Annual Report 2006

Transcription

Annual Report 2006

ANNUAL REPORT
2006
JAPAN
SECURITIES
DEALERS
ASSOCIATION
JAPAN
SECURITIES
DEALERS
ASSOCIATION
Contents
Message From The Chairman
2
Securities Market
4
System Revisions
8
Self-Regulation (Compliance)
10
Self-Regulation (Securities Market)
14
Securities Strategic Policy
18
General Affairs & Administration
21
Membership
22
Data of JSDA
26
Profile
36
JAPAN
SECURITIES
DEALERS
ASSOCIATION
Contents
Message From The Chairman
2
Securities Market
4
System Revisions
8
10
14
18
21
Membership
22
Data of JSDA
26
Profile
36
ooking back on fiscal 2005, it was a year of
considerable progress for Japan’s securities
markets. The stock market was given a
boost by the start of full-scale recovery in the
economy and the strong market activity by foreign
and individual investors based on expectations for
ongoing structural reforms and a long-awaited end
to deflation. It went on to reach record levels, after
hitting the post-bubble economy bottom marked in
April 2003. In the bond market, long-term interest
rates increased on the strength of the upswing in
the economy as reflected in rising commodity prices
and the Bank of Japan’s decision to end its
quantitative easing policy. To ensure the
continuation of a full-fledged economic recovery,
however, Japan needs to follow through with full-scale structural reforms and its
comprehensive response to the issues.
In the financial sector, aiming to convert ourselves from a society of savers to one of
investors, we need to make even greater efforts to accelerate the establishment of an
infrastructure that will invigorate securities markets and further promote securities
investment.
Against this backdrop, we have focused our full efforts on issues we consider vital to
improving investor confidence in securities markets and to stimulating those markets.
These major issues include (1) educating the public about and increasing their awareness
of securities, (2) building a strong market infrastructure, and (3) addressing market
environment issues, such as the legal system.
L
Japan finds itself in a period of great social and economic upheaval brought about by
the advent of a graying society with fewer children per family. Because of these trends,
individuals increasingly need to invest their assets wisely. Hence the need for asset
management services is growing. Financial literacy has become essential. To that end, we
have been promoting the dissemination of knowledge about securities among the public by
holding various types of seminars and seeking to improve the coverage of economics and
finance in school curriculums.
To spread knowledge about securities, it is indispensable to create an organizational
drive within the school system to teach our youth about securities and investment. For that
purpose, we believe the government should take the initiative by creating an educational
structure for finance and economics, and formulating a legal basis such as investor
education law to underpin those efforts. In future, we plan to proactively encourage the
government and related parties to address this issue.
While working to educate the public about securities, we also need to build securities
markets that investors can trust. Unfortunately, there were a series of incidents in fiscal
2005, including the massive erroneous order or trading suspensions brought about by
trading system troubles on stock exchanges, which caused not only great confusion but
also a notable loss of confidence in securities markets and companies.
In the wake of these incidents, JSDA investigated methods of preventing such
situations and minimizing damages should they occur. The results were incorporated into
a Board of Governor’s resolution, which was universally communicated to securities
members. We also requested securities exchanges to introduce preventative measures to
guard against future incidents.
Furthermore, we established the Securities Market Infrastructure Reinforcement Fund
based on voluntary contribution of the profits made by securities companies on the
erroneous order. While specific use of the fund has yet to be determined, it will be applied
to building infrastructure to recover and increase investor confidence in Japan’s markets.
Among other uses, we are considering creating a backup system or backup center as a
safeguard against disasters or trading system problems.
As part of our efforts to improve the legal infrastructure for securities markets, we
believe that continued favorable tax treatment for capital gains and dividends on stocks
owned by individuals, reduced taxation on stocks inherited or gifted, and a 50% deduction
from dividend income are important measures to ensure the continued vitality of the stock
market. We are committed to working toward these goals.
In response to changes in financial and capital markets, the Financial Instruments and
Exchange Law was enacted in June 2006. The new law implements a comprehensive,
cross-market system for regulating a broad-range of financial instruments in the interests
of providing greater protection for investors. It aims to achieve thorough adherence to
investor protection rules, increase the degree of convenience for investors, and make
Japan’s financial and capital markets more international. JSDA is currently considering the
establishment of self-regulatory rules in accordance with the new law.
For the future, JSDA will continue to dedicate its full efforts to accomplish its missions,
including vitalization of the securities market and promotion of securities investment by
individual investors. In meeting these challenges, we look forward to your continued
support and cooperation.
Hiroshi Koshida
Chairman
Japan Securities Dealers Association
2
Annual Report 2006
Annual Report 2006
3
ooking back on fiscal 2005, it was a year of
considerable progress for Japan’s securities
markets. The stock market was given a
boost by the start of full-scale recovery in the
economy and the strong market activity by foreign
and individual investors based on expectations for
ongoing structural reforms and a long-awaited end
to deflation. It went on to reach record levels, after
hitting the post-bubble economy bottom marked in
April 2003. In the bond market, long-term interest
rates increased on the strength of the upswing in
the economy as reflected in rising commodity prices
and the Bank of Japan’s decision to end its
quantitative easing policy. To ensure the
continuation of a full-fledged economic recovery,
however, Japan needs to follow through with full-scale structural reforms and its
comprehensive response to the issues.
In the financial sector, aiming to convert ourselves from a society of savers to one of
investors, we need to make even greater efforts to accelerate the establishment of an
infrastructure that will invigorate securities markets and further promote securities
investment.
Against this backdrop, we have focused our full efforts on issues we consider vital to
improving investor confidence in securities markets and to stimulating those markets.
These major issues include (1) educating the public about and increasing their awareness
of securities, (2) building a strong market infrastructure, and (3) addressing market
environment issues, such as the legal system.
L
Japan finds itself in a period of great social and economic upheaval brought about by
the advent of a graying society with fewer children per family. Because of these trends,
individuals increasingly need to invest their assets wisely. Hence the need for asset
management services is growing. Financial literacy has become essential. To that end, we
have been promoting the dissemination of knowledge about securities among the public by
holding various types of seminars and seeking to improve the coverage of economics and
finance in school curriculums.
To spread knowledge about securities, it is indispensable to create an organizational
drive within the school system to teach our youth about securities and investment. For that
purpose, we believe the government should take the initiative by creating an educational
structure for finance and economics, and formulating a legal basis such as investor
education law to underpin those efforts. In future, we plan to proactively encourage the
government and related parties to address this issue.
While working to educate the public about securities, we also need to build securities
markets that investors can trust. Unfortunately, there were a series of incidents in fiscal
2005, including the massive erroneous order or trading suspensions brought about by
trading system troubles on stock exchanges, which caused not only great confusion but
also a notable loss of confidence in securities markets and companies.
In the wake of these incidents, JSDA investigated methods of preventing such
situations and minimizing damages should they occur. The results were incorporated into
a Board of Governor’s resolution, which was universally communicated to securities
members. We also requested securities exchanges to introduce preventative measures to
guard against future incidents.
Furthermore, we established the Securities Market Infrastructure Reinforcement Fund
based on voluntary contribution of the profits made by securities companies on the
erroneous order. While specific use of the fund has yet to be determined, it will be applied
to building infrastructure to recover and increase investor confidence in Japan’s markets.
Among other uses, we are considering creating a backup system or backup center as a
safeguard against disasters or trading system problems.
As part of our efforts to improve the legal infrastructure for securities markets, we
believe that continued favorable tax treatment for capital gains and dividends on stocks
owned by individuals, reduced taxation on stocks inherited or gifted, and a 50% deduction
from dividend income are important measures to ensure the continued vitality of the stock
market. We are committed to working toward these goals.
In response to changes in financial and capital markets, the Financial Instruments and
Exchange Law was enacted in June 2006. The new law implements a comprehensive,
cross-market system for regulating a broad-range of financial instruments in the interests
of providing greater protection for investors. It aims to achieve thorough adherence to
investor protection rules, increase the degree of convenience for investors, and make
Japan’s financial and capital markets more international. JSDA is currently considering the
establishment of self-regulatory rules in accordance with the new law.
For the future, JSDA will continue to dedicate its full efforts to accomplish its missions,
including vitalization of the securities market and promotion of securities investment by
individual investors. In meeting these challenges, we look forward to your continued
support and cooperation.
Hiroshi Koshida
Chairman
2
Annual Report 2006
Annual Report 2006
3
Securities Market
Securities Market
Japanese Stock Market
20,000
trillion (yen)
15,000
70
Japanese Economy
NIKKEI 225
60
10,000
In fiscal 2005, the Japanese economy continued its recovery
driven primarily by favorable conditions in the corporate sector and
strong private-sector demand. Corporate sector recorded profit
growth for the fourth consecutive fiscal year. Stronger private-sector
demand was driven by further improvement in the employment
environment and in personal incomes in response to a better balance
of labor demand and supply. Corporate goods prices rose substantially
under the impact of soaring prices for crude oil. Although consumer
prices actually declined slightly in the first half due to declines in rice
prices and utility costs, they started to rise in November and have
continued to accelerate the price increase since January 2006,
providing a clear sign that deflation is coming to an end.
Stock Market
In the fiscal year under review, the Japanese stock market swung
upward overall. After the Nikkei 225 Average began at ¥11,590, the
market remained level weighted down by an idling economy and
rising inventories in the global IT industry due to struggling demand.
The market hit its low for the year in mid-May, at ¥10,788, following
which it staged a steady recovery with the help of the successive
start up of investment trust funds and strong performances by
overseas markets.
On August 9, the Japanese government and the Bank of Japan
both announced that the economy was no longer marking time.
Business sentiment surged on the strength of expectations that
deflation was coming to an end, causing a sharp rise in the stock
market. Further impetus was provided by the overwhelming victory
of the Liberal Democratic Party in the general election held in
September, which heightened expectations for the ongoing LDP
structural reform program. Foreign investors reacted with ballooning
purchases of Japanese stocks. Following the election, the market
continued to make progress, recovering to a five-year high of ¥16,000
at year end, representing a 40% improvement over the year.
The upward climb continued in early 2006, but lost some ground
4
Annual Report 2006
50
TOPIX (X10)
40
30
5,000
Trading Value
(right scale)
20
10
0
0
2001
2001
2001
2002
2002
2002
2003
2003
2003
2004
2004
2004
2005
2005
2005
Apr.
Aug.
Dec.
Apr.
Aug.
Dec.
Apr.
Aug.
Dec.
Apr.
Aug.
Dec.
Apr.
Aug.
Dec.
in February due to a decline in individual investor buying power in
reaction to a sharp drop in venture companies' stocks. Moving into
March, the Bank of Japan announced the end to its quantitative
easing policy, spreading expectations of an end to deflation
throughout the market. Buoyed by this news, the market soared to
¥17,000 mark for the first time in five years and seven months. The
market ended the fiscal year at ¥17,059, up 46% from the previous
fiscal year end.
On the strength of expectations that Japan was exiting its
prolonged deflationary spiral, individual and foreign investors
increased their activity in the market. Reflecting robust trading,
annual trading value on the First Section of the Tokyo Stock
Exchange rose to ¥554 trillion compared with ¥325 trillion in the
previous fiscal year, and trading volume expanded to 536.4 billion
shares compared with 373.5 billion shares in fiscal 2004.
Bond Markets
Primary Market
In fiscal 2005, domestic public and corporate
bonds issued through public offerings amounted to
¥211.6 trillion, dropping ¥4.3 trillion or 2.0% from
the previous fiscal year. This was the first time in
eight years that the market had contracted.
Issuance of public bonds declined to ¥202.6
trillion, down by ¥5.3 trillion or 2.5%. The decrease
could mainly be attributed to a 13.1% fall in
financing bills, to ¥54.7 trillion* in relation to the
treasury's financing tactics. Government bond
issuance, however, grew by 1.9% to ¥130.0 trillion*
because of an increase in debt rollover. Super longterm bonds remained the main component of
Annual Report 2006
5
Securities Market
Securities Market
Japanese Stock Market
20,000
trillion (yen)
15,000
70
Japanese Economy
NIKKEI 225
60
10,000
In fiscal 2005, the Japanese economy continued its recovery
driven primarily by favorable conditions in the corporate sector and
strong private-sector demand. Corporate sector recorded profit
growth for the fourth consecutive fiscal year. Stronger private-sector
demand was driven by further improvement in the employment
environment and in personal incomes in response to a better balance
of labor demand and supply. Corporate goods prices rose substantially
under the impact of soaring prices for crude oil. Although consumer
prices actually declined slightly in the first half due to declines in rice
prices and utility costs, they started to rise in November and have
continued to accelerate the price increase since January 2006,
providing a clear sign that deflation is coming to an end.
Stock Market
In the fiscal year under review, the Japanese stock market swung
upward overall. After the Nikkei 225 Average began at ¥11,590, the
market remained level weighted down by an idling economy and
rising inventories in the global IT industry due to struggling demand.
The market hit its low for the year in mid-May, at ¥10,788, following
which it staged a steady recovery with the help of the successive
start up of investment trust funds and strong performances by
overseas markets.
On August 9, the Japanese government and the Bank of Japan
both announced that the economy was no longer marking time.
Business sentiment surged on the strength of expectations that
deflation was coming to an end, causing a sharp rise in the stock
market. Further impetus was provided by the overwhelming victory
of the Liberal Democratic Party in the general election held in
September, which heightened expectations for the ongoing LDP
structural reform program. Foreign investors reacted with ballooning
purchases of Japanese stocks. Following the election, the market
continued to make progress, recovering to a five-year high of ¥16,000
at year end, representing a 40% improvement over the year.
The upward climb continued in early 2006, but lost some ground
4
Annual Report 2006
50
TOPIX (X10)
40
30
5,000
Trading Value
(right scale)
20
10
0
0
2001
2001
2001
2002
2002
2002
2003
2003
2003
2004
2004
2004
2005
2005
2005
Apr.
Aug.
Dec.
Apr.
Aug.
Dec.
Apr.
Aug.
Dec.
Apr.
Aug.
Dec.
Apr.
Aug.
Dec.
in February due to a decline in individual investor buying power in
reaction to a sharp drop in venture companies' stocks. Moving into
March, the Bank of Japan announced the end to its quantitative
easing policy, spreading expectations of an end to deflation
throughout the market. Buoyed by this news, the market soared to
¥17,000 mark for the first time in five years and seven months. The
market ended the fiscal year at ¥17,059, up 46% from the previous
fiscal year end.
On the strength of expectations that Japan was exiting its
prolonged deflationary spiral, individual and foreign investors
increased their activity in the market. Reflecting robust trading,
annual trading value on the First Section of the Tokyo Stock
Exchange rose to ¥554 trillion compared with ¥325 trillion in the
previous fiscal year, and trading volume expanded to 536.4 billion
shares compared with 373.5 billion shares in fiscal 2004.
Bond Markets
Primary Market
In fiscal 2005, domestic public and corporate
bonds issued through public offerings amounted to
¥211.6 trillion, dropping ¥4.3 trillion or 2.0% from
the previous fiscal year. This was the first time in
eight years that the market had contracted.
Issuance of public bonds declined to ¥202.6
trillion, down by ¥5.3 trillion or 2.5%. The decrease
could mainly be attributed to a 13.1% fall in
financing bills, to ¥54.7 trillion* in relation to the
treasury's financing tactics. Government bond
issuance, however, grew by 1.9% to ¥130.0 trillion*
because of an increase in debt rollover. Super longterm bonds remained the main component of
Annual Report 2006
5
Among the special features of the year, the amount
of BBB-rated bond issued grew 22.3% and the
amount of corporate bonds targeting individual
investors increased 6.5%. Furthermore, there were
many first-time issuers of bonds to the public in the
fiscal year under review. Other notable trends
included asset-backed bond issuance jumping
89.4%, to ¥0.4 trillion.
Among bonds issued by non-residents, issuance
of yen-denominated foreign bonds decreased 5.1%
from the previous fiscal year, to ¥1.6 trillion. However, issuance of large-scale bonds by high-rated
private companies in leading industrialized nations
was robust. International organization located in
Latin America issued yen-denominated foreign
bonds. This was the first time for Central and South
American issuers to issue yen-denominated bonds
after Argentina's default on its debt.
Domestic Public and Corporate Bonds Issued
Through Public Offerings
Billions of yen
Fiscal Year
2000
2001
2002
2003
2004
2005
Government bonds
133,901
140,947
152,719
179,021
190,494
184,724
Other public bonds
7,460
7,271
9,847
14,182
17,430
17,913
Corporate bonds
8,479
8,849
8,040
7,269
6,273
7,371
Yen-denominated foreign bonds
2,382
1,298
641
943
1,677
1,592
152,222
158,366
171,247
201,415
215,874
211,599
Total
OTC Bond Trading
Billions of yen
*This figure excludes treasury bills and financing bills that
FY2004
FY2005
6,317,397
6,900,627
574,071
977,979
Long term (10 and 6 years)
2,156,802
2,379,783
Medium term (2 to 4 years)
1,466,848
1,764,268
were issued and matured in fiscal 2005.
Total government bonds
Long term (over 10 years)
Secondary Market
Ending the previous fiscal year at 1.320%, the
yield (reference prices [yields] for OTC bond
transactions at simple interest for 10-year
government bonds recently issued) on long-term
government bonds moved steadily down from April
to the latter part of July.
Yields then started to recover, although there
was another downward spell from the latter part of
August to early September. This recovery lasted
until mid-November, with the yield rising to
1.620% on November 7, passing a previous high
record (1.610%) on August 25, 2004.
Following this high, the yield retreated
somewhat, moving within a tight box between mid1.4% and mid-1.5%. As the view that the
quantitative easing policy was going to end
gathered strength from mid-February, however,
the yield swung upward sharply to end the fiscal
year at 1.764%.
Discount
3,039
61
439,609
373,005
Financing bills
1,677,029
1,405,531
Municipal bonds
48,396
56,084
Government-guaranteed bonds
73,530
81,499
Fiscal Investment and Loan Program Agency Bonds, etc.
14,420
19,229
690
101
32,563
30,427
32,563
30,427
1
0
Treasury bills
Other special bonds
Bank debentures
Interest-bearing
Discount
Yen-denominated foreign bonds (Samurai bonds)
13,564
13,423
Total corporate bonds
89,824
79,851
1,302
1,321
Electric power bonds
23,590
14,523
Other bonds
64,933
64,007
349
1,121
2,249
1,455
41,565
39,976
33,765
32,791
NTT, JR bonds
Specified corporate debt security
Convertible bonds and warrant bonds
Private placement bonds
Municipal bonds
Others
Total
6
Annual Report 2006
Securities Market
issuance growth while the issuance of government
bonds for individual investors continued to grow in
popularity due to the end to unlimited bank deposit
guarantee system and the introduction of five-year
fixed interest-bearing bonds. A variety of measures
were introduced in the market during the fiscal
year, such as the relaxation of the restriction on selling inflation-indexed government bonds. Moreover,
the syndicate system that had contributed to the
smooth absorption of government bond issues by
the market since 1966 was abolished in March
2006 due to the JGB Market Special Participants
scheme becoming firmly established. government
bond issues by the market since 1966 was abolished in March 2006 due to the firm establishment of
the JGB Market Special Participants scheme.
Among municipal bonds and governmentguaranteed bonds issuance, the amount of Fiscal
Investment and Loan Program Agency Bonds
issued rose 56.4% year on year, to ¥4.7 trillion
under the influence of the start of securitization of
the previous housing loans held by the Government
Housing Loan Corporation. Municipal bond issuance
expanded 9.4%, to ¥6.2 trillion as municipalities
increasing raised funds in capital markets due to
the contraction in government funding. On the
other hand, government-guaranteed bonds
issuance declined 20.0%, to ¥7.0 trillion, reflecting
the drop in bond issuance by the Deposit Insurance
Corporation of Japan. At the same time, there has
been a significant broadening of the terms available
in these types of bonds, with the Fiscal Investment
and Loan Program Agency issuing the first
domestic 40-year bonds and the first issues of 15year and 3-year government-guaranteed bonds.
The value of corporate bonds issued climbed
¥1.1 trillion, or 17.5%, to ¥7.4 trillion from the
previous fiscal year. Of that amount, straight bonds
increased 17.1% from the preceding year to ¥6.9
trillion, rising for the first time in four years. Behind
the increase was growth in demand for funds for
capital investment because of improved corporate
performance and anticipation of a hike in interest
rates after the prolonged low-interest-rate climate.
7,800
7,184
6,634,547
7,223,791
Annual Report 2006
7
Among the special features of the year, the amount
of BBB-rated bond issued grew 22.3% and the
amount of corporate bonds targeting individual
investors increased 6.5%. Furthermore, there were
many first-time issuers of bonds to the public in the
fiscal year under review. Other notable trends
included asset-backed bond issuance jumping
89.4%, to ¥0.4 trillion.
Among bonds issued by non-residents, issuance
of yen-denominated foreign bonds decreased 5.1%
from the previous fiscal year, to ¥1.6 trillion. However, issuance of large-scale bonds by high-rated
private companies in leading industrialized nations
was robust. International organization located in
Latin America issued yen-denominated foreign
bonds. This was the first time for Central and South
American issuers to issue yen-denominated bonds
after Argentina's default on its debt.
Domestic Public and Corporate Bonds Issued
Through Public Offerings
Billions of yen
Fiscal Year
2000
2001
2002
2003
2004
2005
Government bonds
133,901
140,947
152,719
179,021
190,494
184,724
Other public bonds
7,460
7,271
9,847
14,182
17,430
17,913
Corporate bonds
8,479
8,849
8,040
7,269
6,273
7,371
Yen-denominated foreign bonds
2,382
1,298
641
943
1,677
1,592
152,222
158,366
171,247
201,415
215,874
211,599
Total
OTC Bond Trading
Billions of yen
*This figure excludes treasury bills and financing bills that
FY2004
FY2005
6,317,397
6,900,627
574,071
977,979
Long term (10 and 6 years)
2,156,802
2,379,783
Medium term (2 to 4 years)
1,466,848
1,764,268
were issued and matured in fiscal 2005.
Total government bonds
Long term (over 10 years)
Secondary Market
Ending the previous fiscal year at 1.320%, the
yield (reference prices [yields] for OTC bond
transactions at simple interest for 10-year
government bonds recently issued) on long-term
government bonds moved steadily down from April
to the latter part of July.
Yields then started to recover, although there
was another downward spell from the latter part of
August to early September. This recovery lasted
until mid-November, with the yield rising to
1.620% on November 7, passing a previous high
record (1.610%) on August 25, 2004.
Following this high, the yield retreated
somewhat, moving within a tight box between mid1.4% and mid-1.5%. As the view that the
quantitative easing policy was going to end
gathered strength from mid-February, however,
the yield swung upward sharply to end the fiscal
year at 1.764%.
Discount
3,039
61
439,609
373,005
Financing bills
1,677,029
1,405,531
Municipal bonds
48,396
56,084
Government-guaranteed bonds
73,530
81,499
Fiscal Investment and Loan Program Agency Bonds, etc.
14,420
19,229
690
101
32,563
30,427
32,563
30,427
1
0
Treasury bills
Other special bonds
Bank debentures
Interest-bearing
Discount
Yen-denominated foreign bonds (Samurai bonds)
13,564
13,423
Total corporate bonds
89,824
79,851
1,302
1,321
Electric power bonds
23,590
14,523
Other bonds
64,933
64,007
349
1,121
2,249
1,455
41,565
39,976
33,765
32,791
NTT, JR bonds
Specified corporate debt security
Convertible bonds and warrant bonds
Private placement bonds
Municipal bonds
Others
Total
6
Annual Report 2006
Securities Market
issuance growth while the issuance of government
bonds for individual investors continued to grow in
popularity due to the end to unlimited bank deposit
guarantee system and the introduction of five-year
fixed interest-bearing bonds. A variety of measures
were introduced in the market during the fiscal
year, such as the relaxation of the restriction on selling inflation-indexed government bonds. Moreover,
the syndicate system that had contributed to the
smooth absorption of government bond issues by
the market since 1966 was abolished in March
2006 due to the JGB Market Special Participants
scheme becoming firmly established. government
bond issues by the market since 1966 was abolished in March 2006 due to the firm establishment of
the JGB Market Special Participants scheme.
Among municipal bonds and governmentguaranteed bonds issuance, the amount of Fiscal
Investment and Loan Program Agency Bonds
issued rose 56.4% year on year, to ¥4.7 trillion
under the influence of the start of securitization of
the previous housing loans held by the Government
Housing Loan Corporation. Municipal bond issuance
expanded 9.4%, to ¥6.2 trillion as municipalities
increasing raised funds in capital markets due to
the contraction in government funding. On the
other hand, government-guaranteed bonds
issuance declined 20.0%, to ¥7.0 trillion, reflecting
the drop in bond issuance by the Deposit Insurance
Corporation of Japan. At the same time, there has
been a significant broadening of the terms available
in these types of bonds, with the Fiscal Investment
and Loan Program Agency issuing the first
domestic 40-year bonds and the first issues of 15year and 3-year government-guaranteed bonds.
The value of corporate bonds issued climbed
¥1.1 trillion, or 17.5%, to ¥7.4 trillion from the
previous fiscal year. Of that amount, straight bonds
increased 17.1% from the preceding year to ¥6.9
trillion, rising for the first time in four years. Behind
the increase was growth in demand for funds for
capital investment because of improved corporate
performance and anticipation of a hike in interest
rates after the prolonged low-interest-rate climate.
7,800
7,184
6,634,547
7,223,791
Annual Report 2006
7
Amendments to the Securities and Exchange Law
In June 2005, in response to the recent changes in the environment
surrounding securities markets, the following revisions were made to
the Securities and Exchange Law to further increase the fairness and
transparency of domestic securities markets and to improve
international competitiveness. These revisions are being enforced in
order starting in July 2005.
(1) Revision in TOB regulation
The takeover bid (TOB) regulation did not apply to off-floor
transactions (transactions made outside market hours via network
system provided by stock exchanges). To provide all shareholders with
an equal opportunity to sell shares, however, the criterion was revised.
Now the TOB regulation applies to off-floor transactions similar to
negotiated transactions in the case where the purchaser plans to
purchase the target company’s share exceeded 1/3 of outstanding
shares. As a result, with regard to such off-floor transactions as
described above, a buyer is obliged to comply with procedures required
for TOBs and must disclose the purchase price and other related
information beforehand.
(2) Disclosure made mandatory for parent
companies of listed companies
Previously, when a subsidiary of an unlisted company was a listed
company, the parent company did not have to disclose its business or
financial information. However, to establish trust in the business
disclosure system, the law has been revised to make it mandatory to
disclose information on the parent companies of listed companies.
(3) Acceptance of information disclosure in English
by foreign companies and other institutions
In the past, a foreign company listed on securities markets in Japan
had to annually prepare and submit a Securities Report in Japanese. To
make Japan’s securities markets more international and more
internationally competitive, the law has been revised to enable foreign
companies and other institutions to submit the Securities Report in
English as long as Japanese summaries and other supplemental
documentation are provided. This revision applies only to the companies
and other institutions which disclose their information in English in
accordance with proper disclosure standards in their own jurisdictions.
8
Annual Report 2006
System Revisions
System Revisions
Revision of Securities-Related Taxation System
In September 2005, three securities-related associations submitted
their requests for the taxation system revision in the fiscal 2006 to
the related authorities. The main focus of the requests was on
measures to promote the shift from savings to investment and to
unify the taxation of financial income. Despite these efforts, no
measure to unify the taxation of financial income was included in the
government’s taxation system revision in the fiscal 2006.
However, the revisions did implemented measures to improve the
degree of convenience of securities companies’ special account
system, which falls under the popular tax payment system among
individual investors, to allow securities companies to deliver their
special account annual transaction reports to customers by electronic
means.
In addition, various tax measures were introduced to promote
international investment. For example, the special tax treatment for
cross-border repurchase transactions in public and corporate bonds
that was scheduled to be abolished at the end of March 2006 was
extended for another two years.
Enactment of the Financial Instruments
and Exchange Law
The “Financial Instruments and Exchange Law” was enacted in
June 2006.
Taking into account changes in the environment of financial and
capital markets, the law sets up a cross-product legal structure to
protect investors. This reform aims to achieve thorough adherence to
investor protection rules, increase the degree of convenience of
investors, and make Japan’s financial and capital markets more
international. The major points are as follows.
(1) The name of the “Securities and Exchange Law” will be changed
to the “Financial Instruments and Exchange Law.”
(2) Comprehensive regulations on definitions regarding contracts to
invest as a group (collective investment schemes) will be set up,
expanding the scope of financial products covered by the law.
(3) Sales, portfolio management, advice and asset management will
all fall under financial instruments businesses, and regulations
will be established for practitioners in accordance with the
nature of their business.
(4) Application of business practices rules will be made flexible in
accordance with the type of business and targeted customers.
Annual Report 2006
9
Amendments to the Securities and Exchange Law
In June 2005, in response to the recent changes in the environment
surrounding securities markets, the following revisions were made to
the Securities and Exchange Law to further increase the fairness and
transparency of domestic securities markets and to improve
international competitiveness. These revisions are being enforced in
order starting in July 2005.
(1) Revision in TOB regulation
The takeover bid (TOB) regulation did not apply to off-floor
transactions (transactions made outside market hours via network
system provided by stock exchanges). To provide all shareholders with
an equal opportunity to sell shares, however, the criterion was revised.
Now the TOB regulation applies to off-floor transactions similar to
negotiated transactions in the case where the purchaser plans to
purchase the target company’s share exceeded 1/3 of outstanding
shares. As a result, with regard to such off-floor transactions as
described above, a buyer is obliged to comply with procedures required
for TOBs and must disclose the purchase price and other related
information beforehand.
(2) Disclosure made mandatory for parent
companies of listed companies
Previously, when a subsidiary of an unlisted company was a listed
company, the parent company did not have to disclose its business or
financial information. However, to establish trust in the business
disclosure system, the law has been revised to make it mandatory to
disclose information on the parent companies of listed companies.
(3) Acceptance of information disclosure in English
by foreign companies and other institutions
In the past, a foreign company listed on securities markets in Japan
had to annually prepare and submit a Securities Report in Japanese. To
make Japan’s securities markets more international and more
internationally competitive, the law has been revised to enable foreign
companies and other institutions to submit the Securities Report in
English as long as Japanese summaries and other supplemental
documentation are provided. This revision applies only to the companies
and other institutions which disclose their information in English in
accordance with proper disclosure standards in their own jurisdictions.
8
Annual Report 2006
System Revisions
System Revisions
Revision of Securities-Related Taxation System
In September 2005, three securities-related associations submitted
their requests for the taxation system revision in the fiscal 2006 to
the related authorities. The main focus of the requests was on
measures to promote the shift from savings to investment and to
unify the taxation of financial income. Despite these efforts, no
measure to unify the taxation of financial income was included in the
government’s taxation system revision in the fiscal 2006.
However, the revisions did implemented measures to improve the
degree of convenience of securities companies’ special account
system, which falls under the popular tax payment system among
individual investors, to allow securities companies to deliver their
special account annual transaction reports to customers by electronic
means.
In addition, various tax measures were introduced to promote
international investment. For example, the special tax treatment for
cross-border repurchase transactions in public and corporate bonds
that was scheduled to be abolished at the end of March 2006 was
extended for another two years.
Enactment of the Financial Instruments
and Exchange Law
The “Financial Instruments and Exchange Law” was enacted in
June 2006.
Taking into account changes in the environment of financial and
capital markets, the law sets up a cross-product legal structure to
protect investors. This reform aims to achieve thorough adherence to
investor protection rules, increase the degree of convenience of
investors, and make Japan’s financial and capital markets more
international. The major points are as follows.
(1) The name of the “Securities and Exchange Law” will be changed
to the “Financial Instruments and Exchange Law.”
(2) Comprehensive regulations on definitions regarding contracts to
invest as a group (collective investment schemes) will be set up,
expanding the scope of financial products covered by the law.
(3) Sales, portfolio management, advice and asset management will
all fall under financial instruments businesses, and regulations
will be established for practitioners in accordance with the
nature of their business.
(4) Application of business practices rules will be made flexible in
accordance with the type of business and targeted customers.
Annual Report 2006
9
Revising the Qualification Examination System
for Sales Representatives
In view of the entrance of special members to the sales agency
business for securities companies and other recent system changes
and the number of people taking examinations for various
qualifications in the securities industry, JSDA formed a working
group to consider the overall revision of its qualification examination
system for sales representatives in November 2004. The working
group produced a report in June 2005.
In September 2005, based on the working group’s report, JSDA
revised its regulations to implement the following two points. First,
JSDA broadened the scope of people able to take the internal
administrator qualification examination for regular and special
members, expanding it to include employees of holding companies of
a member company or employees of companies planning to become
JSDA members (enforced in December 2005). Second, in
consideration of the number of examination applicants for different
examinations, JSDA made the examination process more practical
by integrating the qualification examination for margin transactions
sales representatives into the class-1 sales representative
qualification examination and the qualification examination for sales
managers into the internal administrator qualification examination
(enforced in April 2006).
customers and building trust in securities companies, established a
JSDA working group concerning a response to the issue of forgery
and theft of cards in October 2005. The working group deliberated
self-regulatory rules for the securities industry.
Based on those deliberations, in February 2006, Resolution
concerning the Protection, etc., of Customers from Illegal Withdrawal
resulting from the Forgery or Theft of Cards was passed by the Board
of Governors of JSDA (Self-regulation Board). This resolution states
that with the exception of cases where the customer has been
seriously negligent, in principle, the customer shall be compensated
for damages resulting from the forgery or theft of a securities
company card. JSDA also published a Q&A pamphlet on the
resolution for its members.
Creating Business Continuity Plans (BCPs)
(1) Establishing Member BCPs
In June 2005, JSDA issued Guidelines for Regular Members on
Establishing Business Continuity System in cases of Contingencies as a
Resolution of Board of Governors (Self-regulation Board). The
guidelines contain fundamental approach and specific ideas on
measures to be taken to preserve business viability in the event of a
disaster. They consider how to maintain the functioning of securities
companies and the securities market and protecting customers’ assets
and the reliability of securities transactions in the event of earthquakes,
typhoon or flood damage, terrorist attacks, and other disasters.
In conjunction with these guidelines, JSDA also published A
Member’s Guide to Setting Up a “BCP” with Specific Plan Items and
Examples of Measures, which explains procedures according to
hypothesized disaster scenarios.
(2) Establishing a BCP for the Overall Securities
Market
Tackling the Issue of Forged
and Stolen Cash Cards
Recently many consumers have suffered damages due to cash
cards issued by banks and other financial institutions being forged or
stolen. Because this has become a social issue, a law regarding scope
of compensation by banks and other financial institutions to depositors
who have lost money due to their cash cards being forged or stolen
was enacted in August 2005 and enforced in February 2006.
Cards issued by securities companies do not fall under this law.
The securities industry, however, from the perspective of protecting
10
Annual Report 2006
In September 2005, under the joint auspices of the Self-regulation
and the Securities Strategic Policy Boards, JSDA formed a working
group on a BCP for the overall securities market. The working group
examined maintaining the major functions of the securities market
during a temporary period of difficulty after a major earthquake,
terrorist attack or other disaster or recovering or rebuilding the
securities market. Their report was issued in February 2006.
Based on that report, the Self-regulation and the Securities
Strategic Policy Boards took steps to begin creating of a BCP for the
overall securities market. The boards decided to request that
securities market-related institutions and people participate in a
forum about forming a BCP for the overall securities market, and sent
out these requests.
Annual Report 2006
11
Revising the Qualification Examination System
for Sales Representatives
In view of the entrance of special members to the sales agency
business for securities companies and other recent system changes
and the number of people taking examinations for various
qualifications in the securities industry, JSDA formed a working
group to consider the overall revision of its qualification examination
system for sales representatives in November 2004. The working
group produced a report in June 2005.
In September 2005, based on the working group’s report, JSDA
revised its regulations to implement the following two points. First,
JSDA broadened the scope of people able to take the internal
administrator qualification examination for regular and special
members, expanding it to include employees of holding companies of
a member company or employees of companies planning to become
JSDA members (enforced in December 2005). Second, in
consideration of the number of examination applicants for different
examinations, JSDA made the examination process more practical
by integrating the qualification examination for margin transactions
sales representatives into the class-1 sales representative
qualification examination and the qualification examination for sales
managers into the internal administrator qualification examination
(enforced in April 2006).
customers and building trust in securities companies, established a
JSDA working group concerning a response to the issue of forgery
and theft of cards in October 2005. The working group deliberated
self-regulatory rules for the securities industry.
Based on those deliberations, in February 2006, Resolution
concerning the Protection, etc., of Customers from Illegal Withdrawal
resulting from the Forgery or Theft of Cards was passed by the Board
of Governors of JSDA (Self-regulation Board). This resolution states
that with the exception of cases where the customer has been
seriously negligent, in principle, the customer shall be compensated
for damages resulting from the forgery or theft of a securities
company card. JSDA also published a Q&A pamphlet on the
resolution for its members.
Creating Business Continuity Plans (BCPs)
(1) Establishing Member BCPs
In June 2005, JSDA issued Guidelines for Regular Members on
Establishing Business Continuity System in cases of Contingencies as a
Resolution of Board of Governors (Self-regulation Board). The
guidelines contain fundamental approach and specific ideas on
measures to be taken to preserve business viability in the event of a
disaster. They consider how to maintain the functioning of securities
companies and the securities market and protecting customers’ assets
and the reliability of securities transactions in the event of earthquakes,
typhoon or flood damage, terrorist attacks, and other disasters.
In conjunction with these guidelines, JSDA also published A
Member’s Guide to Setting Up a “BCP” with Specific Plan Items and
Examples of Measures, which explains procedures according to
hypothesized disaster scenarios.
(2) Establishing a BCP for the Overall Securities
Market
Tackling the Issue of Forged
and Stolen Cash Cards
Recently many consumers have suffered damages due to cash
cards issued by banks and other financial institutions being forged or
stolen. Because this has become a social issue, a law regarding scope
of compensation by banks and other financial institutions to depositors
who have lost money due to their cash cards being forged or stolen
was enacted in August 2005 and enforced in February 2006.
Cards issued by securities companies do not fall under this law.
The securities industry, however, from the perspective of protecting
10
Annual Report 2006
In September 2005, under the joint auspices of the Self-regulation
and the Securities Strategic Policy Boards, JSDA formed a working
group on a BCP for the overall securities market. The working group
examined maintaining the major functions of the securities market
during a temporary period of difficulty after a major earthquake,
terrorist attack or other disaster or recovering or rebuilding the
securities market. Their report was issued in February 2006.
Based on that report, the Self-regulation and the Securities
Strategic Policy Boards took steps to begin creating of a BCP for the
overall securities market. The boards decided to request that
securities market-related institutions and people participate in a
forum about forming a BCP for the overall securities market, and sent
out these requests.
Annual Report 2006
11
Strengthening Inspection System
Items Inspected in Fiscal 2005
JSDA conducts onsite inspections of the operations of its
members at regular intervals to ensure they are observing laws,
regulations and self-regulatory rules, and also to check their internal
administrative systems.
Compliance with suitability principle
Sales activities by unregistered and unqualified personnel
Segregation of client assets
Compliance with the laws and rules concerning off-exchange transactions
Compliance with the laws and rules concerning Green Sheet Issue transactions
(1) Inspections of Regular Members
Undertaking transactions using a fictitious name and lending or borrowing of a
Guided by fiscal 2004 results, JSDA inspected 102 regular
member firms on-site in fiscal 2005. Emphasis was placed on (i )
segregation of client assets, (ii) registration of sales representatives,
(iii) compliance with laws and regulations, (iv) compliance with
“suitability principles”, and (v) expansion and strengthening of the
internal administration system. Of the inspected regular members, 46
members that are also market participants of stock exchanges in
Japan were inspected jointly with stock exchanges. Through this joint
inspections system, JSDA and stock exchanges aim to implement
effective inspections and remove the burden of duplicated inspections
on the companies.
As a result of the inspections of regular member firms, 27
violated items were discovered at a total of 57 companies (legal
violations at 47 firms, self-regulatory violations at 27 firms, both at
17 firms). No violation was discovered at a total of 45 regular
member firms. Of the 57 firms found to have regulatory violations, 1
firm was given warnings and required to strengthen their internal
administration systems.
In addition, at the request of the Tokyo, Osaka, and Jasdaq stock
exchanges, JSDA cooperated in investigations into stock transactions
of 222 issues at a total of 720 securities firms.
name or address
Unapproved buying and selling
Lending and borrowing of cash or securities to or from clients
Compliance with laws and regulations on soliciting investment and managing
customers, etc.
Compliance with other laws and regulations on other forbidden practices
Internal administration practices
Regulated capital-adequacy ratio*
Property*
(Note) Items marked with an asterisk are not included in the inspection of special members.
However, special members are also inspected for items not included in regular member inspections:
(1) investment solicitation with an offer of special advantages for financing, etc., (2) measures to
ensure customers understand the differences between securities and cash deposits, and (3)
automatic credit provision.
(2) Inspections of Special Members
JSDA conducts inspections of special members such as banks,
trust banks, credit banks (shinkin banks) and insurance companies
either on-the-spot or through document-based inspections. In the
fiscal 2005, JSDA inspected 62 institutions on-site, and 8 others
based on documents with emphasis placed on the same items as
regular member inspections.
As a result of the inspections of special member firms, 9 violated
items were discovered at a total of 14 institutions (legal violations at
4 institutions, self-regulatory violations at 11 institutions, both at 1
institution). No violation was discovered at a total of 56 special
member firms.
12
Annual Report 2006
Annual Report 2006
13
Strengthening Inspection System
Items Inspected in Fiscal 2005
JSDA conducts onsite inspections of the operations of its
members at regular intervals to ensure they are observing laws,
regulations and self-regulatory rules, and also to check their internal
administrative systems.
Compliance with suitability principle
Sales activities by unregistered and unqualified personnel
Segregation of client assets
Compliance with the laws and rules concerning off-exchange transactions
Compliance with the laws and rules concerning Green Sheet Issue transactions
(1) Inspections of Regular Members
Undertaking transactions using a fictitious name and lending or borrowing of a
Guided by fiscal 2004 results, JSDA inspected 102 regular
member firms on-site in fiscal 2005. Emphasis was placed on (i )
segregation of client assets, (ii) registration of sales representatives,
(iii) compliance with laws and regulations, (iv) compliance with
“suitability principles”, and (v) expansion and strengthening of the
internal administration system. Of the inspected regular members, 46
members that are also market participants of stock exchanges in
Japan were inspected jointly with stock exchanges. Through this joint
inspections system, JSDA and stock exchanges aim to implement
effective inspections and remove the burden of duplicated inspections
on the companies.
As a result of the inspections of regular member firms, 27
violated items were discovered at a total of 57 companies (legal
violations at 47 firms, self-regulatory violations at 27 firms, both at
17 firms). No violation was discovered at a total of 45 regular
member firms. Of the 57 firms found to have regulatory violations, 1
firm was given warnings and required to strengthen their internal
administration systems.
In addition, at the request of the Tokyo, Osaka, and Jasdaq stock
exchanges, JSDA cooperated in investigations into stock transactions
of 222 issues at a total of 720 securities firms.
name or address
Unapproved buying and selling
Lending and borrowing of cash or securities to or from clients
Compliance with laws and regulations on soliciting investment and managing
customers, etc.
Compliance with other laws and regulations on other forbidden practices
Internal administration practices
Regulated capital-adequacy ratio*
Property*
(Note) Items marked with an asterisk are not included in the inspection of special members.
However, special members are also inspected for items not included in regular member inspections:
(1) investment solicitation with an offer of special advantages for financing, etc., (2) measures to
ensure customers understand the differences between securities and cash deposits, and (3)
automatic credit provision.
(2) Inspections of Special Members
JSDA conducts inspections of special members such as banks,
trust banks, credit banks (shinkin banks) and insurance companies
either on-the-spot or through document-based inspections. In the
fiscal 2005, JSDA inspected 62 institutions on-site, and 8 others
based on documents with emphasis placed on the same items as
regular member inspections.
As a result of the inspections of special member firms, 9 violated
items were discovered at a total of 14 institutions (legal violations at
4 institutions, self-regulatory violations at 11 institutions, both at 1
institution). No violation was discovered at a total of 56 special
member firms.
12
Annual Report 2006
Annual Report 2006
13
Stock Market
(1) Revision of Stock Distribution Rules
JSDA has continued to address the issue of the distribution of
new issues of shares, etc., to customers in order to promote smooth
absorption by the broad range of investors and ensure the fair
distribution to customers by underwriters. To that end, JSDA has put
in place regulations requiring its members to create and make public
internal rules and other measures regarding their book building
method and distribution. JSDA has also made sure that these rules
and measures were actually followed.
However, along with the growing popularity since 2004 of IPOs
among individual and other investors, there have been many
complaints that the distribution process is not transparent and that
unfair practices, such as tying the IPO shares to other products, exist
in the market.
In response, in February 2005, JSDA formed a working group
that discussed the method of deciding distribution as well as the
method of price setting. The results of those deliberations were made
public in report issued in November 2005. Based on this report, in
January 2006, JSDA reformed the pertinent resolution of the Board
of Governors. The revised resolution requires that a lottery system be
introduced to the distribution for IPO shares and that JSDA members
explain their distribution policy in writing to investors as specifically
and clearly as possible. The revised resolution will be enforced in July
2006.
14
Annual Report 2006
(2) Revision of the Regulations governing OTC
Handled Securities Issued by Listed Companies
JSDA's regulations classified unlisted preferred shares and other
unlisted securities issued by listed companies as OTC Handled
Securities, and forbade JSDA members from soliciting investment in
these unlisted securities.
However, large volumes of unlisted preferred shares, which were
mainly issued by banks in the past, were sold to investors. For that
reason, sell needs have arisen among investors that received
allotments of such unlisted preferred shares issued by listed
companies.
In addition, opinions were expressed to the effect that it would be
a sounder market if securities companies were able to properly solicit
investment in such unlisted securities rather than leaving investors to
find counterparties on their own.
In consideration of these conditions, JSDA set up a working group
in September 2005, and carried out investigations. Based on the
results of the working group's discussions, JSDA revised its
regulations in March 2006. Members of JSDA are now allowed to
solicit investment in OTC Handled Securities issued by listed
companies that carry out business disclosure. JSDA members are
required, however, to provide adequate explanation of the features of
these OTC Handled Securities to their customers. The revisions were
enforced in April 2006.
(3) Revision of the Green Sheet System
In April 2005, along with the change in the categorization of
Green Sheet Issues under the Securities and Exchange Law, JSDA
made the necessary changes in its related regulations.
Moreover, JSDA made revisions in the designating criteria for the
Phoenix issue system, which was established as a place to liquidate
delisted issues, including in the criteria such items as establishment
of business disclosure system and improvement of reporting
shortcomings. This action was taken in response to increase in issues
delisted during 2005 due to window dressing of business
performance, etc., a situation that had been relatively rare
previously. Furthermore, JSDA revised the criteria for moving an
issue from the Emerging Section, which mainly comprises venture
company-related issues, to the Ordinary Section, which comprises
other issues, including sales amount and operating income as factors
to consider in addition to the previous recurring income standard.
These revisions were enforced in April 2006.
At March 31, 2006, there were a total of 89 issues being traded
in the Green Sheet system, centered on the Emerging Section.
Annual Report 2006
15
Stock Market
(1) Revision of Stock Distribution Rules
JSDA has continued to address the issue of the distribution of
new issues of shares, etc., to customers in order to promote smooth
absorption by the broad range of investors and ensure the fair
distribution to customers by underwriters. To that end, JSDA has put
in place regulations requiring its members to create and make public
internal rules and other measures regarding their book building
method and distribution. JSDA has also made sure that these rules
and measures were actually followed.
However, along with the growing popularity since 2004 of IPOs
among individual and other investors, there have been many
complaints that the distribution process is not transparent and that
unfair practices, such as tying the IPO shares to other products, exist
in the market.
In response, in February 2005, JSDA formed a working group
that discussed the method of deciding distribution as well as the
method of price setting. The results of those deliberations were made
public in report issued in November 2005. Based on this report, in
January 2006, JSDA reformed the pertinent resolution of the Board
of Governors. The revised resolution requires that a lottery system be
introduced to the distribution for IPO shares and that JSDA members
explain their distribution policy in writing to investors as specifically
and clearly as possible. The revised resolution will be enforced in July
2006.
14
Annual Report 2006
(2) Revision of the Regulations governing OTC
Handled Securities Issued by Listed Companies
JSDA's regulations classified unlisted preferred shares and other
unlisted securities issued by listed companies as OTC Handled
Securities, and forbade JSDA members from soliciting investment in
these unlisted securities.
However, large volumes of unlisted preferred shares, which were
mainly issued by banks in the past, were sold to investors. For that
reason, sell needs have arisen among investors that received
allotments of such unlisted preferred shares issued by listed
companies.
In addition, opinions were expressed to the effect that it would be
a sounder market if securities companies were able to properly solicit
investment in such unlisted securities rather than leaving investors to
find counterparties on their own.
In consideration of these conditions, JSDA set up a working group
in September 2005, and carried out investigations. Based on the
results of the working group's discussions, JSDA revised its
regulations in March 2006. Members of JSDA are now allowed to
solicit investment in OTC Handled Securities issued by listed
companies that carry out business disclosure. JSDA members are
required, however, to provide adequate explanation of the features of
these OTC Handled Securities to their customers. The revisions were
enforced in April 2006.
(3) Revision of the Green Sheet System
In April 2005, along with the change in the categorization of
Green Sheet Issues under the Securities and Exchange Law, JSDA
made the necessary changes in its related regulations.
Moreover, JSDA made revisions in the designating criteria for the
Phoenix issue system, which was established as a place to liquidate
delisted issues, including in the criteria such items as establishment
of business disclosure system and improvement of reporting
shortcomings. This action was taken in response to increase in issues
delisted during 2005 due to window dressing of business
performance, etc., a situation that had been relatively rare
previously. Furthermore, JSDA revised the criteria for moving an
issue from the Emerging Section, which mainly comprises venture
company-related issues, to the Ordinary Section, which comprises
other issues, including sales amount and operating income as factors
to consider in addition to the previous recurring income standard.
These revisions were enforced in April 2006.
At March 31, 2006, there were a total of 89 issues being traded
in the Green Sheet system, centered on the Emerging Section.
Annual Report 2006
15
Bond Market
(1) Establishment of Market Practices for Shift to a
Book-Entry Settlement System for Corporate
and Municipal Bonds
In preparation for the start of a book-entry settlement system for
corporate and municipal bonds in January 2006, JSDA produced
Book-Entry Settlement Guidelines for Corporate and Municipal Bonds
to provide guidance for market practices to be followed by market
participants. JSDA took this action to reduce settlement risk under
the new system and promote smooth settlements.
Settlement System Reform Timeline
January 2001
• RTGS-based DVP settlement for JGBs commenced.
January 2003
• Paperless book-entry system (electronic) for JGBs implemented.
• Japan Securities Clearing Corporation started operations (clearing equities, etc. transactions between
securities companies).
March 2003
• Paperless book-entry system for short-term corporate debentures (electronic CP) started.
May 2004
• General book-entry transfer DVP system for equities began (linked to JASDEC's pre-settlement
matching system).
• JASDEC DVP Clearing Corporation started operations (clearing of equities, etc. transactions among
(2) Introduction of Prepayment Standard
Japan: PSJ Model
A dramatic expansion of the mortgage backed securities (MBS)
market is being hoped for in Japan. JSDA responded to these
expectations by starting a working group in November 2005 to study
the establishment of necessary infrastructure. The working group
decided on two actions to be taken in fiscal 2006 to promote the
establishment of necessary infrastructure for the market. The first
action was the creation of a Prepayment Standard Japan (PSJ) model
to provide a common benchmark for market participants regarding
the redemption of MBS before maturity. The second action was
publication of PSJ projected statistical figures and other steps to
promote the spread and use of the PSJ model.
securities companies and institutional investors)
February 2005
• JGB transaction matching got under way in the JASDEC's pre-settlement matching system.
May 2005
• Japan Government Bond Clearing Corporation started operations (linked to JASDEC's pre-settlement
matching system).
January 2006
• Paperless book-entry system (electronic) for corporate and municipal bonds began.
• Pre-settlement matching for corporate and municipal bonds and short-term corporate debentures
got under way in the JASDEC's pre-settlement matching system.
January 2007
• Paperless book-entry system (electronic) for investment trust beneficiary certificates is scheduled to
start.
By June 2009
16
Annual Report 2006
• Paperless book-entry system (electronic) for equities is scheduled to start.
(3) Securitization Trend Survey
Commencing at the end of May 2004, the Bank of Japan (BOJ)
began a Survey of Trends in the Securitization Market to take a look
at securitized products backed by domestic assets. BOJ summarized
different categories of securities and issuance programs in the
survey, and announced its results. However, this survey was only
conducted for a limited period, and ended in March 2006. Because of
its role as a information infrastructure contributing to smooth and
efficient securitized product transactions, JSDA recognized that the
continuation of a survey on the securitization market, which is still in
its development stage, would be in the best interests of a wide-range
of market participants. Consequently, in December 2005, JSDA
decided to continue the survey jointly with the Japanese Bankers
Association, beginning with the fiscal year starting April 2006. The
survey results will be made public on the JDSA's web site.
Annual Report 2006
17
Bond Market
(1) Establishment of Market Practices for Shift to a
Book-Entry Settlement System for Corporate
and Municipal Bonds
In preparation for the start of a book-entry settlement system for
corporate and municipal bonds in January 2006, JSDA produced
Book-Entry Settlement Guidelines for Corporate and Municipal Bonds
to provide guidance for market practices to be followed by market
participants. JSDA took this action to reduce settlement risk under
the new system and promote smooth settlements.
Settlement System Reform Timeline
January 2001
• RTGS-based DVP settlement for JGBs commenced.
January 2003
• Paperless book-entry system (electronic) for JGBs implemented.
• Japan Securities Clearing Corporation started operations (clearing equities, etc. transactions between
securities companies).
March 2003
• Paperless book-entry system for short-term corporate debentures (electronic CP) started.
May 2004
• General book-entry transfer DVP system for equities began (linked to JASDEC's pre-settlement
matching system).
• JASDEC DVP Clearing Corporation started operations (clearing of equities, etc. transactions among
(2) Introduction of Prepayment Standard
Japan: PSJ Model
A dramatic expansion of the mortgage backed securities (MBS)
market is being hoped for in Japan. JSDA responded to these
expectations by starting a working group in November 2005 to study
the establishment of necessary infrastructure. The working group
decided on two actions to be taken in fiscal 2006 to promote the
establishment of necessary infrastructure for the market. The first
action was the creation of a Prepayment Standard Japan (PSJ) model
to provide a common benchmark for market participants regarding
the redemption of MBS before maturity. The second action was
publication of PSJ projected statistical figures and other steps to
promote the spread and use of the PSJ model.
securities companies and institutional investors)
February 2005
• JGB transaction matching got under way in the JASDEC's pre-settlement matching system.
May 2005
• Japan Government Bond Clearing Corporation started operations (linked to JASDEC's pre-settlement
matching system).
January 2006
• Paperless book-entry system (electronic) for corporate and municipal bonds began.
• Pre-settlement matching for corporate and municipal bonds and short-term corporate debentures
got under way in the JASDEC's pre-settlement matching system.
January 2007
• Paperless book-entry system (electronic) for investment trust beneficiary certificates is scheduled to
start.
By June 2009
16
Annual Report 2006
• Paperless book-entry system (electronic) for equities is scheduled to start.
(3) Securitization Trend Survey
Commencing at the end of May 2004, the Bank of Japan (BOJ)
began a Survey of Trends in the Securitization Market to take a look
at securitized products backed by domestic assets. BOJ summarized
different categories of securities and issuance programs in the
survey, and announced its results. However, this survey was only
conducted for a limited period, and ended in March 2006. Because of
its role as a information infrastructure contributing to smooth and
efficient securitized product transactions, JSDA recognized that the
continuation of a survey on the securitization market, which is still in
its development stage, would be in the best interests of a wide-range
of market participants. Consequently, in December 2005, JSDA
decided to continue the survey jointly with the Japanese Bankers
Association, beginning with the fiscal year starting April 2006. The
survey results will be made public on the JDSA's web site.
Annual Report 2006
17
Training Courses in Fiscal 2005
1. Seminar for company representatives
2. Training for executives
3. Training for internal administration supervisors
4. Training for internal administration assistant supervisors
5. Training for internal administrators
6. Training for sales managers
7. Compliance practice course
8. Securities Business Seminar
9. Seminar for accounting staff
10. Seminar for international securities business
Training System
11. Compliance seminar for sales staff
Based on a training program drawn up annually, JSDA provides
training courses for executive officers and employees of member
firms. The association also flexibly conducts training courses other
than those included in the program in response to amendments of
laws and institutional reform.
In fiscal 2005, JSDA held training courses with an emphasis on
further improving the quality of executive officers and employees of
member firms, and thereby contributing to building greater
confidence in securities industry among investors. Continuing on
from fiscal 2004, the chief point of the training courses was to help
member firms reinforce compliance. A total of 8,044 people
participated in these courses, 1,476 people more than in the previous
fiscal year.
In addition to the regularly offered Compliance Practice Course,
which is mainly targeted at employees in charge of compliance
departments for member firms, JSDA offered the Compliance
Seminar for Sales Staff as a new course in fiscal 2005. It primarily
targets retail sales staff and aims to promote deeper understanding
of the key points to bear in mind regarding compliance.
To contribute to strengthening the compliance system and
enhancing internal training in member firms, JSDA compiled and
distributed a collection of rulebooks on laws and regulations to be
used as reference material in internal training courses. In addition,
the association provided summaries and training materials on
compliance-related themes from among its training themes for the
fiscal year. Moreover, it dispatched or introduced JSDA executive
officers and employees and tax accountants and other specialists to
act as lecturers at 40 in-house training sessions of member firms
during the fiscal year.
18
Annual Report 2006
Investor Education
(1) Activities of the Project for Dissemination
of Securities Knowledge
The securities industry formed the Project for Dissemination of
Securities Knowledge to create a cross-market organization to
promote investor education on a continuing basis over the long term.
Comprising such securities-related organizations as JSDA, the Tokyo
Stock Exchange, and The Investment Trust Association, the project is
carrying out a variety of investor education activities on a cooperative
basis. The following are the main activities.
• Providing educational materials for middle and high school
students
• Offering a Stock Market Game for middle and high school
students
• Running internship programs for teachers at all school levels
• Preparing to establish an introductory course about securities
investment at the University of the Air
• Holding events on Securities Investment Day (October 4th)
• Holding Securities Investment Seminars as a spring event
Annual Report 2006
19
Training Courses in Fiscal 2005
1. Seminar for company representatives
2. Training for executives
3. Training for internal administration supervisors
4. Training for internal administration assistant supervisors
5. Training for internal administrators
6. Training for sales managers
7. Compliance practice course
8. Securities Business Seminar
9. Seminar for accounting staff
10. Seminar for international securities business
Training System
11. Compliance seminar for sales staff
Based on a training program drawn up annually, JSDA provides
training courses for executive officers and employees of member
firms. The association also flexibly conducts training courses other
than those included in the program in response to amendments of
laws and institutional reform.
In fiscal 2005, JSDA held training courses with an emphasis on
further improving the quality of executive officers and employees of
member firms, and thereby contributing to building greater
confidence in securities industry among investors. Continuing on
from fiscal 2004, the chief point of the training courses was to help
member firms reinforce compliance. A total of 8,044 people
participated in these courses, 1,476 people more than in the previous
fiscal year.
In addition to the regularly offered Compliance Practice Course,
which is mainly targeted at employees in charge of compliance
departments for member firms, JSDA offered the Compliance
Seminar for Sales Staff as a new course in fiscal 2005. It primarily
targets retail sales staff and aims to promote deeper understanding
of the key points to bear in mind regarding compliance.
To contribute to strengthening the compliance system and
enhancing internal training in member firms, JSDA compiled and
distributed a collection of rulebooks on laws and regulations to be
used as reference material in internal training courses. In addition,
the association provided summaries and training materials on
compliance-related themes from among its training themes for the
fiscal year. Moreover, it dispatched or introduced JSDA executive
officers and employees and tax accountants and other specialists to
act as lecturers at 40 in-house training sessions of member firms
during the fiscal year.
18
Annual Report 2006
Investor Education
(1) Activities of the Project for Dissemination
of Securities Knowledge
The securities industry formed the Project for Dissemination of
Securities Knowledge to create a cross-market organization to
promote investor education on a continuing basis over the long term.
Comprising such securities-related organizations as JSDA, the Tokyo
Stock Exchange, and The Investment Trust Association, the project is
carrying out a variety of investor education activities on a cooperative
basis. The following are the main activities.
• Providing educational materials for middle and high school
students
• Offering a Stock Market Game for middle and high school
students
• Running internship programs for teachers at all school levels
• Preparing to establish an introductory course about securities
investment at the University of the Air
• Holding events on Securities Investment Day (October 4th)
• Holding Securities Investment Seminars as a spring event
Annual Report 2006
19
(i) Survey of Teachers Regarding Economics and Financial Education
From August 2004 to February 2005, in conjunction with an
NPO Liaison Council comprised of securities-related NPOs, JSDA
undertook a survey based on face-to-face interviews on economics
and financial education in the school system. A report was issued
in May 2005.
(ii) Study Group on Individual Investors
To determine recommendations for the reform of Japan’s
financial system and for the strengthening of securities markets, a
study group on individual investors was established in October
2004 as an advisory group to JSDA’s Chairman. The study group
produced a report in September 2005.
(iii) Council on the Model of Economic and Financial Education in
the Public Education System
In February 2005, JSDA formed the Council on the Model of
Economic and Financial Education in the Public Education
System. The council deliberated the various measures to remove
obstacles to establishing a teaching system for economics and
financial education in middle and high schools. The council tabled
its report in October 2005.
JSDA Organizational Reform
JSDA has traditionally addressed the issue of investor education, but with the shift in
policy from savings to investment, the need to increase the public’s understanding of
securities and investment has heightened. Against this backdrop, we set up the Institute for
Securities Education and Public Relations, and integrated the functions of the Japan Institute
for Securities Information and Public Relations, which was carrying out the same operations
as a separate body. Through the integration, JSDA is aiming to expand and strengthen its
efforts to educate and enlighten the public about securities and investment, to disseminate
related knowledge and to promote more effective and efficient operations.
In July 2005, we established a Sales Representative Examination Monitoring Office to
daily monitor revisions in laws and regulations and maintain the appropriateness of JSDA’s
qualification examinations. In addition, in October, we set up a Legal Office to administer
JSDA’s Articles of Association and rules and to establish and promote an in-house legal
compliance system in JSDA. Also in October, we established an Organization Planning Office
to design the structure of our organization in response to changes in the environment, such
as the introduction of the new Financial Instruments and Exchange Law.
(2) Other Investor Education Activities
Establishment of the Securities Market
Infrastructure Reinforcement Fund
International Activities
After the execution in December 2005 of a large erroneous
commissioned trade order for newly listed J-Com Co. Ltd., JSDA
investigated setting up a contribution scheme that would make use of
the windfall profits made on the proprietary trading of J-Com stocks
by securities companies. As a result, in January 2006, JSDA
established the Securities Market Infrastructure Reinforcement Fund.
The fund was set up in light of the loss of investor confidence in
securities companies and the securities market because of erroneous
orders and system troubles. It will be used to improve and strengthen
trading system infrastructure aimed at reinstating and improving
investor confidence and stimulation of securities markets.
20
Annual Report 2006
(1) International Conferences
In April 2005, JSDA participated in the annual
conference of the International Organization of
Securities Commissions (IOSCO) as an affiliate
member. Moreover, throughout the year, JSDA
participated in and cooperated with the IOSCO’s
activities as a member of the SRO Consultative
Committee, a sub-committee of the IOSCO, by
responding to public comments and engaging in
other activities.
In May 2005, JSDA participated in the 18th
annual general meeting of the International Council
of Securities Associations (ICSA). During the
meeting, JSDA participated in discussion of issues
regarding international securities markets by
reporting in the session of “The Future for SROs and
Trade Associations in Financial Services”. In
addition, JSDA exchanged opinions with other
participating groups on such issues as governance of
market infrastructures, methods of introducing
securities regulations, and the impact of pension
reform on the securities market.
(2) ASF Seminar
In March 2006, JSDA hosted an Asia Securities
Forum (ASF) seminar in Tokyo. JSDA, which acts as
the permanent secretariat of the ASF, proposed the
seminar as a method of nurturing and developing
securities markets in the Asian region. The seminar
was realized with the support of Japan’s Ministry of
Finance and others. In addition to JSDA, other
securities-related organizations, regulatory bodies,
and securities companies also provided training
during the seminar. The participants in the seminar
mainly comprised officers and employees of
securities-related organizations in Asian countries.
Annual Report 2006
21
(i) Survey of Teachers Regarding Economics and Financial Education
From August 2004 to February 2005, in conjunction with an
NPO Liaison Council comprised of securities-related NPOs, JSDA
undertook a survey based on face-to-face interviews on economics
and financial education in the school system. A report was issued
in May 2005.
(ii) Study Group on Individual Investors
To determine recommendations for the reform of Japan’s
financial system and for the strengthening of securities markets, a
study group on individual investors was established in October
2004 as an advisory group to JSDA’s Chairman. The study group
produced a report in September 2005.
(iii) Council on the Model of Economic and Financial Education in
the Public Education System
In February 2005, JSDA formed the Council on the Model of
Economic and Financial Education in the Public Education
System. The council deliberated the various measures to remove
obstacles to establishing a teaching system for economics and
financial education in middle and high schools. The council tabled
its report in October 2005.
JSDA Organizational Reform
JSDA has traditionally addressed the issue of investor education, but with the shift in
policy from savings to investment, the need to increase the public’s understanding of
securities and investment has heightened. Against this backdrop, we set up the Institute for
Securities Education and Public Relations, and integrated the functions of the Japan Institute
for Securities Information and Public Relations, which was carrying out the same operations
as a separate body. Through the integration, JSDA is aiming to expand and strengthen its
efforts to educate and enlighten the public about securities and investment, to disseminate
related knowledge and to promote more effective and efficient operations.
In July 2005, we established a Sales Representative Examination Monitoring Office to
daily monitor revisions in laws and regulations and maintain the appropriateness of JSDA’s
qualification examinations. In addition, in October, we set up a Legal Office to administer
JSDA’s Articles of Association and rules and to establish and promote an in-house legal
compliance system in JSDA. Also in October, we established an Organization Planning Office
to design the structure of our organization in response to changes in the environment, such
as the introduction of the new Financial Instruments and Exchange Law.
(2) Other Investor Education Activities
Establishment of the Securities Market
Infrastructure Reinforcement Fund
International Activities
After the execution in December 2005 of a large erroneous
commissioned trade order for newly listed J-Com Co. Ltd., JSDA
investigated setting up a contribution scheme that would make use of
the windfall profits made on the proprietary trading of J-Com stocks
by securities companies. As a result, in January 2006, JSDA
established the Securities Market Infrastructure Reinforcement Fund.
The fund was set up in light of the loss of investor confidence in
securities companies and the securities market because of erroneous
orders and system troubles. It will be used to improve and strengthen
trading system infrastructure aimed at reinstating and improving
investor confidence and stimulation of securities markets.
20
Annual Report 2006
(1) International Conferences
In April 2005, JSDA participated in the annual
conference of the International Organization of
Securities Commissions (IOSCO) as an affiliate
member. Moreover, throughout the year, JSDA
participated in and cooperated with the IOSCO’s
activities as a member of the SRO Consultative
Committee, a sub-committee of the IOSCO, by
responding to public comments and engaging in
other activities.
In May 2005, JSDA participated in the 18th
annual general meeting of the International Council
of Securities Associations (ICSA). During the
meeting, JSDA participated in discussion of issues
regarding international securities markets by
reporting in the session of “The Future for SROs and
Trade Associations in Financial Services”. In
addition, JSDA exchanged opinions with other
participating groups on such issues as governance of
market infrastructures, methods of introducing
securities regulations, and the impact of pension
reform on the securities market.
(2) ASF Seminar
In March 2006, JSDA hosted an Asia Securities
Forum (ASF) seminar in Tokyo. JSDA, which acts as
the permanent secretariat of the ASF, proposed the
seminar as a method of nurturing and developing
securities markets in the Asian region. The seminar
was realized with the support of Japan’s Ministry of
Finance and others. In addition to JSDA, other
securities-related organizations, regulatory bodies,
and securities companies also provided training
during the seminar. The participants in the seminar
mainly comprised officers and employees of
securities-related organizations in Asian countries.
Annual Report 2006
21
Regular Members
Membership
289 Members as of the end of Fiscal 2005
While 30 new members enrolled in fiscal 2005, 8 members
withdrew as a result of mergers or for other reasons. The breakdown
includes 249 domestic securities companies and 40 foreign securities
companies.
Foreign regular member companies accounted for 14% of regular
membership. The United States has the greatest number of firms with
16, followed by the United Kingdom with 7, France with 5, Germany
and Canada with 3, Switzerland with 2 and the Netherlands, Belgium,
Australia and the Republic of Korea with 1 each.
The total number of employees of JSDA regular members was
87,913 at the end of December 2005. The number had continued to
decline from a peak of 167,000 at the end of June 1991 until 2003.
After that, it began to increase. The number of offices of JSDA
regular members at the end of March 2006 was 2,127, up by about
2.4% from the previous year due to branches established in the
premises of banks or other reasons. This figure exceeded that of the
previous year for the second consecutive year.
JSDA consists of regular members and special members. Regular
members comprise all domestic and foreign securities companies
with securities business registration in Japan. Banks and other
financial institutions registered by the commissioner of the FSA
under Article 65-2 of the Securities and Exchange Law are special
members of the Association.
Offices of
Regular Members
Regular Members
Enrollment
Withdrawal
Enployees of
Regular Members
Sales Representatives of
Regular Members
Number of Regular Members
80,000
10,0000
50
300
3,000
94,464
72,754
87,455
85,027
86,406
87,913
290
60,000
2,103
2,000
2,040
2,077
2,127
281
60,000
30
280
30
27
40,000
23
22
19
67,539
69,298
2,249
289
20
71,965
68,769
80,000
290
40
Membership
Twenty-two more regular members and four
more special members (Total members: 508)
40,000
270
18
267
1,000
266
20,000
10
20,000
260
8
7
8
6
0
250
2002
2003
2004
2005
2006
2002
2003
2004
2005
2006
2002
2003
2003
2004
2005
2002
2003
2003
2004
2005
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Dec.
Dec.
Dec.
Mar.
Mar.
Dec.
Dec.
Dec.
(Note) Effective with fiscal 2003, the number of employees and sales representatives is being reported as of the end of June and December. The data
for fiscal 2003 and thereafter are figures as of end of December respectively.
22
Annual Report 2006
Annual Report 2006
23
Regular Members
Membership
289 Members as of the end of Fiscal 2005
While 30 new members enrolled in fiscal 2005, 8 members
withdrew as a result of mergers or for other reasons. The breakdown
includes 249 domestic securities companies and 40 foreign securities
companies.
Foreign regular member companies accounted for 14% of regular
membership. The United States has the greatest number of firms with
16, followed by the United Kingdom with 7, France with 5, Germany
and Canada with 3, Switzerland with 2 and the Netherlands, Belgium,
Australia and the Republic of Korea with 1 each.
The total number of employees of JSDA regular members was
87,913 at the end of December 2005. The number had continued to
decline from a peak of 167,000 at the end of June 1991 until 2003.
After that, it began to increase. The number of offices of JSDA
regular members at the end of March 2006 was 2,127, up by about
2.4% from the previous year due to branches established in the
premises of banks or other reasons. This figure exceeded that of the
previous year for the second consecutive year.
JSDA consists of regular members and special members. Regular
members comprise all domestic and foreign securities companies
with securities business registration in Japan. Banks and other
financial institutions registered by the commissioner of the FSA
under Article 65-2 of the Securities and Exchange Law are special
members of the Association.
Offices of
Regular Members
Regular Members
Enrollment
Withdrawal
Enployees of
Regular Members
Regular Members
Number of Regular Members
80,000
10,0000
50
300
3,000
94,464
72,754
87,455
85,027
86,406
87,913
290
60,000
2,103
2,000
2,040
2,077
2,127
281
60,000
30
280
30
27
40,000
23
22
19
67,539
69,298
2,249
289
20
71,965
68,769
80,000
290
40
Membership
Twenty-two more regular members and four
more special members (Total members: 508)
40,000
270
18
267
1,000
266
20,000
10
20,000
260
8
7
8
6
0
250
2002
2003
2004
2005
2006
2002
2003
2004
2005
2006
2002
2003
2003
2004
2005
2002
2003
2003
2004
2005
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Dec.
Dec.
Dec.
Mar.
Mar.
Dec.
Dec.
Dec.
(Note) Effective with fiscal 2003, the number of employees and sales representatives is being reported as of the end of June and December. The data
for fiscal 2003 and thereafter are figures as of end of December respectively.
22
Annual Report 2006
Annual Report 2006
23
Special Members
Enrollment
Withdrawal
Number of Special Members
260
16
Special Members
14
250
14
219 Special Members as of the end of Fiscal 2005
During fiscal 2005, 9 financial institutions joined JSDA as special
members, and 6 institutions lost their membership as a result of
mergers or for other reasons. A breakdown shows that 183 banks
account for 83.6% of this total, while insurance companies, money
market dealers and securities finance companies constitute 13.2%,
1.4% and 0.5%, respectively. Credit cooperatives and Japan Post
jointed JSDA in fiscal 2005 as members from new categories in the
financial services industry.
12
10
240
12
231
230
9
8
220
222
7
219
216
215
6
6
210
5
200
4
3
3
2
2
190
1
180
0
2002
2003
2004
2005
2006
Mar.
Mar.
Mar.
Mar.
Mar.
400,000
Special Member
Composition
Membership
Special Members
150
376,668
365,887
366,761
359,358
345,393
300,000
120
90
60
200,000
30
0
100,000
2002
2003
2003
2004
2005
Mar.
Mar.
Dec.
Dec.
Dec.
Banks
Shinkin banks
Life insurers
Trust banks
Non-life insurers
Money market dealers
Government-related financials
Credit Corporatives
Securities finance companies
Japan Post
(Note) Effective with fiscal 2003, the number of sales representatives is
being reported as of the end of June and December. The data for fiscal
2003 and thereafter are figures as of end of December respectively.
24
Annual Report 2006
Annual Report 2006
25
Special Members
Enrollment
Withdrawal
Number of Special Members
260
16
Special Members
14
250
14
219 Special Members as of the end of Fiscal 2005
During fiscal 2005, 9 financial institutions joined JSDA as special
members, and 6 institutions lost their membership as a result of
mergers or for other reasons. A breakdown shows that 183 banks
account for 83.6% of this total, while insurance companies, money
market dealers and securities finance companies constitute 13.2%,
1.4% and 0.5%, respectively. Credit cooperatives and Japan Post
jointed JSDA in fiscal 2005 as members from new categories in the
financial services industry.
12
10
240
12
231
230
9
8
220
222
7
219
216
215
6
6
210
5
200
4
3
3
2
2
190
1
180
0
2002
2003
2004
2005
2006
Mar.
Mar.
Mar.
Mar.
Mar.
400,000
Special Member
Composition
Membership
Special Members
150
376,668
365,887
366,761
359,358
345,393
300,000
120
90
60
200,000
30
0
100,000
2002
2003
2003
2004
2005
Mar.
Mar.
Dec.
Dec.
Dec.
Banks
Shinkin banks
Life insurers
Trust banks
Non-life insurers
Money market dealers
Government-related financials
Credit Corporatives
Securities finance companies
Japan Post
(Note) Effective with fiscal 2003, the number of sales representatives is
being reported as of the end of June and December. The data for fiscal
2003 and thereafter are figures as of end of December respectively.
24
Annual Report 2006
Annual Report 2006
25
Data of JSDA
Revenues and Expenses Statement
(Fiscal 2005)
■ Revenues
■ Expenses
Millions of
yen
Thousands of
U.S. dollars
Fixed membership fees:
■ Assets
■ Liabilities
Millions of
yen
Cash
Deposits
Loans
Prepayments
Accrued revenue
Subtotal
Thousands of
U.S. dollars
$19
Deposits received
¥51
$434
¥2,413
$20,506
Unearned income
¥0
$0
¥427
$3,632
¥0
$2
¥165
$1,399
¥3,007
$25,558
Accrued retirement benefits
¥1,692
$14,382
Surplus income incurrent fiscal year
¥1,264
$10,742
Subtotal
Deposits
$0
Accrued revenue
¥2
$20
Subtotal
¥5,244
$44,568
¥260
$2,211
¥5,615
¥12
$924
¥0
Guaranty money deposits
Subtotal
Subtotal
TOTAL ASSETS
¥24
$203
¥2,706
$23,001
¥2,730
¥11,352
¥5,615
$103
$1,986
Securities statistical services
¥56
$478
$1,857
Registration of sales representatives
¥37
$318
Proportional fees based on mini-branches ¥19
$164
¥2,730
$23,204
Subtotal
¥2,730
$23,204
$23,204
$96,485
$96,485
¥1,108
$9,414
Examination of regular members
¥19
$161
$5,647
Securities Mediation and Consultation Center
¥31
$267
¥474
$4,032
Training and education
¥35
$300
Floating rate fees:
Surveys
¥36
$306
Proportional fees based on stock trading amounts
Special account for Institute for Securiteis Education & Public Relations
¥2,219
$7,998
Proportional fees based on operating revenue
Total membership fees
¥343
$2,917
NPO operational support
¥50
$425
Association members' interaction promotion
¥11
$94
Total operating expenses
¥2,442
$20,754
Compensation and salaries
¥2,737
$23,260
¥372
$3,165
$18,862
Proportional fees based on bond trading amounts
¥1,161
$9,869
¥5,932
$50,416
Social security and welfare benefits
Representative registration fees
¥14
$123
Payments of accrued retirement benefits ¥274
$2,329
¥48
$405
¥300
$2,547
¥1,650
$14,027
Conferences and meetings
¥26
$224
¥18
$153
Travel and transportation
¥43
$363
Communication and information
Qualification examination
Other net results from activities
¥11,352
¥664
Proportional fees based on capital
$47,723
$47,723
Training fund under management:
Securities
$47,620
Training fund
TOTAL LIABILITIES
Deposits
¥5,603
$6,075
¥219
Guarantee deposits received for general fund
¥109
Prepayments
Securities
$25,558
¥715
¥234
¥941
General fund
General fund under management:
¥3,007
Market operational services
Proportional fees based on branches
Thousands of
U.S. dollars
¥2
Thousands of
U.S. dollars
Fixed fees
Proportional fees based on registered representatives
Millions of
yen
Millions of
yen
¥46
$391
¥171
$1,453
Investment income
¥275
$2,334
Printing
¥31
$262
Revenues from special members
¥232
$1,972
Research and education
¥56
$474
Subsidies
Other revenues
Reversal of accrued retirement benefits
TOTAL REVENUES
¥11
$96
¥274
$2,329
¥8,500
$72,246
Entertainment
¥4
$34
¥526
$4,473
Taxes and public charges
¥53
$449
Miscellaneous
¥18
$156
Office rent and others
Social contribution
¥43
$367
¥140
$1,194
Total of administrative expenses
¥4,795
$40,750
Subtotal
¥7,237
$61,504
Membership fees in various organizations
Offset for surplus income from current fiscal year
TOTAL EXPENSES
26
Annual Report 2006
¥1,264
$10,742
¥10,942
$93,000
Annual Report 2006
27
Data of JSDA
Balance Sheet
(as of the end of March 2006)
Data of JSDA
Revenues and Expenses Statement
(Fiscal 2005)
■ Revenues
■ Expenses
Millions of
yen
Thousands of
U.S. dollars
Fixed membership fees:
■ Assets
■ Liabilities
Millions of
yen
Cash
Deposits
Loans
Prepayments
Accrued revenue
Subtotal
Thousands of
U.S. dollars
$19
Deposits received
¥51
$434
¥2,413
$20,506
Unearned income
¥0
$0
¥427
$3,632
¥0
$2
¥165
$1,399
¥3,007
$25,558
¥1,692
$14,382
Surplus income incurrent fiscal year
¥1,264
$10,742
Subtotal
Deposits
$0
Accrued revenue
¥2
$20
Subtotal
¥5,244
$44,568
¥260
$2,211
¥5,615
¥12
$924
¥0
Guaranty money deposits
Subtotal
Subtotal
TOTAL ASSETS
¥24
$203
¥2,706
$23,001
¥2,730
¥11,352
¥5,615
$103
$1,986
Securities statistical services
¥56
$478
$1,857
Registration of sales representatives
¥37
$318
Proportional fees based on mini-branches ¥19
$164
¥2,730
$23,204
Subtotal
¥2,730
$23,204
$23,204
$96,485
$96,485
¥1,108
$9,414
Examination of regular members
¥19
$161
$5,647
¥31
$267
¥474
$4,032
¥35
$300
Floating rate fees:
Surveys
¥36
$306
Proportional fees based on stock trading amounts
Special account for Institute for Securiteis Education & Public Relations
¥2,219
$7,998
Proportional fees based on operating revenue
Total membership fees
¥343
$2,917
NPO operational support
¥50
$425
Association members' interaction promotion
¥11
$94
Total operating expenses
¥2,442
$20,754
Compensation and salaries
¥2,737
$23,260
¥372
$3,165
$18,862
Proportional fees based on bond trading amounts
¥1,161
$9,869
¥5,932
$50,416
Social security and welfare benefits
Representative registration fees
¥14
$123
Payments of accrued retirement benefits ¥274
$2,329
¥48
$405
¥300
$2,547
¥1,650
$14,027
Conferences and meetings
¥26
$224
¥18
$153
Travel and transportation
¥43
$363
Communication and information
Other net results from activities
¥11,352
¥664
Proportional fees based on capital
$47,723
$47,723
Training fund under management:
Securities
$47,620
Training fund
TOTAL LIABILITIES
Deposits
¥5,603
$6,075
¥219
Guarantee deposits received for general fund
¥109
Prepayments
Securities
$25,558
¥715
¥234
¥941
General fund
General fund under management:
¥3,007
Market operational services
Proportional fees based on branches
Thousands of
U.S. dollars
¥2
Thousands of
U.S. dollars
Fixed fees
Proportional fees based on registered representatives
Millions of
yen
Millions of
yen
¥46
$391
¥171
$1,453
Investment income
¥275
$2,334
Printing
¥31
$262
Revenues from special members
¥232
$1,972
Research and education
¥56
$474
Subsidies
Other revenues
Reversal of accrued retirement benefits
TOTAL REVENUES
¥11
$96
¥274
$2,329
¥8,500
$72,246
Entertainment
¥4
$34
¥526
$4,473
Taxes and public charges
¥53
$449
Miscellaneous
¥18
$156
Office rent and others
Social contribution
¥43
$367
¥140
$1,194
Total of administrative expenses
¥4,795
$40,750
Subtotal
¥7,237
$61,504
Membership fees in various organizations
Offset for surplus income from current fiscal year
TOTAL EXPENSES
26
Annual Report 2006
¥1,264
$10,742
¥10,942
$93,000
Annual Report 2006
27
Data of JSDA
Balance Sheet
Dispute Resolution in Fiscal 2005
Internet Transaction Survey
Requests for Mediation
158
Successful Settlement
66
Failure in Reaching Settlement
69
■ Number of Securities Firms Providing Internet Transactions
(Note) The amounts do not match due to cases carried over from fiscal 2004 or issues not concluded within fiscal 2005.
(Unit: companies)
Total Member
Firms
Consultation and Complaints in Fiscal 2005
Consultation
Complaints
Inquiry or Opinion regarding System of Transactions in Securities
7,368
Complaints about Solicitation
138
Complaints about Transactions
453
Complaints about Processing
264
Other Complaints
127
Total
Do Not Handle Internet Transactions
Making Preparations
Studying Plans
Have No Plans
Sep. 30, '03
268
55
20.5%
213
79.5%
2
0.7%
0
0.0%
211
78.7%
Mar. 31, '04
266
55
20.7%
211
79.3%
1
0.4%
3
1.1%
207
77.8%
Sep. 30, '04
265
53
20.0%
212
80.0%
1
0.4%
1
0.4%
210
79.2%
Mar. 31, '05
268
54
20.1%
214
79.9%
1
0.4%
3
1.1%
210
78.4%
Sep. 30, '05
276
56
20.3%
220
79.7%
0
0.0%
1
0.4%
219
79.3%
Mar. 31, '06
288
52
18.1%
236
81.9%
2
0.7%
11
3.8%
223
77.4%
■ Number of Internet Transaction Accounts
(Unit: accounts)
982
Number of Accounts
Change
Disciplinary Action in Fiscal 2005
Handle Internet
Transactions
Sep. 30, '03
Mar. 31, '04
Sep. 30, '04
Mar. 31, '05
Sep. 30, '05
Mar. 31, '06
4,248,812
4,955,151
5,815,291
6,943,678
7,909,320
10,003,099
327,698
706,339
860,140
1,128,387
965,642
2,093,779
■ Transaction Value
(Unit: billions of yen)
Stock Transactions
Margin
Transactions
(b)
Transaction
Value
(c)
Fine and Warning
7
Reprimand and Warning
7
Warning
12
Apr. '03 to Sep. '03
14,527.3
17,452.0
181,585.5
17.6%
Against Sales Representatives
Oct. '03 to Mar. '04
24,433.6
25,587.1
231,094.8
21.6%
Revocation of Sales Representative Registration
Revocation of Sales Representative Registration and
Treatment as a Perpetrator of Inappropriate Acts
Suspension of Sales Representative Duty
Suspension of Sales Representative Qualification
4
32,067.6
33,620.4
259,864.1
25.3%
Percentage
{(a)+(b)}/(c)
32,743.6
34,258.7
252,862.0
26.5%
23
46,968.2
46,265.4
325,419.7
28.7%
3
88,843.9
91,333.1
568,867.0
31.7%
119
Data of JSDA
Internet Transactions
Cash
Transactions
(a)
Against Member Firms
(Note) "Transaction Value" is total transaction value of stock brokerage transactions of all member firms during the period.
71
Against Sales Managers of Member Firms
Suspension of Sales Manager Qualification
28
Annual Report 2006
2
Annual Report 2006
29
Dispute Resolution in Fiscal 2005
Internet Transaction Survey
Requests for Mediation
158
Successful Settlement
66
Failure in Reaching Settlement
69
■ Number of Securities Firms Providing Internet Transactions
(Note) The amounts do not match due to cases carried over from fiscal 2004 or issues not concluded within fiscal 2005.
(Unit: companies)
Total Member
Firms
Consultation and Complaints in Fiscal 2005
Consultation
Complaints
Inquiry or Opinion regarding System of Transactions in Securities
7,368
Complaints about Solicitation
138
Complaints about Transactions
453
Complaints about Processing
264
Other Complaints
127
Total
Do Not Handle Internet Transactions
Making Preparations
Studying Plans
Have No Plans
Sep. 30, '03
268
55
20.5%
213
79.5%
2
0.7%
0
0.0%
211
78.7%
Mar. 31, '04
266
55
20.7%
211
79.3%
1
0.4%
3
1.1%
207
77.8%
Sep. 30, '04
265
53
20.0%
212
80.0%
1
0.4%
1
0.4%
210
79.2%
Mar. 31, '05
268
54
20.1%
214
79.9%
1
0.4%
3
1.1%
210
78.4%
Sep. 30, '05
276
56
20.3%
220
79.7%
0
0.0%
1
0.4%
219
79.3%
Mar. 31, '06
288
52
18.1%
236
81.9%
2
0.7%
11
3.8%
223
77.4%
■ Number of Internet Transaction Accounts
(Unit: accounts)
982
Number of Accounts
Change
Disciplinary Action in Fiscal 2005
Handle Internet
Transactions
Sep. 30, '03
Mar. 31, '04
Sep. 30, '04
Mar. 31, '05
Sep. 30, '05
Mar. 31, '06
4,248,812
4,955,151
5,815,291
6,943,678
7,909,320
10,003,099
327,698
706,339
860,140
1,128,387
965,642
2,093,779
■ Transaction Value
(Unit: billions of yen)
Stock Transactions
Margin
Transactions
(b)
Transaction
Value
(c)
Fine and Warning
7
Reprimand and Warning
7
Warning
12
14,527.3
17,452.0
181,585.5
17.6%
Against Sales Representatives
24,433.6
25,587.1
231,094.8
21.6%
Revocation of Sales Representative Registration
Revocation of Sales Representative Registration and
Suspension of Sales Representative Duty
Suspension of Sales Representative Qualification
4
32,067.6
33,620.4
259,864.1
25.3%
Percentage
{(a)+(b)}/(c)
32,743.6
34,258.7
252,862.0
26.5%
23
46,968.2
46,265.4
325,419.7
28.7%
3
88,843.9
91,333.1
568,867.0
31.7%
119
Data of JSDA
Internet Transactions
Cash
Transactions
(a)
Against Member Firms
(Note) "Transaction Value" is total transaction value of stock brokerage transactions of all member firms during the period.
71
Against Sales Managers of Member Firms
Suspension of Sales Manager Qualification
28
Annual Report 2006
2
Annual Report 2006
29
30
Annual Report 2006
Planning and Administration Div.
Securities Education Div.
Securities Public Relation Div.
Securities Information Offices
Securities Education and Public Relation Committee
Sales Representative Examination Committee
As of April 1, 2006
Reform Promotion Center for
Securities Clearing & Settlement System
Bonds & Financial Products Div.
Equity Market Div.
Capital Market
Personal Information Office
Self-regulatory Planning Div.
Special Member Firms Div.
Sales Representative Examination & Registration Div.
Inspection Div.
Sales Representative Examination Monitoring Office
Disciplinary Examination Div.
Compliance
Self-regulation
District Disciplinary Committee
Self-regulatory Planning Committee
Equity Market Committee
Bond and Financial Products Committee
Special Member Committee
Disciplinary Committee
Special Member Disciplinary Committee
Self-regulation Board
Institute for Securities Education & Public Relations
Member Firms Div.
Member Education &Training Div.
Member Firms
Planning Div.
Planning
Segregated District Councils
District Council
Retail Brokers Council
Wholesale Brokers Council
Internet Brokers Council
Foreign Brokers Council
Securities Industry Council
Securities Strategic Policy Board
Member Auditor
Standing Auditor
Board of Auditors
Mediating Consultants
■ Chairman
Hiroshi Koshida
Tatsuhiko Kawakami
Daiwa Institute of Research, Ltd.
■ Vice Chairman and Member Governor
Nobuyuki Koga
The Nomura Securities Co., Ltd.
Kazuyoshi Kimura
Nikko Cordial Securities Inc.
Tatsuo Watanabe
■ Senior Managing Director
■ Public Governor
Hiroshi Okuda
Nippon Keidanren
Masaharu Hino
Lawyer
■ Regular Member Governor
Kaoru Umehara
Kyowa Securities Co., Ltd.
Data of JSDA
Tokyo (Niigata branch)
Osaka
Nagoya
Hokkaido
Tohoku
Hokuriku
Chugoku
Shikoku
Kyushu
District Office
Internal Auditing Office
Public Relations Office
Secretarial Office
Office of Information System & Technology
Legal Office
Organization Planning Office
General Administration Div.
Accounting Div.
Administration
General Affairs, Administration
Head Office of Secretariat
Financial Sub-Committee
General Affairs Committee
Chairman
Vice-Chairman
Senior Managing Director
Regular Member Governor
Special Member Governor
Public Governor
Board of Governors
General Assembly
Organization Chart
(As of April 1, 2006)
Officers
■ Special Member Governor
Moritaka Hattori
The Bank of IKEDA, Ltd.
■ Vice Chairman and Public Governor
■ Executive Officer
Yutaka Sugano
Akio Takahashi
Akira Sakashita
Kazunori Yoshioka
■ Vice Chairman
Yoji Kanie
■ Regular Member Auditor
Takashi Ishikawa
Daisei Securities Co., Ltd.
Kiichiro Masui
Yasuo Chujo
Kanagawa Securities Co., Ltd.
■ Standing Auditor
Nobuaki Iwai
■ Head of Compliance
Hidemi Ijichi
Annual Report 2006
31
30
Annual Report 2006
Planning and Administration Div.
Securities Education Div.
Securities Public Relation Div.
Securities Information Offices
Securities Education and Public Relation Committee
Sales Representative Examination Committee
As of April 1, 2006
Reform Promotion Center for
Securities Clearing & Settlement System
Bonds & Financial Products Div.
Equity Market Div.
Capital Market
Personal Information Office
Self-regulatory Planning Div.
Special Member Firms Div.
Sales Representative Examination & Registration Div.
Inspection Div.
Sales Representative Examination Monitoring Office
Disciplinary Examination Div.
Compliance
Self-regulation
District Disciplinary Committee
Self-regulatory Planning Committee
Equity Market Committee
Bond and Financial Products Committee
Special Member Committee
Disciplinary Committee
Special Member Disciplinary Committee
Self-regulation Board
Institute for Securities Education & Public Relations
Member Firms Div.
Member Education &Training Div.
Member Firms
Planning Div.
Planning
Segregated District Councils
District Council
Retail Brokers Council
Wholesale Brokers Council
Internet Brokers Council
Foreign Brokers Council
Securities Industry Council
Securities Strategic Policy Board
Member Auditor
Standing Auditor
Board of Auditors
Mediating Consultants
■ Chairman
Hiroshi Koshida
Tatsuhiko Kawakami
Daiwa Institute of Research, Ltd.
■ Vice Chairman and Member Governor
Nobuyuki Koga
Kazuyoshi Kimura
Tatsuo Watanabe
■ Senior Managing Director
■ Public Governor
Hiroshi Okuda
Nippon Keidanren
Masaharu Hino
Lawyer
■ Regular Member Governor
Kaoru Umehara
Data of JSDA
Tokyo (Niigata branch)
Osaka
Nagoya
Hokkaido
Tohoku
Hokuriku
Chugoku
Shikoku
Kyushu
District Office
Internal Auditing Office
Public Relations Office
Secretarial Office
Office of Information System & Technology
Legal Office
Organization Planning Office
General Administration Div.
Accounting Div.
Administration
General Affairs, Administration
Head Office of Secretariat
Financial Sub-Committee
General Affairs Committee
Chairman
Vice-Chairman
Senior Managing Director
Regular Member Governor
Special Member Governor
Public Governor
Board of Governors
General Assembly
Organization Chart
Officers
■ Special Member Governor
Moritaka Hattori
The Bank of IKEDA, Ltd.
■ Vice Chairman and Public Governor
■ Executive Officer
Yutaka Sugano
Akio Takahashi
Akira Sakashita
Kazunori Yoshioka
■ Vice Chairman
Yoji Kanie
■ Regular Member Auditor
Takashi Ishikawa
Kiichiro Masui
Yasuo Chujo
Kanagawa Securities Co., Ltd.
■ Standing Auditor
Nobuaki Iwai
■ Head of Compliance
Hidemi Ijichi
Annual Report 2006
31
List of Regular Members
■ HOKKAIDO DISTRICT
Joko Securities Co., Ltd.
■ TOHOKU DISTRICT
Daihoku Securities Co., Ltd.
Shonai Securities Co., Ltd.
Yamagata Securities Co., Ltd.
■ TOKYO DISTRICT
ABN AMRO Asset Management (Japan) Ltd.
AIP Securities Co., Ltd.
Aizawa Securities Co., Ltd.
Akakiya Securities Co., Ltd.
Alba Ace Securities Co., Ltd.
Alps Securities Co., Ltd.
Ark Securities Co., Ltd.
Axes Japan Securities Co., Ltd.
B B Net Securities Co., Ltd.
Bloomberg Tradebook Japan Ltd.
Bridge Capital Securities Co., Ltd.
Bright Securities Company, Limited
Brown Brothers Harriman Investment Management
(Japan) Inc.
Buko Securities Co., Ltd.
C&M Securities Co., Ltd.
CA-AM Securities Company Japan Ltd.
Capital Partners Securities Co., Ltd.
Central Tanshi Securities Co., Ltd.
Century Securities Co., Ltd.
Chuo Securities Co., Ltd.
Credit Suisse Securities (Japan) Limited
Daiwa Securities Co., Ltd.
Daiwa Securities SMBC Co., Ltd.
D. Brain Securities Co., Ltd.
Deutsche Securities Inc.
Dojimakanto Securities Limited
ECO-PLANNING SECURITIES Co. Ltd.
EIKEI SECURITIES CO., LTD.
E*TRADE SECURITIES CO., LTD.
32
Annual Report 2006
Exeland Securities Co., Ltd.
Fidelity Securities K.K.
FinTech Global Securities, Inc.
FROM EAST Securities Co., Ltd.
FundNet Securities. Co., Ltd.
FXA Securities, Ltd.
Gartmore Investment Japan Limited
GEMINI ADVISORS COMPANY LIMITED
GMO internet securities, Inc.
Himawari Securities, Inc.
Hitachi Credit Securities Co., Ltd.
H.S.Securities Co., Ltd.
IBS Securities Co., Ltd.
ICAP Totan Securities Co., Ltd.
icapital, Inc.
Ichiyoshi Securities Co., Ltd.
Iida Securities Co., Ltd.
Integrated Finance Limited (Japan)
Inter Swiss Trust Securities Company Limited
IPO Securities Co., Ltd.
IRIYA BANSEI SECURITIES CO., LTD.
ITM Securities Co., Ltd.
ITOCHU Capital Securities Ltd.
JAIC Securities Co., Ltd.
Japan Alternative Investment Co., Ltd.
Japan Asia Securities Co., Ltd.
Japan Bond Trading Co., Ltd.
JAPAN SECURITIES AGENTS, LTD.
Jbond Securities Co., Ltd.
JET Securities, Inc.
JOINVEST Securities Co., Ltd.
Jonan Securities Co., Ltd.
JPMorgan Securities Japan Co., Ltd.
JVIC SECURITIES COMPANY
Jyujiya Securities Co., Ltd.
Kabu.com Securities Co., Ltd.
KAIYO Securities Co., Ltd.
Kaneju Securities Co., Ltd.
Kaneyama Securities Co., Ltd.
Kokufu Securities Co., Ltd.
Kurokawakitoku Securities Co., Ltd.
Kyokuto Securities Co., Ltd.
livedoor Securities Co., Ltd.
LPL JAPAN SECURITIES K.K.
Man Investments Securities Japan, Limited
Marudai Securities Co., Ltd.
Marufuku Securities Co., Ltd.
Marukuni Securities Co., Ltd.
Marusan Securities Co., Ltd.
Maruwa Securities Co., Ltd.
Matsui Securities Co., Ltd.
Meiwa Securities Co., Ltd.
Merrill Lynch Japan Securities Co., Ltd.
Mirai Securities Co., Ltd.
Mita Securities Co., Ltd.
Mito Securities Co., Ltd.
Mitsubishi Corporation Capital Ltd.
Mitsubishi Corporation Futures & Securities Ltd.
Mitsubishi UFJ Securities Co., Ltd.
Mitsubishi UFJ Wealth Management, Ltd.
Mizuho Securities Co., Ltd.
Monex, Inc.
Morgan Stanley Japan Securities Co., Ltd.
Mr. SECURITIES Co., LTD.
Murosei Securities Co., Ltd.
Musashi Securities Co., Ltd.
Nagano Securities Co., Ltd.
Naruse Securities Co., Ltd.
NETWING SECURITIES CO., LTD.
New-S Securities Co., Ltd.
Niigata Securities Co., Ltd.
Nikko Citigroup Limited
Nippon First Securities Co., Ltd.
Nippon Investors Securities Co., Ltd.
NIS Securities Co., Ltd.
Nissan Securities Co., Ltd.
Nozomi Securities Co., Ltd.
Okasan Securities Co., Ltd.
Okinawa Securities Co., Ltd.
One Asia Securities Co., Ltd.
Orient Securities Co., Ltd.
Orix Securities Corporation
PBA Securities Co., Ltd.
Plaza Securities Inc.
Premiere Securities Co., Ltd.
Prestige Asset Management Co., Ltd.
Prive Zurich Securities Co., Ltd.
Putnam Investments Securities Co., Ltd.
Rakuten Securities, Inc.
Reliance Japan Securities, Inc.
Retela Crea Securities Co., Ltd.
Russell Investments Japan Co., Ltd.
Sanei Securities Co., Ltd.
SANKO Securities Co., Ltd.
SBI Securities Co., Ltd.
Shinkin Securities Co., Ltd.
Shinko Securities Co., Ltd.
Shinsei Securities Co., Ltd.
Shinwa Securities Co., Ltd.
Sieg Securities Co., Ltd.
SMBC Friend Securities Co., Ltd.
Socius Securities Co., Ltd.
Sompo Japan DC Securities Inc.
Sparx Securities Co., Ltd.
SPC Securities Inc.
Stars Securities Co., Ltd.
State Street Global Markets Securities Co., Ltd.
Subaru Securities Co., Ltd.
Tama Securities Co., Ltd.
Tanaka Value Investments K.K.
THE AIR’S SEA SECURITIES CO., LTD.
The Arts Securities Co., Ltd.
The Bank of New York Securities Company Japan Ltd.
The G-Stock Securities Co., Ltd.
The Miki Securities Co., Ltd.
The Mizuho Investors Securities Co., Ltd.
The Nakahara Securities Co., Ltd.
Annual Report 2006
33
Data of JSDA
List of Regular Members
■ HOKKAIDO DISTRICT
Joko Securities Co., Ltd.
■ TOHOKU DISTRICT
Daihoku Securities Co., Ltd.
Shonai Securities Co., Ltd.
Yamagata Securities Co., Ltd.
■ TOKYO DISTRICT
ABN AMRO Asset Management (Japan) Ltd.
AIP Securities Co., Ltd.
Aizawa Securities Co., Ltd.
Akakiya Securities Co., Ltd.
Alba Ace Securities Co., Ltd.
Alps Securities Co., Ltd.
Ark Securities Co., Ltd.
Axes Japan Securities Co., Ltd.
B B Net Securities Co., Ltd.
Bloomberg Tradebook Japan Ltd.
Bridge Capital Securities Co., Ltd.
Bright Securities Company, Limited
Brown Brothers Harriman Investment Management
(Japan) Inc.
Buko Securities Co., Ltd.
C&M Securities Co., Ltd.
CA-AM Securities Company Japan Ltd.
Capital Partners Securities Co., Ltd.
Central Tanshi Securities Co., Ltd.
Century Securities Co., Ltd.
Chuo Securities Co., Ltd.
Credit Suisse Securities (Japan) Limited
Daiwa Securities Co., Ltd.
Daiwa Securities SMBC Co., Ltd.
D. Brain Securities Co., Ltd.
Deutsche Securities Inc.
Dojimakanto Securities Limited
ECO-PLANNING SECURITIES Co. Ltd.
EIKEI SECURITIES CO., LTD.
E*TRADE SECURITIES CO., LTD.
32
Annual Report 2006
Exeland Securities Co., Ltd.
Fidelity Securities K.K.
FinTech Global Securities, Inc.
FROM EAST Securities Co., Ltd.
FundNet Securities. Co., Ltd.
FXA Securities, Ltd.
Gartmore Investment Japan Limited
GEMINI ADVISORS COMPANY LIMITED
GMO internet securities, Inc.
Himawari Securities, Inc.
Hitachi Credit Securities Co., Ltd.
H.S.Securities Co., Ltd.
IBS Securities Co., Ltd.
ICAP Totan Securities Co., Ltd.
icapital, Inc.
Ichiyoshi Securities Co., Ltd.
Iida Securities Co., Ltd.
Integrated Finance Limited (Japan)
Inter Swiss Trust Securities Company Limited
IPO Securities Co., Ltd.
IRIYA BANSEI SECURITIES CO., LTD.
ITM Securities Co., Ltd.
ITOCHU Capital Securities Ltd.
JAIC Securities Co., Ltd.
Japan Alternative Investment Co., Ltd.
Japan Asia Securities Co., Ltd.
Japan Bond Trading Co., Ltd.
JAPAN SECURITIES AGENTS, LTD.
Jbond Securities Co., Ltd.
JET Securities, Inc.
JOINVEST Securities Co., Ltd.
Jonan Securities Co., Ltd.
JPMorgan Securities Japan Co., Ltd.
JVIC SECURITIES COMPANY
Jyujiya Securities Co., Ltd.
Kabu.com Securities Co., Ltd.
KAIYO Securities Co., Ltd.
Kaneju Securities Co., Ltd.
Kaneyama Securities Co., Ltd.
Kokufu Securities Co., Ltd.
Kurokawakitoku Securities Co., Ltd.
Kyokuto Securities Co., Ltd.
livedoor Securities Co., Ltd.
LPL JAPAN SECURITIES K.K.
Man Investments Securities Japan, Limited
Marudai Securities Co., Ltd.
Marufuku Securities Co., Ltd.
Marukuni Securities Co., Ltd.
Marusan Securities Co., Ltd.
Maruwa Securities Co., Ltd.
Matsui Securities Co., Ltd.
Meiwa Securities Co., Ltd.
Merrill Lynch Japan Securities Co., Ltd.
Mirai Securities Co., Ltd.
Mita Securities Co., Ltd.
Mito Securities Co., Ltd.
Mitsubishi Corporation Capital Ltd.
Mitsubishi Corporation Futures & Securities Ltd.
Mitsubishi UFJ Securities Co., Ltd.
Mitsubishi UFJ Wealth Management, Ltd.
Mizuho Securities Co., Ltd.
Monex, Inc.
Morgan Stanley Japan Securities Co., Ltd.
Mr. SECURITIES Co., LTD.
Murosei Securities Co., Ltd.
Musashi Securities Co., Ltd.
Nagano Securities Co., Ltd.
Naruse Securities Co., Ltd.
NETWING SECURITIES CO., LTD.
New-S Securities Co., Ltd.
Niigata Securities Co., Ltd.
Nikko Citigroup Limited
Nippon First Securities Co., Ltd.
Nippon Investors Securities Co., Ltd.
NIS Securities Co., Ltd.
Nissan Securities Co., Ltd.
Nozomi Securities Co., Ltd.
Okasan Securities Co., Ltd.
Okinawa Securities Co., Ltd.
One Asia Securities Co., Ltd.
Orient Securities Co., Ltd.
Orix Securities Corporation
PBA Securities Co., Ltd.
Plaza Securities Inc.
Premiere Securities Co., Ltd.
Prestige Asset Management Co., Ltd.
Prive Zurich Securities Co., Ltd.
Putnam Investments Securities Co., Ltd.
Rakuten Securities, Inc.
Reliance Japan Securities, Inc.
Retela Crea Securities Co., Ltd.
Russell Investments Japan Co., Ltd.
Sanei Securities Co., Ltd.
SANKO Securities Co., Ltd.
SBI Securities Co., Ltd.
Shinkin Securities Co., Ltd.
Shinko Securities Co., Ltd.
Shinsei Securities Co., Ltd.
Shinwa Securities Co., Ltd.
Sieg Securities Co., Ltd.
SMBC Friend Securities Co., Ltd.
Socius Securities Co., Ltd.
Sompo Japan DC Securities Inc.
Sparx Securities Co., Ltd.
SPC Securities Inc.
Stars Securities Co., Ltd.
State Street Global Markets Securities Co., Ltd.
Subaru Securities Co., Ltd.
Tama Securities Co., Ltd.
Tanaka Value Investments K.K.
THE AIR’S SEA SECURITIES CO., LTD.
The Arts Securities Co., Ltd.
The Bank of New York Securities Company Japan Ltd.
The G-Stock Securities Co., Ltd.
The Miki Securities Co., Ltd.
The Mizuho Investors Securities Co., Ltd.
The Nakahara Securities Co., Ltd.
Annual Report 2006
33
Data of JSDA
■ NAGOYA DISTRICT
Ando Securities Co., Ltd.
Daiman Securities Co., Ltd.
Daitoku Securities Co., Ltd.
Ise Securities Co., Ltd.
Kimura Securities Co., Ltd.
Kotobuki Securities Co., Ltd.
Maruhachi Securities Co., Ltd.
Matsusaka Securities Co., Ltd.
Nakaizumi Securities Co., Ltd.
Nobata Securities Co., Ltd.
Oishi Securities Co., Ltd.
Okachi Securities Co., Ltd.
Rokuni Securities Co., Ltd.
Shin-Ogaki Securities Co., Ltd.
SHIZUGIN TM SECURITIES Co., Ltd.
Shizuoka Tokai Securities Co., Ltd.
Tahara Securities Co., Ltd.
Toyota Financial Services Securities Corporation
Yutaka Securities Co., Ltd.
34
Annual Report 2006
■ HOKURIKU DISTRICT
Aramachi Securities Co., Ltd.
Imamura Securities Co., Ltd.
Isurugi Securities Co., Ltd.
Masumo Securities Co., Ltd.
Mitsui Securities Co., Ltd.
Sakamoto Hokuriku Securities Co., Ltd.
Shimadai Securities Co., Ltd.
Shinbayashi Securities Co., Ltd.
Takematsu Securities Co., Ltd.
Tomi Securities Co., Ltd.
Zukawa Securities Co., Ltd.
■ OSAKA DISTRICT
Ace Securities Co., Ltd.
AIM SECURITIES Co., Ltd.
Aioi Securities Co., Ltd.
Angel Securities Co., Ltd.
Banyo Securities Co., Ltd.
Cosmo Securities Co., Ltd.
Daiko Clearing Services Corporation
Eiwa Securities Co., Ltd.
Hibiki Securities Inc.
Hikari Securities Co., Ltd.
Hinode Securities Co., Ltd.
Hirota Securities Co., Ltd.
Iwai Securities Co., Ltd.
Japan Electric Securities Co., Ltd.
Kaneyoshi Securities Co., Ltd.
Kanzaki Securities Co., Ltd.
KITTO Securities Co., Ltd.
KOBE Securities Co., Ltd.
Maruchika Securities Co., Ltd.
Miyako Securities Co., Ltd.
Naito Securities Co., Ltd.
Nara Securities Co., Ltd.
Nishimura Securities Co., Ltd.
Nishiwaki Securities Co., Ltd.
Otsuka Securities Co., Ltd.
Panta Rhei Securities Co., Ltd.
Rokuwa Securities Co., Ltd.
Sankyo Securities Co., Ltd.
Sasayama Securities Co., Ltd.
Taicom Securities Co., Ltd.
Takagi Securities Co., Ltd.
Tamaki Securities Co., Ltd.
The Kosei Securities Co., Ltd.
Touchstone Capital Securities Co., Ltd.
Tsukamoto Securities Co., Ltd.
■ CHUGOKU DISTRICT
Daisen Hinomaru Securities Co., Ltd.
Kadoya Securities Co., Ltd.
Kitada Securities Co., Ltd.
Tsuyama Securities Co., Ltd.
Utsumiya Securities Co., Ltd.
Yahata Securities Co., Ltd.
■ SHIKOKU DISTRICT
Awa Securities Co., Ltd.
Ehime Securities Co., Ltd.
Futanami Securities Co., Ltd.
Kagawa Securities Co., Ltd.
Mitoyo Securities Co., Ltd.
Tokushima-Godo Securities Co., Ltd.
■ KYUSYU DISTRICT
Iizukanakagawa Securities Co., Ltd.
Maeda Securities Co., Ltd.
Sasebo Securities Co., Ltd.
Star Asset Securities Co., Ltd.
Daikumamoto Securities Co., Ltd.
Bear Stearns (Japan) Limited
BGC Shoken Kaisha Limited
BNP PARIBAS Securities (Japan) Limited
Calyon Capital Markets Asia B.V.
CIBC World Markets (Japan) Inc.
Citicorp Securities (Japan) Ltd.
Countrywide Capital Markets Asia Ltd.
Dresdner Kleinwort Wasserstein (Japan) Limited
E*Trade Securities Limited
GFI Securities Limited
Goldman Sachs (Japan) Ltd.
HSBC Securities (Japan) Limited
HYUNDAI SECURITIES CO., LTD.
HVB Capital Asia Limited
Instinet Japan Limited
ITG Japan Ltd.
IXIS Corporate & Investment Bank
Jefferies (Japan) Limited
KBC Financial Products UK Limited
Lehman Brothers Japan Inc.
MACQUARIE SECURITIES (JAPAN) LIMITED
Prudential Securities (Japan) Ltd.
RBC Capital Markets (Japan) Limited
RBS Securities Japan Limited
Societe Generale Securities (North Pacific) Ltd.
Swiss Re Capital Markets (Japan) Corporation
TD Securities (Japan) Inc.
Tradeweb Europe Ltd.
Tokio Marine Financial Solutions ltd.
UBS Securities Japan Ltd.
West LB Securities Pacific Limited
Data of JSDA
The Tachibana Securities Co., Ltd.
Tobu Securities Co., Ltd.
Tokai Tokyo Securities Co., Ltd.
Tokyo City Development Securities Co., Ltd.
Tomioka Securities Co., Ltd.
Tower Securities Co., Ltd.
Toyo Securities Co., Ltd.
TRADERS SECURITIES CO., LTD.
United World Securities (Japan) K.K.
USS Securities Co., Ltd.
Usuki Securities Co., Ltd.
Utsunomiya Securities Co., Ltd.
Value Securities Co., Ltd.
Vanguard Investments Japan, Ltd.
Yamamaru Securities Co., Ltd.
Yamani Securities Co., Ltd.
Yamawa Securities Co., Ltd.
Yensai.com Co., Ltd.
Yumeshin Securities Co., Ltd.
■ FOREIGN SECURITIES COMPANIES
ABN Amro Securities (Japan) Limited
AIG JAPAN SECURITIES, INC.
Alliance Bernstein Investments, Inc., Tokyo Branch
Banc of America Securities-Japan, Inc.
Banque AIG Tokyo Branch
BARCLAYS CAPITAL JAPAN LIMITED
Annual Report 2006
35
■ NAGOYA DISTRICT
Ando Securities Co., Ltd.
Daiman Securities Co., Ltd.
Daitoku Securities Co., Ltd.
Ise Securities Co., Ltd.
Kimura Securities Co., Ltd.
Kotobuki Securities Co., Ltd.
Maruhachi Securities Co., Ltd.
Matsusaka Securities Co., Ltd.
Nakaizumi Securities Co., Ltd.
Nobata Securities Co., Ltd.
Oishi Securities Co., Ltd.
Okachi Securities Co., Ltd.
Rokuni Securities Co., Ltd.
Shin-Ogaki Securities Co., Ltd.
SHIZUGIN TM SECURITIES Co., Ltd.
Shizuoka Tokai Securities Co., Ltd.
Tahara Securities Co., Ltd.
Toyota Financial Services Securities Corporation
Yutaka Securities Co., Ltd.
34
Annual Report 2006
■ HOKURIKU DISTRICT
Aramachi Securities Co., Ltd.
Imamura Securities Co., Ltd.
Isurugi Securities Co., Ltd.
Masumo Securities Co., Ltd.
Mitsui Securities Co., Ltd.
Sakamoto Hokuriku Securities Co., Ltd.
Shimadai Securities Co., Ltd.
Shinbayashi Securities Co., Ltd.
Takematsu Securities Co., Ltd.
Tomi Securities Co., Ltd.
Zukawa Securities Co., Ltd.
■ OSAKA DISTRICT
Ace Securities Co., Ltd.
AIM SECURITIES Co., Ltd.
Aioi Securities Co., Ltd.
Angel Securities Co., Ltd.
Banyo Securities Co., Ltd.
Cosmo Securities Co., Ltd.
Daiko Clearing Services Corporation
Eiwa Securities Co., Ltd.
Hibiki Securities Inc.
Hikari Securities Co., Ltd.
Hinode Securities Co., Ltd.
Hirota Securities Co., Ltd.
Iwai Securities Co., Ltd.
Japan Electric Securities Co., Ltd.
Kaneyoshi Securities Co., Ltd.
Kanzaki Securities Co., Ltd.
KITTO Securities Co., Ltd.
KOBE Securities Co., Ltd.
Maruchika Securities Co., Ltd.
Miyako Securities Co., Ltd.
Naito Securities Co., Ltd.
Nara Securities Co., Ltd.
Nishimura Securities Co., Ltd.
Nishiwaki Securities Co., Ltd.
Otsuka Securities Co., Ltd.
Panta Rhei Securities Co., Ltd.
Rokuwa Securities Co., Ltd.
Sankyo Securities Co., Ltd.
Sasayama Securities Co., Ltd.
Taicom Securities Co., Ltd.
Takagi Securities Co., Ltd.
Tamaki Securities Co., Ltd.
The Kosei Securities Co., Ltd.
Touchstone Capital Securities Co., Ltd.
Tsukamoto Securities Co., Ltd.
■ CHUGOKU DISTRICT
Daisen Hinomaru Securities Co., Ltd.
Kadoya Securities Co., Ltd.
Kitada Securities Co., Ltd.
Tsuyama Securities Co., Ltd.
Utsumiya Securities Co., Ltd.
Yahata Securities Co., Ltd.
■ SHIKOKU DISTRICT
Awa Securities Co., Ltd.
Ehime Securities Co., Ltd.
Futanami Securities Co., Ltd.
Kagawa Securities Co., Ltd.
Mitoyo Securities Co., Ltd.
Tokushima-Godo Securities Co., Ltd.
■ KYUSYU DISTRICT
Iizukanakagawa Securities Co., Ltd.
Maeda Securities Co., Ltd.
Sasebo Securities Co., Ltd.
Star Asset Securities Co., Ltd.
Daikumamoto Securities Co., Ltd.
Bear Stearns (Japan) Limited
BGC Shoken Kaisha Limited
BNP PARIBAS Securities (Japan) Limited
Calyon Capital Markets Asia B.V.
CIBC World Markets (Japan) Inc.
Citicorp Securities (Japan) Ltd.
Countrywide Capital Markets Asia Ltd.
Dresdner Kleinwort Wasserstein (Japan) Limited
E*Trade Securities Limited
GFI Securities Limited
Goldman Sachs (Japan) Ltd.
HSBC Securities (Japan) Limited
HYUNDAI SECURITIES CO., LTD.
HVB Capital Asia Limited
Instinet Japan Limited
ITG Japan Ltd.
IXIS Corporate & Investment Bank
Jefferies (Japan) Limited
KBC Financial Products UK Limited
Lehman Brothers Japan Inc.
MACQUARIE SECURITIES (JAPAN) LIMITED
Prudential Securities (Japan) Ltd.
RBC Capital Markets (Japan) Limited
RBS Securities Japan Limited
Societe Generale Securities (North Pacific) Ltd.
Swiss Re Capital Markets (Japan) Corporation
TD Securities (Japan) Inc.
Tradeweb Europe Ltd.
Tokio Marine Financial Solutions ltd.
UBS Securities Japan Ltd.
West LB Securities Pacific Limited
Data of JSDA
The Tachibana Securities Co., Ltd.
Tobu Securities Co., Ltd.
Tokai Tokyo Securities Co., Ltd.
Tokyo City Development Securities Co., Ltd.
Tomioka Securities Co., Ltd.
Tower Securities Co., Ltd.
Toyo Securities Co., Ltd.
TRADERS SECURITIES CO., LTD.
United World Securities (Japan) K.K.
USS Securities Co., Ltd.
Usuki Securities Co., Ltd.
Utsunomiya Securities Co., Ltd.
Value Securities Co., Ltd.
Vanguard Investments Japan, Ltd.
Yamamaru Securities Co., Ltd.
Yamani Securities Co., Ltd.
Yamawa Securities Co., Ltd.
Yensai.com Co., Ltd.
Yumeshin Securities Co., Ltd.
■ FOREIGN SECURITIES COMPANIES
ABN Amro Securities (Japan) Limited
AIG JAPAN SECURITIES, INC.
Alliance Bernstein Investments, Inc., Tokyo Branch
Banc of America Securities-Japan, Inc.
Banque AIG Tokyo Branch
BARCLAYS CAPITAL JAPAN LIMITED
Annual Report 2006
35
Profile
MAJOR ACTIVITIES
I. SELF-REGULATORY ACTIVITIES
HISTORY
1940 to 1941
According to the policy of one association for one prefecture, securities dealers associations
were established in many local districts.
May 1949
The Japan Securities Dealers Joint Association was established as a federation of securities
dealers associations.
May 1968
33 local securities dealers associations were consolidated into 10 associations.
July 1973
The Japan Securities Dealers Joint Association and 10 local securities dealers associations
were dissolved and the Japan Securities Dealers Association was newly established,
consisting of all securities companies as direct constituent members, with its headquarters
in Tokyo and with 10 district offices.
July 1992
The association was reorganized from a corporate juridical person under the Civil Code to an
authorized corporation under the Securities and Exchange Law.
April 1994
Financial institutions authorized to undertake securities business joined the association as
special members.
April 1995
South Kyushu District Office was consolidated into the Kyushu District Office.
July 1998
JSDA integrated the Bond Underwriters Association of Japan.
February 2001
JSDA entrusted the operation of the Over-the-Counter stock market to a market operation
company.
July 2004
JSDA changed to the new structured organization consisting of three departments: Selfregulation, Securities Strategic Policy, and General Affairs and Administration. JSDA also
merged with the Association of Tokyo Stock Exchange Regular Members.
December 2004
JSDA closed the Over-the-Counter Trading Securities Market and the Jasdaq Securities
Exchange, Inc. started business.
April 2005
JSDA integrated the Japan Institute for Securities Information and Public Relations.
36
Annual Report 2006
1. Establishment and Execution of Self-regulatory Rules
JSDA has established many kinds of self-regulatory rules to be applied to
the members of the association, for enhancing fair and smooth trading in
securities in order to promote efficient administration of the securities
markets.
2. Execution of On-site Inspection and Off-site Monitoring
JSDA conducts on-site inspections in relation to internal administration
system and compliance with the statutory laws and regulations or selfregulatory rules concerning the securities business activities of members of
the association or their employees. JSDA is also monitoring the
management and segregated custody by securities companies.
3. Exercise of Self-regulatory Disciplinary Actions
In cases of violation of the statutory laws and regulations or our selfregulatory rules by members of the association or securities company
employees, the JSDA strictly enforces self-regulatory disciplinary action.
4. Qualification Examination, Qualification Renewal Training and
Registration of Securities Sales Representatives
JSDA conducts qualification examinations for securities sales
representatives and internal administrators and regulatory training courses
such as Qualification Renewal Training in consideration of the high public
status of the securities business and the importance of its social obligations,
and carries out registration of securities sales representatives, which is
entrusted to it by the Commissioner of the Financial Services Agency.
5. Counseling concerning Customer Complaints
JSDA provides mediation services to settle disputes between members of
the association and their customers by assigning Mediating Consultants to
each district office and also providing counseling services concerning
complaints about business of the members and securities sales agents from
customers.
6. Improvement and Expansion of the OTC Bond Market
Profile
Japan Securities Dealers Association (JSDA) is the sole corporative organization in Japan authorized by the
Prime Minister under the Securities and Exchange Law (Paragraph 2 of Article 68), and consists of all the
securities companies and registered financial institutions (as members of the association).
Members of the association are categorized into two groups: regular members and special members.
Securities companies, including foreign securities companies, are regular members. Registered financial
institutions join the association as special members.
The purposes of the JSDA are as follows: (1) to protect investors by ensuring fair and smooth trading in
securities and other transactions by members of the association; (2) to promote the implementation of policy
measures for the revitalization of the Japanese securities markets in order to contribute to the growth and
development of the Japanese economy.
(1) Reform of the OTC Bond Market System
Most bonds and debentures are usually traded on the OTC market in
Japan. To enhance fair and efficient bond transaction, the JSDA is
trying to reform or rationalize the OTC bond market by establishing or
revising systems or business practices related to OTC bond transactions.
Annual Report 2006
37
Profile
MAJOR ACTIVITIES
I. SELF-REGULATORY ACTIVITIES
HISTORY
1940 to 1941
According to the policy of one association for one prefecture, securities dealers associations
were established in many local districts.
May 1949
The Japan Securities Dealers Joint Association was established as a federation of securities
dealers associations.
May 1968
33 local securities dealers associations were consolidated into 10 associations.
July 1973
The Japan Securities Dealers Joint Association and 10 local securities dealers associations
were dissolved and the Japan Securities Dealers Association was newly established,
consisting of all securities companies as direct constituent members, with its headquarters
in Tokyo and with 10 district offices.
July 1992
The association was reorganized from a corporate juridical person under the Civil Code to an
authorized corporation under the Securities and Exchange Law.
April 1994
Financial institutions authorized to undertake securities business joined the association as
special members.
April 1995
South Kyushu District Office was consolidated into the Kyushu District Office.
July 1998
JSDA integrated the Bond Underwriters Association of Japan.
February 2001
JSDA entrusted the operation of the Over-the-Counter stock market to a market operation
company.
July 2004
JSDA changed to the new structured organization consisting of three departments: Selfregulation, Securities Strategic Policy, and General Affairs and Administration. JSDA also
merged with the Association of Tokyo Stock Exchange Regular Members.
December 2004
JSDA closed the Over-the-Counter Trading Securities Market and the Jasdaq Securities
Exchange, Inc. started business.
April 2005
JSDA integrated the Japan Institute for Securities Information and Public Relations.
36
Annual Report 2006
1. Establishment and Execution of Self-regulatory Rules
JSDA has established many kinds of self-regulatory rules to be applied to
the members of the association, for enhancing fair and smooth trading in
securities in order to promote efficient administration of the securities
markets.
2. Execution of On-site Inspection and Off-site Monitoring
JSDA conducts on-site inspections in relation to internal administration
system and compliance with the statutory laws and regulations or selfregulatory rules concerning the securities business activities of members of
the association or their employees. JSDA is also monitoring the
management and segregated custody by securities companies.
3. Exercise of Self-regulatory Disciplinary Actions
In cases of violation of the statutory laws and regulations or our selfregulatory rules by members of the association or securities company
employees, the JSDA strictly enforces self-regulatory disciplinary action.
4. Qualification Examination, Qualification Renewal Training and
Registration of Securities Sales Representatives
JSDA conducts qualification examinations for securities sales
representatives and internal administrators and regulatory training courses
such as Qualification Renewal Training in consideration of the high public
status of the securities business and the importance of its social obligations,
and carries out registration of securities sales representatives, which is
entrusted to it by the Commissioner of the Financial Services Agency.
5. Counseling concerning Customer Complaints
JSDA provides mediation services to settle disputes between members of
the association and their customers by assigning Mediating Consultants to
each district office and also providing counseling services concerning
complaints about business of the members and securities sales agents from
customers.
6. Improvement and Expansion of the OTC Bond Market
Profile
Japan Securities Dealers Association (JSDA) is the sole corporative organization in Japan authorized by the
Prime Minister under the Securities and Exchange Law (Paragraph 2 of Article 68), and consists of all the
securities companies and registered financial institutions (as members of the association).
Members of the association are categorized into two groups: regular members and special members.
Securities companies, including foreign securities companies, are regular members. Registered financial
institutions join the association as special members.
The purposes of the JSDA are as follows: (1) to protect investors by ensuring fair and smooth trading in
securities and other transactions by members of the association; (2) to promote the implementation of policy
measures for the revitalization of the Japanese securities markets in order to contribute to the growth and
development of the Japanese economy.
(1) Reform of the OTC Bond Market System
Most bonds and debentures are usually traded on the OTC market in
Japan. To enhance fair and efficient bond transaction, the JSDA is
trying to reform or rationalize the OTC bond market by establishing or
revising systems or business practices related to OTC bond transactions.
Annual Report 2006
37
(3) Statistics and Collection of Data about the Bond Market
To promote fair and efficient bond transactions, the JSDA collects and
compiles data and information related to bonds and provides many
different statistics and useful reference information and data for
members of the association and investors through the Internet.
7. Administration of Off-exchange Transactions of Listed Stocks
(1) Reform of Off-exchange Transaction System
JSDA improves the system of off-exchange transactions of listed stocks
to make it more fair and efficient and ensure investor protection.
(2) Statistics and Collection of Data about Off-exchange Transactions
JSDA calculates and reserves data and information related to offexchange transactions of listed stocks and provides useful reference
information and data for members of the association and investors.
8. Improvement and Expansion of the “Green Sheet”
(1) Management of Green Sheet Issues
JSDA specifies the securities as Green Sheet Issues and revokes the
designation.
(2) Dissemination of Information about Green Sheet
JSDA publishes information about issuing companies of Green Sheet
Issues, quotations and transaction and other information with regard to
Green Sheet system through Internet or other channels.
(3) Reform of Green Sheet System and Transaction System for Unlisted Securities
To promote efficient financing by unlisted companies and smooth
circulation of unlisted securities as well as ensure investor protection,
the JSDA improves the Green Sheet system.
38
Annual Report 2006
II. ACTIVITIES AS TRADE ASSOCIATION
1. Research and Study, and Representations on the Securities Industry
In order to enhance the revitalization of the Japanese securities markets
and to contribute to Japan’s economic growth and development, the JSDA
is carrying out a comprehensive structural reform of the securities markets
and researches and studies the concrete items for the reform, while
presenting our proposals to the government and other parties concerned
for their realization.
2. Public Awareness and Dissemination of Knowledge on Securities
JSDA promotes public awareness and dissemination of exact knowledge on
securities among students and the general public and is trying to expand
the base of individual investors.
3. Liaison and Mediation among Concerned Organizations
JSDA executes the required measures related to securities and securities
markets by maintaining good liaison between securities companies and
other organizations concerned and mediating various opinions for the
implementation of policy measures.
4. Upgrading and Rationalization of the Business Administration and
Training of Employees in Securities Companies
JSDA has promoted the introduction of the unified accounting rules in the
securities industry and conducted financial analysis of its members for the
purpose of ensuring the sound growth and development of securities
companies. JSDA is now promoting the upgrading and rationalization of
administration in securities companies as well as training their employees
in response to progress involving the latest trading methods, such as
electronic transaction.
III. INTERNATIONAL BUSINESS AND EXCHANGE
In response to the globalization of the securities markets, the JSDA actively
participates in international conferences and is exchanging information or
deepening relationships with overseas organizations related to the
securities industry.
Annual Report 2006
Profile
(2) Publication of Reference Prices (Yields) for OTC Bond Transactions
To provide reference information for members of the association and
investors, the JSDA publicizes reference prices of about 5,000 bonds.
39
(3) Statistics and Collection of Data about the Bond Market
To promote fair and efficient bond transactions, the JSDA collects and
compiles data and information related to bonds and provides many
different statistics and useful reference information and data for
members of the association and investors through the Internet.
7. Administration of Off-exchange Transactions of Listed Stocks
(1) Reform of Off-exchange Transaction System
JSDA improves the system of off-exchange transactions of listed stocks
to make it more fair and efficient and ensure investor protection.
(2) Statistics and Collection of Data about Off-exchange Transactions
JSDA calculates and reserves data and information related to offexchange transactions of listed stocks and provides useful reference
information and data for members of the association and investors.
8. Improvement and Expansion of the “Green Sheet”
(1) Management of Green Sheet Issues
JSDA specifies the securities as Green Sheet Issues and revokes the
designation.
(2) Dissemination of Information about Green Sheet
JSDA publishes information about issuing companies of Green Sheet
Issues, quotations and transaction and other information with regard to
Green Sheet system through Internet or other channels.
(3) Reform of Green Sheet System and Transaction System for Unlisted Securities
To promote efficient financing by unlisted companies and smooth
circulation of unlisted securities as well as ensure investor protection,
the JSDA improves the Green Sheet system.
38
Annual Report 2006
II. ACTIVITIES AS TRADE ASSOCIATION
1. Research and Study, and Representations on the Securities Industry
In order to enhance the revitalization of the Japanese securities markets
and to contribute to Japan’s economic growth and development, the JSDA
is carrying out a comprehensive structural reform of the securities markets
and researches and studies the concrete items for the reform, while
presenting our proposals to the government and other parties concerned
for their realization.
2. Public Awareness and Dissemination of Knowledge on Securities
JSDA promotes public awareness and dissemination of exact knowledge on
securities among students and the general public and is trying to expand
the base of individual investors.
3. Liaison and Mediation among Concerned Organizations
JSDA executes the required measures related to securities and securities
markets by maintaining good liaison between securities companies and
other organizations concerned and mediating various opinions for the
implementation of policy measures.
4. Upgrading and Rationalization of the Business Administration and
Training of Employees in Securities Companies
JSDA has promoted the introduction of the unified accounting rules in the
securities industry and conducted financial analysis of its members for the
purpose of ensuring the sound growth and development of securities
companies. JSDA is now promoting the upgrading and rationalization of
administration in securities companies as well as training their employees
in response to progress involving the latest trading methods, such as
electronic transaction.
III. INTERNATIONAL BUSINESS AND EXCHANGE
In response to the globalization of the securities markets, the JSDA actively
participates in international conferences and is exchanging information or
deepening relationships with overseas organizations related to the
securities industry.
Annual Report 2006
Profile
(2) Publication of Reference Prices (Yields) for OTC Bond Transactions
To provide reference information for members of the association and
investors, the JSDA publicizes reference prices of about 5,000 bonds.
39
ORGANIZATIONAL STRUCTURE OF THE JAPAN SECURITIES
DEALERS ASSOCIATION
1. Central Bodies
JSDA has the following central bodies for decision-making and so on.
• General Assembly: supreme body for decision-making
• Board of Governors: body to make an arbitrary decision on items related
to overall association management and to assume a responsibility for
supervision
• Self-regulation Board: body entrusted by the Board of Governors with
decision-making for self-regulatory business
• Securities Strategic Policy Board: body entrusted by the Board of
Governors with decision-making for business strategy related to vitalizing
securities market
•General Affairs Committee: body under the Board of Governors which
deliberates overall matters about operating the association
HEAD OFFICE
5-8, Kayaba-cho Nihonbashi 1-chome, Chuo-ku, Tokyo 103-0025
Tel: +81-3-3667-8451
Fax: +81-3-3666-8009
2. District Offices
JSDA has nine district offices throughout the nation and each district office
has Segregated District Council and District Disciplinary Committee.
3. Affiliated Bodies
JSDA has Sales Representative Examination Committee, Mediating
Consultants as well as Securities Education and Public Relation Committee
as affiliates.
THE JSDA ON THE INTERNET
JSDA
http://www.jsda.or.jp/
JSDA (English website)
http://www.jsda.or.jp/html/eigo/index.html
Foreign Securities Transaction
http://www.jsda.or.jp/html/foreign/index.html
Green Sheet Market
http://www.jsda.or.jp/html/greensheet/index.html
Price information, etc., release system of PTS
http://www.pts-info.jp/
Reform Promotion Center for Securities Clearing and Settlement System (English website)
http://www.kessaicenter.com/index_e.html
40
Annual Report 2006
ORGANIZATIONAL STRUCTURE OF THE JAPAN SECURITIES
DEALERS ASSOCIATION
1. Central Bodies
JSDA has the following central bodies for decision-making and so on.
• General Assembly: supreme body for decision-making
• Board of Governors: body to make an arbitrary decision on items related
to overall association management and to assume a responsibility for
supervision
• Self-regulation Board: body entrusted by the Board of Governors with
decision-making for self-regulatory business
• Securities Strategic Policy Board: body entrusted by the Board of
Governors with decision-making for business strategy related to vitalizing
securities market
•General Affairs Committee: body under the Board of Governors which
deliberates overall matters about operating the association
HEAD OFFICE
5-8, Kayaba-cho Nihonbashi 1-chome, Chuo-ku, Tokyo 103-0025
Tel: +81-3-3667-8451
Fax: +81-3-3666-8009
2. District Offices
JSDA has nine district offices throughout the nation and each district office
has Segregated District Council and District Disciplinary Committee.
3. Affiliated Bodies
JSDA has Sales Representative Examination Committee, Mediating
Consultants as well as Securities Education and Public Relation Committee
as affiliates.
THE JSDA ON THE INTERNET
JSDA
http://www.jsda.or.jp/
JSDA (English website)
http://www.jsda.or.jp/html/eigo/index.html
Foreign Securities Transaction
http://www.jsda.or.jp/html/foreign/index.html
Green Sheet Market
http://www.jsda.or.jp/html/greensheet/index.html
Price information, etc., release system of PTS
http://www.pts-info.jp/
Reform Promotion Center for Securities Clearing and Settlement System (English website)
http://www.kessaicenter.com/index_e.html
40
Annual Report 2006
ANNUAL REPORT
2006
JAPAN
SECURITIES
DEALERS
ASSOCIATION

Annual Report 2006

Transcription

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