Japan

Reform to the securities settlement system

Noriaki Tanimoto, Clifford Chance, Tokyo. (+81 3 5561 6600).

In order to establish a safe and effective securities settlement system in Japan, the law concerning the establishment of relevant laws to improve securities markets through the reform of the securities settlement system was enacted on 5 June 2002, thereby paving the way for the coming into force of the law concerning book-entry transfer of corporate and other debt securities (the Transfer Law) on 6 January 2003. The Transfer Law provides for full dematerialization of corporate bonds, Japanese government bonds and bills (JGBs) as well as other securities, and enables title to these securities to be transferred by book entries on the accounts at settlement institutions.