Market Link Guide - Japan - Equities, ETFs and REITs


Key features

CSD link as defined under CSDRa


Type of link

Indirect via Hongkong and Shanghai Banking Corporation Limited (Tokyo Branch) to Japan Securities Depository Center, Inc (JASDEC)

a. CSD Regulation (EU) No 909/2014 art. 2 (29)




Japan Securities Depository Center, Inc (JASDEC)

Hongkong and Shanghai Banking Corporation Limited (HSBC), Tokyo branch







Country of incorporation


Hong Kong via its branch in Tokyo

Account type

Omnibus account


Legal Account name / holder

Omnibus account at JASDEC in the name of HSBC. There is no individually segregated account for CBL at JASDEC

Clearstream Banking SA

Operational arrangements

Settlement free of paymentYes 
Settlement against paymentYesEligible settlement currency: Japanese Yen (JPY).
Settlement against payment in central bank money account of CBL/CBL customersNoCBL holds a cash account at the custodian. Against payment settlement in JPY takes place on the cash account of the custodian at the Bank of Japan.
Bridge settlementNo 
Shaping facilityNo 
Partial settlementNo 
Settlement penalty feesYesRefer to the Market Profile.
Back-to-back processingYesBook entry equities only.
Automatic compensationNo 
Registered securitiesNo 
Multi Market SecuritiesYesRefer to the Multi Market Securities Guide.
Lending and borrowingNo 
Proxy votingYesNo physical attendance for AGM/EGM.
Investment FundsYesETF only (CBL Internal Settlement).
Liquidity Hub ConnectNo 
Sale and purchase of rightsNo 
Repo servicesYesCBL internal settlement.
Market restrictionsYesRefer to Investment Regulation.
Daily reconciliationYes 

Moment of entry of instructions

The rules of JASDEC do not define the moment of entry within the meaning of the Settlement Finality Directive.

Irrevocability of instructions

FOP settlements may be cancelled prior to the transfer at the request of the

deliverer. However, in DVP settlement, after matching and during the period until the transfer, the settlement may be cancelled prior to the transfer only by request from both the deliverer and the receiver.

Finality of instructions

Book-entry transfers become instantly final. In the case of transfer requests from the previous days where the book-entry transfers are performed in batches at night, the transfers become final at 8:00 p.m. (local time) on the business day preceding the date of settlement.

Legal Arrangements

The below section is based on the legal opinions obtained by CBL that were issued on 17 May 2018 (Hong Kong) and 28 September 2018 (Japan).  The information is provided for guidance only and should not be considered in isolation or as constituting a complete or definitive legal advice on any specific matter.

No insolvency proceedings against the custodian


Liability for negligence


Book-entry regime with in rem rights


Recognition of nominee concept

The laws and regulations of Japan do not have a concept equivalent to the nominee concept

No right of retention for the custodian


Segregation of assets at the custodian


No right of use


No upper-tier attachments


Insolvency of the custodian with no impact on CBL's rights 


Cash held by the custodian will only give rise to an unsecured claim against the estate of the custodian on insolvency.

Shortfall pro-rated among holders


Settlement finality in case of insolvency

There is no concept equivalent to finality under Japanese laws and regulations.

Record keeping of at least 10 years

The custodian has committed to record keeping period of at least 7 years in accordance with the statutory law requirement in Hong-Kong. Under the laws and regulations of Japan, custodians have the obligation to maintain records for at least 10 years.