Settlement Facility
- A settlement facility providing settlement function is classified into two categories: Central Securities Depository (CSD) for settlement of securities, and banks for settlement of funds (including the Bank of Japan). CSD stores securities that are deposited by participants and processes the transfer of securities among participants by book-entry transfer (making changes in records on the books) without physical delivery and receipt of certificates. In this aspect, the CSD offers similar functions as a bank offers in cash settlement.
- Japan Securities Depository Center, Inc. (JASDEC) is the CSD for shares while Bank of Japan bears the CDS role for government bonds. Securities companies, banks, clearing institutions, etc. have participant accounts with the CSDs.
- Among the fund settling banks designated by JSCC or Bank of Japan, each participant shall selects one of them as its fund settling bank and funds settlement is taken place through that bank. With regards to a fund settling bank, it is required to establish sound financial foundations and smooth administrative system, as well as to ensure close communication channels in case of emergency. Hence JSCC has designated banks that have branches located near JSCC.
Currently, JSCC designates six banks as fund settling banks: the Bank of Tokyo-Mitsubishi UFJ, Ltd.; Sumitomo Mitsui Banking Corporation; Resona Bank, Ltd.; Mizuho Corporate Bank, Ltd.; the 77 Bank, Ltd. and Citibank Japan Ltd.
