JBA Releases Administrative Procedures for Holding e-Stocks as Collateral

On September 22, JBA released administrative procedures for stock collateral after stock certificates are dematerialized.

All listed stocks will become paperless and be processed electronically in January 2009. The securing of stocks as collateral, a process presently involving paper stock certificates, will be conducted through the new stock transfer system in the Japan Securities Depository Center (JASDEC). Specifically, when banks lend loans secured by stocks, the borrower's stocks held in his/her "owner account" at JASDEC will be transferred to the bank's "collateral holder account" in the same organization.

The released structure is still not final and may be modified depending on future deliberations of parties concerned.