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Shortening the Settlement Cycle of JGBs to T+1

Author

Listed:
  • Yuriko Watanabe

    (Bank of Japan)

  • Shunsuke Yoshida

    (Bank of Japan)

  • Masato Ui

    (Bank of Japan)

  • Asako Homma

    (Bank of Japan)

  • Yusuke Kitahama

    (Bank of Japan)

  • Shigeru Shimizu

    (Bank of Japan)

Abstract

In Japan, efforts to shorten the settlement cycle of Japanese government bonds (JGBs) have reached the final phase. Market participants and financial market infrastructures are currently working toward shortening the period from trading to settlement (settlement cycle) for outright transactions of JGBs from two business days (T+2) to one business day (T+1), aiming for implementation in the first half of fiscal 2018. At the same time, with regard to repurchase transactions (repos) of JGBs, which are closely related to outright transactions, preparations to introduce a new transaction scheme - GC repos under the Subsequent Collateral Allocation Method - are under way. Such efforts are expected to help reduce settlement risks arising from unsettled positions, and also enhance the efficiency, convenience and competitiveness of Japanese financial markets.

Suggested Citation

  • Yuriko Watanabe & Shunsuke Yoshida & Masato Ui & Asako Homma & Yusuke Kitahama & Shigeru Shimizu, 2016. "Shortening the Settlement Cycle of JGBs to T+1," Bank of Japan Review Series 16-E-14, Bank of Japan.
    • Handle: RePEc:boj:bojrev:rev16e14
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