(Reference) The Outline of the Stock Purchasing Plan
Some editorial revisions have been made to the English translation since it was initially released on October 11, 2002.
The original Japanese text, however, remains entirely unchanged.
October 11, 2002
Bank of Japan
The outline of the stock purchasing plan based on the "Stock Purchase Guidelines" is as follows.
1. Purchase of Stocks
- (1) Eligible institutions
A bank whose stockholdings exceed its Tier I capital.
- (2) Eligible stocks
Listed stocks with a rating of BBB- and above; and
- 1) such stocks need to be actually traded on a stock exchange for 200 days or more per year, and
- 2) such stocks need to have an annual turnover of 20 billion yen or more on a stock exchange.
- (3) Method
BOJ will establish a trust and purchase stocks as trust property.
- (4) Price
BOJ will purchase stocks at the market price (the lesser of [a] the volume-weighted average price or [b] the day's closing price).
- (5) Period
BOJ will purchase stocks until end-September 2003 (the period can be extended until end-September 2004 if the cumulative amount of purchased stocks does not reach 2 trillion yen by end-September 2003).
- (6) Size
BOJ will purchase a total of 2 trillion yen worth of stocks.
- (7) Limit per bank
The maximum amount of stock BOJ will purchase from a bank will not exceed the lesser of
- (a) the amount exceeding the bank's Tier I capital, or
- (b) 500 billion yen.
- (8) Limit per issuer
The maximum amount/number of shares per issuer will not exceed the lesser of
- (a) 5 percent of all voting rights, or
- (b) amounts set forth in the table below.
2. After Purchase
- (1) Stock disposal policy
BOJ will not sell purchased stocks until end-September 2007 (however, BOJ will respond to the issuer's request to sell shares at market price on the condition that BOJ does not suffer a loss).
BOJ will complete disposal of stocks by end-September 2017 (BOJ will consider the impact of its action on the stock market and the BOJ's risk of suffering losses).
- (2) Exercise of voting rights
BOJ will present basic principles regarding the exercise of voting rights to trust bank(s) ("the trustee"), and the trustee will exercise such rights taking due account of fiduciary responsibility (the trustee has a duty to exercise reasonable care and skill).
- (3) Loss reserve policy
BOJ will set aside amounts for unrealized loss on the purchased stocks (the difference between the market value and the book value) at end-September/March.
Upon government approval, BOJ will commence purchasing operations as soon as the necessary measures are in place.