Japan Securities Depository Center (Jasdec) went live with ISO 20022 on SwiftNet on January 6 2014, the first major securities market infrastructure to use the international standard for end-toend settlement. Market participants have until December 2018 to migrate their messaging standards from existing formats to ISO 20022.

 Jasdec has also been working with market participants to finalise revised operational procedures for US Samurai bonds, which are expected to be effective from January 1 2016. 

Among the Bank of Japan’s various efforts to encourage more foreign investors to trade and hold government bonds, the change of rules for taxability of bonds through the revision of the Special Tax Measures Act is significant due to its potential impact on non-residents says Satoshi Ishikawa, senior vice president, custody sales and marketing team settlement and clearing services division at Mizuho Bank.

“On and after January 1 2016, the taxability of a bond will depend solely on the status of the bond holder as of its coupon date – in other words, the interest will not be taxed for the whole coupon period as long as the bond is held by a non-taxable entity on its coupon date.” 

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