • Strengthening cooperative relationship with overseas CSDs • Exchange of information regarding the markets in electronic means

  15. Thank you for your attention.

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