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Review for Further Establishing Japan's Fails Practice

Revisions in Market Practice Based on the Final Report of JSDA's Working Group on Fails

April 2011
Financial Markets Department

The Working Group concerning Review of Fails Practice for Bond Trading was founded in May 2009 under the Japan Securities Dealers Association and had been reviewing Japan's Fails Practice with the intention of further establishing the Fails Practice while preventing frequent occurrence of Fails. In April 2010, the Working Group released its final report. The revised Fails Practice applies to a wide range of market participants who conduct outright purchase and sale transactions and repo transactions of Japanese government securities. The revisions became effective in November 2010. Market participants need to further establish Fails Practice by promptly developing business operations capable of handling Fails and the payment and receipt of Fails Charges.


Bank of Japan Review is published by the Bank of Japan to explain recent economic and financial topics for a wide range of readers. This report, 2011-E-3, is a translation of the original Japanese issue, Bank of Japan Review Paper No. 2010-J-9, published in June 2010.

If you have comments, questions, or requests for hard copies, please contact Market Infrastructure Group, Market Infrastructure Division, Financial Markets Department (E-mail: