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(FYI) Historical Information

For your information, historical information of discussion towards the launch of PSMS is summarized below.

I. Background

1. Interim Report of the PSMS Working Group

JASDEC set up the PSMS Working Group in December 1998 to discuss developing the PSMS. The members of the group agreed that the introduction of the PSMS and DVP settlement was necessary for Japanese market to catch up with other advanced markets. The Working Group issued in June 1999 an Interim Report concluding that JASDEC should set up a task force to discuss the details of the system.

2. Setting up the PSMS Task Force

Following the above-mentioned Interim Report, JASDEC set up the PSMS Task Force which consisted of members from securities companies, banks, trust banks and investment managers as well as NTT Data Corporation in July 1999. The task force met 27 times and completed to draw up the System Requirement Document as a result of rigorous discussions. JASDEC formally appointed NTT Data Corporation as a system vendor to develop the system.

II Concepts at the time of PSMS launch

1. Objective

Set up a central matching system for institutional investors' transactions to promote STP infrastructure and T+1 settlement

2. Development Policy

(1) Implement the matching system by Spring 2001 accommodated to specific Japanese market settlement environments, which could be comparable to overseas STP infrastructures.
(2) By tying up with ISITC Japan, set up the Japanese standard which conforms to the international standard so that cross-border transactions and domestic transactions can be dealt with in a same manner
- Adopt ISO15022 as a data format
- Adopt ISIN for securities identification code (local code is also acceptable)
- Adopt BIC to standardize the identification code of financial institutions
- Standardize the fund code
(3) Realize the T+0 confirmation/affirmation, which was targeted in US and others (SIA and GSTPA model)
(4) Reduce the development costs

A. Reduce the development costs of PSMS
B. Reduce the development costs of user's system by utilizing the existing resources
(5) Link with other ETC services
(6) Support to realize DVP settlement
(7) Prepare for the T+1 settlement environment

3. Concepts of the System

(1) Process Covered
From "Sending the Trade Report Data" to "Finalizing the Settlement Instruction Data" (Link with DVP settlement system in the second phase)
(2) SSI function
Provide the SSI (Standing Settlement Instruction) database to generate a settlement instructions from trade data automatically, in order to realize fast and stable STP
(3) Scope of securities
Initially handle stock certificates at Phase 1 (Scheduled for Spring 2001) and include convertible bonds, etc at Phase 2 (Scheduled for Autumn 2001).
(4) Scope of business
Pre-settlement matching among domestic institutional investors, securities companies, banks and trust banks at Phase 1. Deal with the non-residents' transactions at Phase 2

4. Users

Institutional investors such as investment trusts, investment advisors as well as the users of Book-entry Transfer System such as securities companies, banks, trust banks and life/non-life insurance companies

5. Terminals

Users can access to PSMS through Web Server using a PC and a Browser.

Task Force Member Firms

PSMS Task Force for domestic transactions PSMS Task Force for non-residents' transactions
The Bank of Tokyo-Mitsubishi, Ltd.
The Chuo Mitsui Trust and Banking Company, Limited
Daiwa Securities SB Capital Markets Co., Ltd.
The Industrial Bank of Japan, Limited
Japan Bond Settlement Network Co., Ltd.
The Mitsubishi Trust and Banking Corporation
Nikko Salomon Smith Barney Limited
Nissay Asset Management Corporation
Nomura Asset Management Co., Ltd.
The Nomura Securities Co., Ltd.
Shinko Securities Co., Ltd.
The Sumitomo Trust & Banking Co., Ltd.
The Toyo Trust & Banking Co., Ltd.
UBS Warburg (Japan) Ltd.
The Bank of Tokyo-Mitsubishi, Ltd.
Citibank, N. A.
Daiwa Securities SB Capital Markets Co., Ltd.
The Fuji Bank, Limited
Goldman Sachs (Japan) Ltd.
Merrill Lynch Japan Incorporated
Morgan Stanley Dean Witter Japan Limited
Nikko Salomon Smith Barney Limited
The Nomura Securities Co., Ltd.
UBS Warburg (Japan) Ltd.

Pre-Settlement Matching System

  • Post-Trade Services Department
    Telephone: +81-3-3661-7196
  • System Development Department Representative for Pre-Settlement Matching System
    Telephone: +81-3-3661-7061

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