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Handling of Over-lent Stock Issues in Loans for Margin Transactions |
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| Handling of over-lent issues in Loans for Margin Transactions |
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The over-lent issues in Loans for Margin Transactions should be handled as follows:
| 1. |
When stock exchanges open its morning session on the day following the date of application, JSF will disclose the number of shares of over-lent issues whose stock loan balance exceeds the margin loan balance. |
| 2. |
In respect of the above-mentioned issues, JSF will accept applications for additional repayment of stock loans (including the cancellation of stock loan applications), applications for additional margin loans (including the cancellation of repayment) and stock loan applications for bidding between 8:30 and 10:00 A.M. on the day following the application. However, JSF may reject stock loan applications for bidding which are considered to be prejudicial to the smooth operation of loans for margin transactions. (Similar provisions are made in respect of stock loan applications for bidding, as referred to in paragraph 8).
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| 3. |
The additional applications and stock loan applications for bidding referred to in the above paragraph should be made in accordance with a designated format. When a general trading participant is commissioned by a non-clearing member to engage in trading based on these applications, the non-clearing member should submit the applications on behalf of the general trading participant. |
| 4. |
The stock loan application for bidding shall be accepted with a bidding rate which is lower than the maximum premium charge indicated in the attached table. (The premium charge shall be applicable to one share, except the "premium charge per investment unit" in the attached table).
However, with regard to stock loan applications for bidding for issues in respect of which a notice of precaution on the use of stock loan has been issued, or in respect of which margin loan applications have been restricted or suspended, or which have been placed after 9:30 A.M., the bidding rate should be higher than ¥5. In respect of an issue whose trading unit (to be determined by a stock exchange) is not one share, the bidding rate should be the value calculated by dividing ¥5 by the units of trade. If this calculated value is less than ¥0.05, the bidding rate shall be ¥0.05. |
| 5. |
The bidding rate unit should be ¥5 per share. For an issue whose trading unit is not one share, the bidding rate unit should be the value calculated by dividing ¥5 by its units of trade. If this calculated value is less than ¥0.05, the unit of bidding rate shall be ¥0.05. |
| 6. |
Additional applications and stock loan applications for bidding to over-lent issues should be appropriated in the following order: |
| (1) |
Additional applications for repayment of stock loans and new applications for margin loan are appropriated first. Earlier applications will be accepted earlier for appropriation. |
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| (2) |
In respect of stock loan applications for bidding, those with a lower bidding rate should be appropriated earlier. If the bidding rate is the same, those applied for earlier should be appropriated earlier. If several applications have been made at the same time, the order of application shall be determined by means of a draw. In this instance, all stock loan applications for bidding accepted before 9:30 A.M. are considered to have been accepted at 9:30 A.M. |
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| 7. |
When the necessary number of shares is procured by stock loan application for bidding with a bidding rate below ¥50 per share, in accordance with the procedures described in the preceding paragraphs, the highest bidding rate accompanying the application shall be the lending rate ("premium charge") for that issue. With regard to issues whose trading unit is not one share, the unit of bidding rate should be the value calculated by dividing ¥50 by its units of trade. If this calculated value is less than ¥0.50, the unit of bidding rate should be ¥0.50. This principle applies throughout this document. |
| 8. |
When the necessary number of shares cannot be procured by stock loan application for bidding by means of the procedures described in paragraph 7, the closing time for the bidding application will be extended until 10:30 A.M. and accepted with a bidding rate greater than ¥50. When the necessary number of shares is procured in accordance with the procedures described in this paragraph, the highest bidding rate accompanying the application shall be the premium charge. |
| 9. |
When the necessary number of shares cannot be procured in accordance with the procedures described in paragraph 8 and when the procurement of some or all of the necessary number of shares without recourse to the methods described in the preceding paragraphs is considered appropriate, the maximum premium charge listed in the attached table will be applied as the bidding rate for this issue. In this case, JSF will procure stocks for the shortfall in the necessary number of shares by other means, such as individual negotiation with optional counterparts, while maintaining close co-operation with stock exchanges. |
| 10. |
When the necessary number of shares is still not procured even by the use of these means, JSF may postpone the closing of applications for stock loans and/or applications for loan repayments. |
| 11. |
The premium charge determined in accordance with the preceding paragraphs shall be regarded as the premium charge of that issue as stipulated in Article 23 of "Rules on the Lending for Loans for Margin Transactions". However, for cases referred to in paragraphs 9 and 10, the premium charge can be determined independently in discussion with stock exchanges. |
| 12. |
If an over-lent issue is not a stock certificate, the term used for gstockh in each paragraph shall be interpreted in accordance with the types of security used in replacement of the term gstockh. |
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Investment unit
(Value calculated by multiplying the margin loan price by trading unit) |
¥ 50,000 or less |
Over ¥50,000 |
| Upper limit of premium charge per investment unit |
¥100
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¥100 plus ¥100 for each investment unit of ¥50,000 |
| 1. |
The upper limit of premium charge (maximum premium charge) per share is calculated by dividing the upper limit of premium charge per investment unit listed above by the trading unit. If a maximum premium charge is ¥1 or less, the upper limit is ¥1.50, and if the charge is over ¥1, it is rounded to the nearest yen above. |
| 2. |
The maximum premium charge applicable to the margin loan applications for the following issues should be those provided in the following categories (1) - (4), whereas if it falls under (1) or (2) and (3) or (4) the charge is calculated by doubling the maximum premium charge provided in (1) or (2). |
| (1) |
With regard to issues for which the ex-dividend or ex-rights day has been determined by the stock exchanges, or to issues for which the General Shareholders Notification is given to stocks handled by Japan Securities Depository Center, Inc. (JASDEC) in their Book-entry Transfer Business under the provisions of the Law concerning Book-entry Transfer of Corporate Bonds, Stocks and other securities, In the following paragraphs, "date" refers to the ex-dividend or ex-rights day or 2 business days before that on which the shareholders who are to receive a General Shareholders Notification are determined: |
| i) |
For applications submitted between 6 and 2 business days prior to the date,
The premium charge is twice that determined in Paragraph 1 above.
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| ii) |
For applications submitted on the day before the date,
The premium charge is a four times that determined in Paragraph 1 above.
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| (2) |
With regard to issues which are handled by JASDEC in its Depository and Book-Entry Transfer Business for Foreign Stock Certificates, Etc. and for which Beneficial Stockholders of Foreign Stock Certificates, Etc. is notified based on the JASDEC's gBusiness Regulations Relating to The Depository and Book-entry Transfers of Foreign Stock Certificates, Etc.h, (excluding the issues in the above paragraph (1)), for applications submitted between 8 and 4 business days before the date when the Beneficial Stockholders of Foreign Stock Certificates are determined (including the day that JASDEC designates to exercise voting rights of shareholders meetings as a proxy of the beneficial shareholders of foreign stocks):
The premium charge is twice that determined in Paragraph 1 above.
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| (3) |
With regard to issues in respect of which a notice of precaution on the use of stock loan, etc., has been released, for applications submitted from the following day after the notice is released until the day on which the notice is cancelled:
The premium charge is twice that determined in Paragraph 1 above.
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| (4) |
With regard to issues for which margin loan applications have been restricted or suspended, for applications submitted between the date of the restriction or suspension and the day before it is lifted:
The premium charge is twice that determined in Paragraph 1 above.
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| 3. |
If there is, or might be, an unusual stock over-lent situation, due to drastic changes in stock markets or to a shortage of stock certificates, the maximum premium charge in the above column should be quadrupled as a special temporary arrangement. If there is, or might be, an extremely unusual stock over-lent situation, the maximum premium charge in the above column should be increased tenfold as a special temporary arrangement. |
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