Nihon Keizai Shimbun, Inc., Financial Technology Research Institute, Inc., Nomura Securities Co., Ltd., and Nomura Research Institute, Ltd. Join Forces to Develop "JS Price" for Mark-to-Market Evaluation of Bond Prices - Aim to Mark 50,000 Issues with Fair and Square Market Prices
November 15, 2001
Nomura Research Institute, Ltd.
Nomura Research Institute, Ltd.
Nihon Keizai Shimbun, Inc.
Financial Technology Research Institute, Inc.
Nomura Securities Co., Ltd.
Nomura Research Institute, Ltd.
Nihon Keizai Shimbun, Inc. (Nikkei: Chiyoda-Ku, Tokyo; Takuhiko Tsuruta, President & CEO), Financial Technology Research Institute, Inc. (FTRI: Chuo-Ku, Tokyo; Yasuhiro Harada, President), Nomura Securities Co., Ltd. (Nomura: Chuo-Ku, Tokyo; Junichi Ujiie, President), and Nomura Research Institute, Ltd. (NRI: Chiyoda-Ku, Tokyo; Shozo Hashimoto, President & CEO) announced today that they have reached an agreement to jointly develop and release "JS Price," a new standard for bond prices. Designed to serve the needs of market participants to evaluate bond prices at market value under the mark-to-market accounting system, "JS Price" is expected to debut by February 2002 via the companies' various information services.
The mark-to-market accounting method will come into full effect starting with the business term ending in March 2002. Financial institutions and all companies required to create and submit financial statements will have to evaluate all of their bond holdings according to market prices.
In Japan, most bonds are traded over the counter, and this has long made it difficult for market participants to grasp accurate market prices. "JS Price" is epoch-making in that it not only manages to properly reflect daily trading prices of bond dealers, but is also theoretically backed by an abundance of operational know-how and state-of-the-art financial technologies owned by the four companies. In the era of mark-to-market accounting, "JS Price" surely deserves the status of being the market standard.
(Outline of "JS Price")
Financial Technology Research Institute, Inc.
Nomura Securities Co., Ltd.
Nomura Research Institute, Ltd.
Nihon Keizai Shimbun, Inc. (Nikkei: Chiyoda-Ku, Tokyo; Takuhiko Tsuruta, President & CEO), Financial Technology Research Institute, Inc. (FTRI: Chuo-Ku, Tokyo; Yasuhiro Harada, President), Nomura Securities Co., Ltd. (Nomura: Chuo-Ku, Tokyo; Junichi Ujiie, President), and Nomura Research Institute, Ltd. (NRI: Chiyoda-Ku, Tokyo; Shozo Hashimoto, President & CEO) announced today that they have reached an agreement to jointly develop and release "JS Price," a new standard for bond prices. Designed to serve the needs of market participants to evaluate bond prices at market value under the mark-to-market accounting system, "JS Price" is expected to debut by February 2002 via the companies' various information services.
The mark-to-market accounting method will come into full effect starting with the business term ending in March 2002. Financial institutions and all companies required to create and submit financial statements will have to evaluate all of their bond holdings according to market prices.
In Japan, most bonds are traded over the counter, and this has long made it difficult for market participants to grasp accurate market prices. "JS Price" is epoch-making in that it not only manages to properly reflect daily trading prices of bond dealers, but is also theoretically backed by an abundance of operational know-how and state-of-the-art financial technologies owned by the four companies. In the era of mark-to-market accounting, "JS Price" surely deserves the status of being the market standard.
(Outline of "JS Price")
| 1. | Pricing Method | |
| Target issues are to be priced on a daily basis. The basic methodology for pricing is outlined below. The four companies will continue to work together in order to further enhance the accuracy and validity of calculated prices. | ||
| (1) | Prices of target issues are to reflect daily trading quotes in the bond market as best as possible. Various pricing factors, such as types of issues, terms to maturity, and credit risks, will be examined carefully according to each day's closing quotations of swap rates and JGB prices. | |
| (2) | The four companies will check the integrity of the pricing procedure and accuracy of prices (adjustments will be made if necessary). | |
| 2. | Target Issues | |
| During the initial stage, target issues will be limited to about 20,000, consisting of domestic and yen-denominated foreign bonds (public and non-public issues). The number of target issues will eventually expand to a total of 50,000. | ||
| 3. | Distribution Start Date | |
| Daily distribution of "JS Price" is expected to commence by the end of February 2002 via the information services listed in Item 4. *Before official distribution, sample data testing will be administered beginning early next year for quality assurance purposes. |
||
| 4. | Principal Information Services for Distribution of "JS Price" | |
| NEEDS (Nikkei), Bond MIS (Nomura), Bond Navigator (Nomura), IDS (NRI), PLEIADES (NRI) *Prices of major issues will be published in the Nihon Keizai Shimbun (newspaper) on a daily basis. |
||
For further information, please contact:
Nihon Keizai Shimbun, Inc.
Financial Information Department Electronic Media Bureau (Saito / Ujiie)
Phone: 81-3-5255-9181
Financial Technology Research Institute, Inc. (Miyoshi / Hotta)
Phone: 81-3-5644-3440
Nomura Securities Co., Ltd.
Corporate Communications Department Nomura Group Headquarters (Kashiwagi / Iiyama)
Phone: 81-3-3278-0591
Nomura Research Institute, Ltd.
Corporate Communications Department (Idutsu / Tokushige)
Phone: 81-3-5255-1981
To List of Press Releases
Nihon Keizai Shimbun, Inc.
Financial Information Department Electronic Media Bureau (Saito / Ujiie)
Phone: 81-3-5255-9181
Financial Technology Research Institute, Inc. (Miyoshi / Hotta)
Phone: 81-3-5644-3440
Nomura Securities Co., Ltd.
Corporate Communications Department Nomura Group Headquarters (Kashiwagi / Iiyama)
Phone: 81-3-3278-0591
Nomura Research Institute, Ltd.
Corporate Communications Department (Idutsu / Tokushige)
Phone: 81-3-5255-1981
To List of Press Releases
Inquiries:webmaster@nri.co.jp
Copyright(c) 2001 Nomura Research Institute, Ltd. All rights reserved.
No reproduction or republication without written permission.
Copyright(c) 2001 Nomura Research Institute, Ltd. All rights reserved.
No reproduction or republication without written permission.