Japanese Government BondsClearing Qualification
Requirements for Clearing Qualification related to JGB OTC Transaction
- Major acquisition and maintenance criteria for Clearing Qualification related to JGB OTC Transaction (hereinafter "JGB OTC Transaction Qualification") prescribed by JSCC are as described below.
- With respect to the criteria for financial basis, satisfaction by a parent guarantee is permitted. Please see Article 7, Paragraph 2 of the "Japanese Government Bond Over-the-Counter Transaction Clearing Business Rules" for details of the parent guarantee.
Requirements for Clearing Qualification
- 1. To be a Financial Instruments Business Operator, a Securities Finance Company, a Call Loan Dealer, a bank, a Cooperative Structured Financial Institution, The Shoko Chukin Bank, Ltd. or an insurance company.,
- 2. To satisfy certain criteria as to financial conditions (see Table 1 and 2). (*1)
- 3. To have management structure and business execution structure that are appropriate as a Clearing Participant.
<Table 1> Acquisition Criteria
● Financial Instruments Business Operator, Securities Finance Company or Call Loan Dealer | Principal Clearing Qualification | Agency Clearing Qualification (*2) | |
---|---|---|---|
Stated Capital | Not less than JPY300mil | Not less than JPY300mil | |
Net Worth (Jun Zaisan) / Net Assets (Jun Shisan) | Not less than JPY5bil | Not less than JPY20bil | |
Capital-to-Risk Ratio | More than 200% | More than 200% | |
Consolidated Capital-to-Risk Ratio (*3) | More than 200% | More than 200% | |
● Bank, Cooperative Structured Financial Institution, The Shoko Chukin Bank, Ltd., or Insurance Company | Principal Clearing Qualification | Agency Clearing Qualification | |
Stated Capital or Total Amount of Capital Contribution (*4) | Not less than JPY300mil | Not less than JPY300mil | |
Net Assets | Not less than JPY5bil | Not less than JPY20bil | |
Capital Adequacy Ratio (*5) | Uniform International Standard (*6) | (1) Common Equity Tier 1 ratio (*7): More than 4.5% (2) Tier 1 ratio: More than 6% (3) Total capital adequacy ratio: More than 8% |
(1) Common Equity Tier 1 ratio (*7): More than 4.5% (2) Tier 1 ratio: More than 6% (3) Total capital adequacy ratio: More than 8% |
Domestic Standards | More than 4% | More than 4% | |
Solvency Margin (*8) | More than 400% | More than 400% |
<Table 2> Maintenance Criteria
● Financial Instruments Business Operator, Securities Finance Company or Call Loan Dealer | Principal Clearing Qualification | Agency Clearing Qualification | |
---|---|---|---|
Stated Capital | Not less than JPY300mil | Not less than JPY300mil | |
Net Worth (Jun Zaisan) / Net Assets (Jun Shisan) | Not less than JPY1bil | Not less than JPY20bil | |
Capital-to-Risk Ratio | Not less than 140% | Not less than 200% | |
Consolidated Capital-to-Risk Ratio (*3) | Not less than 140% | Not less than 200% | |
● Bank, Cooperative Structured Financial Institution, The Shoko Chukin Bank, Ltd., or Insurance Company | Principal Clearing Qualification | Agency Clearing Qualification | |
Stated Capital or Total Amount of Capital Contribution (*4) | Not less than JPY300mil | Not less than JPY300mil | |
Net Assets | Not less than JPY1bil | Not less than JPY20bil | |
Capital Adequacy Ratio (*5) |
Uniform International Standard (*6)
|
(1) Common Equity Tier 1 ratio (*7): not less than 4.5%
(2) Tier 1 ratio: not less than 6% (3) Total capital adequacy ratio: not less than 8% |
(1) Common Equity Tier 1 ratio (*7): not less than 4.5%
(2) Tier 1 ratio: not less than 6% (3) Total capital adequacy ratio: not less than 8% |
Domestic Standards | Not less than 4% | Not less than 4% | |
Solvency Margin (*8) | Not less than 200% | Not less than 400% |
- *1:
- “Criteria for Intermediary Service Provider” will be separately prescribed.
- *2:
- An Agency Clearing Qualification authorizes to operate a Brokerage for Clearing of Securities, etc.Only a Financial Instruments Business Operator or a Registered Financial Institution may apply for acquisition of an Agency Clearing Qualification.
- *3:
- Only applied to Special Financial Instruments Business Operator which has filed the notification set forth in Article 57-5, Paragraph 2 of the Financial Instruments and Exchange Act.
- *4:
- It shall be the total amount of foundation fund (kikin) (including the amount of reserve for redemption of foundation fund) in case of a mutual company.
- *5:
- For a bank, Cooperative Structured Financial Institution or The Shoko Chukin Bank, Ltd. (hereinafter referred to as “Banks”), non-consolidated or consolidated capital adequacy ratio under Uniform International Standards if having overseas business office, and non-consolidated or consolidated capital adequacy ratio under domestic standards if not having overseas business office. In case of a foreign bank, it shall satisfy conditions equivalent thereto.
- *6:
- Apply to banks subject to Uniform International Standard, The Norinchukin Bank and The Shoko Chukin Bank, Ltd.
- *7:
- It shall be Ordinary Investment Securities Tier 1 ratio for The Norinchukin Bank.
- *8:
- Apply to insurance companies.
(Note) For acquisition and maintenance of JGB OTC Transaction Clearing Qualification, an arrangement of an appropriate system environment, such as participation in Pre-Settlement Matching System of JASDEC, is required.