The update directly regulates trading and settlement practices for Japanese Government Bonds (fixed-income securities) executed by JSDA member firms, establishing market conventions for bond transactions that fall squarely within Fixed Income regulation.
Mandatory inheritance: Fixed Income as the primary tag automatically triggers Investment Services as the secondary tag, reflecting the asset-management and trading dimension of bond market operations.
Specialism
The update establishes market practice guidelines for when-issued JGB transactions, which relates to regulatory reporting and transaction settlement procedures, though the content is primarily technical market infrastructure guidance rather than a core regulatory mandate.
The guideline addresses market conduct and settlement procedures for JGB transactions, which touches on conduct of business standards, though the primary focus is operational market practice rather than firm-to-consumer conduct.
2026-03-13 09:55:04·rghosh@vixio.com
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TITLE: Japan Securities Dealers Association Updates Guideline for When-Issued Transactions of Japanese Government Bonds
BODY:
On January 19, 2026, the Japan Securities Dealers Association (JSDA) enforced an updated guideline governing when-issued (WI) transactions of Japanese Government Bonds (JGBs). The guideline establishes market practices for JGB transactions executed before the official issue date, subject to the condition that the relevant JGB is issued on the originally planned date.
WI transactions represent JGB transactions executed by market participants, primarily JSDA member firms, for a set period before the issue date and settled on or after the issue date. The guideline distinguishes between two categories: JGB transactions prior to the auction (executed from the Ministry of Finance's auction announcement until the official release of the serial number and coupon rate on the auction date) and WI transactions after the auction.
For JGB transactions prior to the auction, the guideline specifies execution methods based on bond type. Fixed coupon JGBs are transacted on a semi-annual compound yield basis, while floating-rate JGBs are concluded with a spread from the reference rate. Traded prices are calculated using formulas provided in the guideline's appendix, with flexibility permitted where market conditions or practices warrant alternative pricing arrangements. Settlement occurs on the originally planned issue date, unless parties agree otherwise.
The guideline addresses procedures for auction postponement or cancellation. If the Ministry of Finance cancels or postpones the issuance, WI transaction contracts are deemed cancelled as the condition precedent is not fulfilled. However, if a JGB reopening occurs (additional issuance of an identical existing JGB), the condition precedent is deemed accomplished and settlement proceeds using the existing relevant JGB.
Market participants should ensure compliance with the Financial Instruments and Exchange Act when conducting WI transactions as part of their business operations.