Outline of Transactions

1. Transmission of Trade Report Data and Investment Instruction Data (Fig. 4)

As stated above, Order from investment managers to securities companies, Notice of Execution from securities companies to investment managers and Allocation between investment managers and securities companies are out of the scope of services, the service starts from the transmission of Trade Report Data from securities companies and Investment Instruction Data from investment managers. The data syntax used for Trade Report Data is MT515 of ISO15022 and that for Investment Instruction Data is MT541/543 (Buy/Sell).

2. Matching of Trade Report Data and Investment Instruction Data (Trade Matching)(Fig. 4 )

When Trade Report Data/Investment Instruction Data are received, PSMS searches for the data to be matched in accordance with the matching logic. When the data to be matched are specified, the matching procedure takes place and Notice Data of Trade Matching Status (MT509) are transmitted to the investment manager and securities company (originators of matching data) in the real-time together with the status information of "Matched" or "Unmatched".(Fig. 4 ) In case of "Unmatched", the reason of discrepancy and details of counterpart for unmatched item will be transmitted.

3. Transmission of Trade Report Data and Investment Instruction Data to Trust Banks and Trade Report Affirmation /Disaffirmation Data (Fig. 4 )

When the data is matched mentioned above item 2, Trade Report Data and Investment Instruction Data are immediately transmitted to the trust banks. (Fig.4 ) Trust banks then confirm the details of data and send out Trade Report Affirmation /Disaffirmation Data. ("Affirmed" or "Disaffirmed") (MT517) (Fig. 4 )Upon receipt of such data, PSMS transmits Notice Data of Trade Report Affirming Status to the securities companies. (MT509) (Fig. 4 ) In case the status indicates "Disaffirmed" by the trust banks, securities companies (or/and investment managers) cancel Trade Report Data (or/and Investment Instruction Data) already sent and resend (corrected) Trade Report Data (or/and Investment Instruction Data).
(Note): As ISO15022 does not have the function to correct data elements (re-submission of corrected specific element is not available), the cancellation of the data (all elements) already sent and re-entry of the corrected data have to be transmitted.

4. Generation of Settlement Instruction Data (Fig. 4 )

When Trade Report Affirmation /Disaffirmation Data sent by the trust banks mentioned above item 3 carries "Affirmed" flag, the process moves to the next step, Generation of Settlement Instruction Data.
To realize the straight-through nature of the process, PSMS provides Standing Settlement Instruction (SSI) database to register settlement conditions such as key account information for all trading parties. By use of this database, PSMS automatically generates and transmits Settlement Instruction Data to the settlement matching unit, and eliminates manual efforts of creation and transmission of the settlement instruction data by trust banks and securities companies.(Fig. 4 ) Then, Notice of Settlement Matching Status Data (MT548) with "Matched" status is to be sent to both parties.(Fig. 4 )

5. Generation of DVP Order(Fig. 4 )

When Settlement Instruction Data carrying 　"LINK/DVP" mentioned above item 4 is matching, PSMS prepares a DVP Order from the matched settlement instruction data of both deliverer and receiver immediately and transmits the order to the Book-entry Transfer System.(Fig. 4 )

1. Three-party Center Matching Type (Using Investment Instruction Distribution Service)

This type does not receive Investment Instruction Data from the investment managers, but PSMS, on their behalf, generates Investment Instruction Data based on Trade Report Data sent from the securities companies and transmits the data to the investment managers. After checking the contents of the data, the investment managers send it back to PSMS as Investment Instruction Data. The investment managers enable to replace Notice of Execution by Fax from the securities companies by the electronic data transmission.

2. Investment Instruction Support Unsubscribed Type

This type is for the case when investment managers do not participate in PSMS and send Investment Instruction Data (or Investment Instruction Statement) to trust banks by some other means. In this case, the trust banks receive only Trade Report Data sent by the securities companies via PSMS, match internally Trade Report Data with Investment Instruction Data (or Investment Instruction Statement) received by some other systems or methods and send Trade Report Affirmation Data to PSMS.

3. Through Type

This type is for cases that PSMS is not used for matching investment instruction data and trade report data. The investment instruction data sent from the investment managers and the trade report data sent from the broker/dealers are transmitted to the trust banks respectively. In this case, the trust banks match these two data internally and send the Trade Report Affirmation Data to PSMS.

4. Proper Type

This type is for the case when the buy-side consists of institutional investors such as life/non-life insurance companies or trust banks who perform investments and settlement for their own transactions. As parties involving the transactions in this case is only one, matching process becomes simpler than the case of specified money trust transactions, thus eliminating the transmission/receipt of Investment Instruction Data.

5. Two-party Center Matching Type

This type is for cases that two parties confirm the result of a bilateral trade and both the seller and buyer send the trade report data to PSMS respectively. PSMS executes matching of the trade report data sent from the seller and the buyer and immediately transmits Notice Data of Trade Matching Status.

1. Transmission of Settlement Instruction Data/Notice Data of Settlement Matching Status Data (Fig. 5 )

When Settlement Instruction Data (MT540-543) are received from settlement agents such as banks and securities companies who perform custody operations(Fig. 5 ), PSMS searches for the data to be matched in accordance with the matching logic. When the data to be matched are specified, the matching procedure takes place and Notice Data of Settlement Matching Status (MT548) are transmitted to both of the deliverer and receiver in the real-time with the status of "Unmatched" when there is one or more unmatched items, "Matched (settlement not executable)" when all items are matched but Release Flag, which carries the information whether the settlement is executable or not, on deliverer or receiver side stays "Release Not Executable", or "Matched (settlement executable on settlement date)" when all items are matched and Release Flags on both sides stay "Release Executable". (Fig. 5 )

2. Transmission of Settlement Instruction Modification Data/Notice Data of Settlement Instruction Modification Completion Data (Fig. 5 )

When Release Flag in Settlement Instruction Data transmitted as above item 1 is "Release Not Executable", settlement agents resend the correction data (MT599) to change Release Flag to be "Release Executable", after checking the balance of securities or funds, which caused the delivery to be suspended, and making the delivery to be executable. (Fig. 5 ) When the modification data are received, PSMS rewrites Release Flag of Settlement Instruction Data already recorded and transmits the modification completion data (MT548/578), with the corrected status, to both deliverer and receiver. (Fig. 5 )
It should be noted that the modification data could be issued not only to change Release Flag but to correct the settlement amount.

3. Generation of DVP Order (Fig. 5 )

When Settlement Instruction Data carrying "LINK/DVP" mentioned above item 2 is matching, PSMS generates a DVP Order from the matched settlement instruction data of both deliverer and receiver immediately and transmits the order to the Book-entry Transfer System. (Fig. 5 )

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