As of November 4, 2015
Bank of Japan
Financial Markets Department

I.  Introduction

This document is an outline of outright purchases of CP (commercial paper [excluding asset-backed commercial paper and commercial paper issued by real estate investment corporations], dematerialized commercial paper issued by domestic corporations, commercial paper issued by real estate investment corporations, dematerialized commercial paper issued by real estate investment corporations, dematerialized commercial paper issued by foreign corporations with guarantees, asset-backed commercial paper, and dematerialized asset-backed commercial paper, hereinafter the same) and corporate bonds (corporate bonds and bonds issued by real estate investment corporations, hereinafter the same), which the Bank of Japan conducts based on the "Principal Terms and Conditions for Outright Purchases of CP and Corporate Bonds." Please note that the following information may change in the future.

II.  Principles

A.  Location of purchases

The Bank's Head Office (Operations Department).

B.  Bonds to be purchased

Among CP and corporate bonds, those deemed eligible by the Bank.

C.  Maximum outstanding amount of a single issuer's CP and corporate bonds to be purchased

The outstanding amount of a single issuer's CP and corporate bonds purchased by the Bank shall not exceed 100 billion yen per class of instrument. In addition, if the outstanding amount of a single issuer's CP or corporate bonds purchased by the Bank at the time of purchase exceeds 25 percent of the total amount of CP or corporate bonds issued by the particular issuer, in principle, three business days prior to the auction, such CP and corporate bonds shall be excluded from the list of CP and corporate bonds to be purchased.

D.  Method for auctions

A multiple-price competitive auction under the conventional method shall be conducted for each purchase in which counterparties bid their desired yield to the Bank.

III.  Auction

A.  Notification of auction guidelines (offer)

When conducting outright purchases of CP and corporate bonds, the Bank selects auction participants from eligible counterparties and notifies them of the following matters.

(a)	Total amount of offer
(b)	Purchase date and payment time for the purchasing price
(c)	Bid-submission cut-off date and time
(d)	Other matters deemed necessary by the Bank

B.  Submission of bids

Auction participants notify the Bank of their desired sale amount per issue per desired yield, and other matters determined by the Bank, by the bid-submission cut-off date and time notified in subsection A.

Auction participants may submit bids only when they have received confirmation, one business day prior to the auction, that the CP and corporate bonds they seek to sell satisfy the Bank's criteria.

C.  Acceptance of bids (notification of respective results to auction participants)

The Bank, after receiving bids as described in subsection B, accepts bids by starting with the highest desired yield and continuing down so that the amount purchased per single issuer's CP and corporate bonds remains within the unused purchase value (the amount after deducting, from the maximum outstanding amount of a single issuer's CP and corporate bonds to be purchased, the outstanding amount of CP and corporate bonds issued by the single issuer out of CP and corporate bonds held by the Bank). However, the Bank reserves the right to reject all or some bids when deemed appropriate.

When accepting bids, the Bank notifies auction participants who submitted bids as described in subsection B of the amount of CP and corporate bonds it will purchase per issue per yield. Here and hereinafter, those who receive such notifications will be referred to as sellers.

IV.  Purchases of CP and Corporate Bonds

The seller submits documents specified by the Bank by the cut-off time date and determined by the Bank.

The Bank pays the purchasing price to the seller by the purchase date and payment time notified in subsection III. A.