Market Link Guide – Japan – Equities, ETFs and REITs
Key features
CSD link as defined under CSDRa | Yes |
Type of link | Indirect via Hongkong and Shanghai Banking Corporation Limited (Tokyo Branch) to Japan Securities Depository Center, Inc (JASDEC) |
a. CSD Regulation (EU) No 909/2014, Article 2(29).
CSD | Custodian | |
Name | Japan Securities Depository Center, Inc (JASDEC) | Hongkong and Shanghai Banking Corporation Limited (HSBC), Tokyo branch |
FATCA GIIN | HK44AT.99999.SL.392 | 4RI52Y.00000.BR.392 |
LEI | 353800FS52Z4ZWJFA734 | 2HI3YI5320L3RW6NJ957 |
Country of incorporation | Japan | Hong Kong via its branch in Tokyo |
Account type | Dedicated omnibus account for CBL’s assets held at JASDEC, under HSBC’s direct participant status | Omnibus and segregated |
Legal Account name / holder | For equities (incl. convertible bonds): The Hongkong and Shanghai Banking Corporation Limited - 00411-81 For corporate bonds: The Hongkong and Shanghai Banking Corporation Limited - 00411-91 | Clearstream Banking S.A. |
Operational arrangements
| Yes/No | Remarks | |
| Settlement free of payment | Yes | |
| Settlement against payment | Yes | Eligible settlement currency: Japanese Yen (JPY). |
| Settlement against payment in central bank money account of CBL/CBL clients | No | CBL holds a cash account at the custodian. Against payment settlement in JPY takes place on the cash account of the custodian at the Bank of Japan. |
| Bridge settlement | Yes | |
| Shaping facility | No | |
| Partial settlement | No | |
| Settlement penalty fees | Yes | Refer to the Market Profile. |
| Pre-matching | Yes | |
| Back-to-back processing | Yes | Book entry equities only. |
| Allegements | Yes | |
| Automatic compensation | No | |
| Registered securities | No | |
| Multi-Market Securities | Yes | Refer to the Multi-Market Securities Guide. |
| Lending and borrowing | No | |
| Proxy voting | Yes | No physical attendance for AGM/EGM. |
| Investment Funds | Yes | ETF only (CBL Internal Settlement). |
| Liquidity Hub Connect | No | |
| Sale and purchase of rights | No | |
| Repo services | Yes | CBL internal settlement. |
| Market restrictions | Yes | Refer to Investment Regulation. |
| FTT | No | |
| Daily reconciliation | Yes |
Moment of entry of instructions | The rules of JASDEC do not define the moment of entry within the meaning of the Settlement Finality Directive. |
Irrevocability of instructions | FOP settlements may be cancelled prior to the transfer at the request of either the deliverer or receiver. However, in DVP settlement, after matching and during the period until the transfer, the settlement may be cancelled prior to the transfer only by request from both the deliverer and the receiver. |
Finality of instructions | Book-entry transfers become instantly final upon settlement in the books of JASDEC. |
Legal arrangements
The below section is based on the legal opinions obtained by CBL that were issued on 4 October 2023 (Hong Kong) and 28 November 2023 (Japan). The information is provided for guidance only and should not be considered in isolation or as constituting a complete or definitive legal advice on any specific matter.
No insolvency proceedings against the custodian | Confirmed |
Liability for negligence | Confirmed |
Book-entry regime with in rem rights | Confirmed |
Recognition of nominee concept | The laws and regulations of Japan do not have a concept equivalent to the nominee concept |
No right of retention for the custodian | Confirmed |
Segregation of assets at the custodian | Confirmed |
No right of use | Confirmed |
No upper-tier attachments | Confirmed |
Insolvency of the custodian with no impact on CBL's rights | Confirmed. Cash held by the custodian will only give rise to an unsecured claim against the estate of the custodian on insolvency. |
Shortfall pro-rated among holders | Confirmed |
Settlement finality in case of insolvency | There is no concept equivalent to finality under Japanese laws and regulations. |
Record keeping of at least 10 years | The custodian has committed to record keeping period of at least 7 years in accordance with the statutory law requirement in Hong-Kong. Under the laws and regulations of Japan, custodians have the obligation to maintain records for at least 10 years. |