Announcements

Home > Announcements > Releases 2000 > Revision of "Principal Terms and Conditions Pertaining to the Purchase of Bills"

Revision of "Principal Terms and Conditions Pertaining to the Purchase of Bills"

October 13, 2000
Bank of Japan

At the Monetary Policy Meeting held today, the Bank of Japan decided, with respect to bill purchasing operations, to revise the "Principal Terms and Conditions Pertaining to the Purchase of Bills" as below.

This revision is based on "Principles Regarding Revision of Bill Purchasing/Selling Operations", adopted at the Monetary Policy Meeting on April 27, 2000 and publicly released on the same date.

Attached is the revised text of the "Principal Terms and Conditions Pertaining to the Purchase of Bills".

  • Article 1 shall be revised as follows:
    1. Purpose
    Unless otherwise stipulated, theseThese Terms and Conditions govern the Bank of Japan's purchase of bills issued by financial institutions against pooled eligible collateral such as bills and securities , with the aim of facilitating money market operations.
  • Article 2 shall be revised as follows:
    2. Location of Operations
    At the Bank of Japan's head office (Operations Department) or its branch offices.
  • Article 7 shall be revised as follows:
    7. Collateral
    1. (1) The Bank shall accept, from eligible counterparties, eligible collateral as part of the pooled collateral.
    2. (2)"Guidelines on Eligible Collateral" (Policy Board Decision on October 13, 2000) shall apply to the collateral.
  • Article 8 shall be repealed.
    (Supplementary Provision)
    This revision shall become effective on the day of the introduction of RTGS for fund transfers among current accounts held at the Bank of Japan.
    The current terms and conditions shall apply to the purchases of bills conducted prior to the introduction of RTGS.

Attachment

Principal Terms and Conditions Pertaining to the Purchase of Bills

1. Purpose

These Terms and Conditions govern the Bank of Japan's purchase of bills issued by financial institutions against pooled eligible collateral, with the aim of facilitating money market operations.

2. Location of Operations

At the Bank of Japan's head office (Operations Department) or its branch offices.

3. Eligible Counterparties

Eligible counterparties shall, pursuant to the Bank's relevant rules, be selected from financial institutions (as defined in Article 37, Paragraph 1 of the Bank of Japan Law, Law No.89, 1997), domestic and foreign securities companies (Article 10, Paragraph 1, Clause 2 of the Bank of Japan Law Enforcement Order <Order No.385 of 1997> and Article 10, Paragraph 1, Clause 4 of the same Order, respectively), securities finance companies (Article 10, Paragraph 1, Clause 3 of the Order), and tanshi companies (Article 10, Paragraph 1, Clause 5 of the Order).

4. Bills to be Purchased

The Bank shall purchase bills issued by financial institutions whose drawers, drawees, and payees are the financial institutions themselves. Drawees must have completed acceptance of the bills, and the maturity date of eligible bills must be within three months starting from the next date of purchase.

5. Purchasing Method

Bills shall be purchased through a discount method. The rate of discount is determined by the conventional method in competitive auction.

6. Purchase Dates and Amount of Bills to be Purchased

Taking into account the situation in financial markets, the Bank shall determine necessary details, including purchase dates, amount of bills to be purchased, and counterparties every time it conducts the operations.

7. Collateral

  1. (1) The Bank shall accept, from eligible counterparties, eligible collateral as part of the pooled collateral.
  2. (2) "Guidelines on Eligible Collateral" (Policy Board Decision on October 13, 2000) shall apply to the collateral.