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Principal Terms and Conditions Pertaining to the Purchase of Bills (Invalid)


April 27, 2000

Revision:October 13, 2000
March 19, 2001
May 18, 2001
September 18, 2002
October 30, 2002

1. Purpose

These Terms and Conditions prescribe the principles for 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 Head Office (Operations Department) or Branch Offices of the Bank.

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, excluding the Resolution and Collection Corporation and bridge banks <as defined in Article 2, Paragraph 13 of the Deposit Insurance Law, Law No.34, 1971>), 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 financial institutions themselves. Drawees must have completed acceptance of the bills, and the date of maturity of eligible bills must be within one year from the next date of purchase.

5. Purchasing Method

Bills shall be purchased through a discount method. The rate of discount is determined by multiple-rate competitive auction.

6. Dates for purchase, Amount of Bills to be Purchased, etc.

Taking into account conditions in financial markets, the Bank shall determine specifications necessary for purchases, including dates, amount of bills to be purchased, and counterparties, for each purchase.

7. Collateral

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