Overview (TPBM)
The TOKYO PRO-BOND Market, a new bond market for professional investors, is based on the “professional markets system” incorporated into the Financial Instruments and Exchange Act in 2008. Only specified investors and non–residents of Japan are eligible for purchasing securities listed on PRO-BOND. The current bond market targets institutional investors with the exception of a minority of corporate bonds issued for individual investors. The TOKYO PRO-BOND Market allows almost all of those who are currently investing in the bond market to participate. Overseas investors will benefit from a tax exemption for bond holdings for non-residents of Japan that was introduced in 2010.
Definition of Specified Investors under the Financial Instruments and Exchange Act (FIEA)
■ Specified Investors (Not Eligible to Be Treated as General Investors)
- Qualified Institutional Investors (QIIs)
- Japanese Government
- The Bank of Japan
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Specified Investors (Eligible to Be Treated as General Investors)
- Corporations established pursuant to a special law by a special act of establishment
- Investor Protection Fund
- Deposit Insurance Corporation of Japan
- Agricultural and Fishery Cooperative Savings Insurance Corporation
- Specified Purpose Companies (SPCs)
- Companies issuing shares listed on a Financial Instruments Exchange
- Stock companies reasonably expected to have stated capital of JPY 500 million or more
- Corporations that are Financial Instruments Business Operators or Special Business Notifiers
- Foreign corporations
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General Investors (Eligible to Be Treated as Professional Investors)
- Corporations other than Specified Investors
- Individuals meeting certain requirements
Note: Scope of Individuals Meeting Certain Requirements
The individual must have more than one year of experience with the relevant type of transaction and satisfy one of the following conditions:
①Net assets of at least JPY 300 million and investment financial assets of at least JPY 300 million.
②Annual income of at least JPY 100 million.
③Annual income of at least JPY 10 million and specified knowledge and experience.
④Investment financial assets of at least JPY 500 million.
⑤Investment financial assets of at least JPY 300 million and a transaction frequency of at least once per year.
⑥Investment financial assets of at least JPY 100 million and specified knowledge and experience.
⑦Net assets of at least JPY 500 million.
⑧Net assets of at least JPY 300 million and a transaction frequency of at least once per year.
⑨Net assets of at least JPY 100 million and specified knowledge and experience.
When soliciting purchases by specified investors of a bond issue to be listed on the TOKYO PRO-BOND Market, in principle, “limited transfer contracts”(1) between the issuing entity and the investor and (2) between the securities company and the investor are required. With regards to OTC (off-Exchange) trading of bond issues listed on the TOKYO PRO-BOND Market, solicitations, etc., for sales to specified investors which are accompanied by a “limited transfer contract” between the soliciting party and the investor are required.
When soliciting purchases by specified investors of a bond issue to be listed on the TOKYO PRO-BOND Market, the party conducting the solicitation must notify the party receiving the solicitation. With regards to OTC (off-Exchange) trading of bond issues listed on the TOKYO PRO-BOND Market, the party conducting the solicitation is required to notify the party receiving the solicitation.
Investors can make a comprehensive contract with the underwriter which covers all above requirements regarding a bond issue listed on the TOKYO PRO-BOND Market. After an investor makes the contract with the underwriter when the investor acquires a bond listed on the TOKYO PRO-BOND Market for the first time, the investor does not have to make another contract with the underwriter or to notify the underwriter when the investor trades with the underwriter or when the investor acquires a bond listed on the TOKYO PRO-BOND Market from the underwriter.