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Amendment to "Guidelines on Eligible Collateral"

September 8, 2005
Bank of Japan

At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided to take the following measures in light of recent developments in financial markets such as the volatility of market interest rates and changes in market practices, with a view to maintaining the soundness of the Bank's assets, contributing to market participants' efficient use of collateral, and facilitating efficient money market operations.

  1. The Bank shall amend margin tables used in accepting eligible collateral as well as in conducting repo operations and securities lending.
    See attachments 1-3 for the amended "Guidelines on Eligible Collateral," "Principal Terms and Conditions for the Purchase/Sale of Japanese Government Securities with Repurchase Agreements," and "Principal Terms and Conditions for the Sale of Japanese Government Securities with Repurchase Agreements to Provide the Markets with a Secondary Source of Japanese Government Securities."
  2. The Bank shall conduct a study to revise the current bill purchasing scheme in order to make operation-related transactions paperless.
    See Attachment 4 for the framework for revising the scheme.

Attachment 1

Amendment to "Guidelines on Eligible Collateral"

  • Table 1 shall be amended as follows.

Table 1

Categories of Collateral and Collateral Prices

(Special Provision)

(No change)

(Supplementary Provision)

  1. (1) These amendments shall become effective on a day designated by the Governor, which shall be no later than October 31, 2005.
  2. (2) "Categories and Prices of Collateral" prescribed in paragraph 3 shall be reviewed in light of conditions in financial markets about once a year in principle and shall be amended when necessary.

Attachment 2

Amendment to "Principal Terms and Conditions for the Purchase/Sale of Japanese Government Securities with Repurchase Agreements"

  • 7. (2) shall be amended as follows.
  • 8. (5) shall be amended as follows.

(Supplementary Provision)

  1. (1) These amendments shall become effective on a day designated by the Governor, which shall be no later than October 31, 2005.
  2. (2) "Margin ratios" prescribed in paragraph 7. (2) and "Collateral prices" prescribed in paragraph 8. (5) shall be reviewed in light of conditions in financial markets about once a year in principle and shall be amended when necessary.

Attachment 3

Amendment to "Principal Terms and Conditions for the Sale of Japanese Government Securities with Repurchase Agreements to Provide the Markets with a Secondary Source of Japanese Government Securities"

  • 8. (2) shall be amended as follows.

(Supplementary Provision)

  1. (1) These amendments shall become effective on a day designated by the Governor, which shall be no later than October 31, 2005.
  2. (2) "Margin ratios" prescribed in paragraph 8. (2) shall be reviewed in light of conditions in financial markets about once a year in principle and shall be amended when necessary.

Attachment 4

Framework for Revising the Current Bill Purchasing Scheme