ETF Lending System Suspension Decision
The Bank of Japan decided at the Policy Board and Monetary Policy Meeting on September 18-19, 2025, to partially amend the "Special Provisions for Lending of Index-Linked Exchange-Traded Fund Beneficiary Rights" (decided December 19, Reiwa 1). This amendment effectively suspends the ETF lending system introduced in December 2019.
Suspension Schedule and Transitional Measures
Suspension Timeline: No new ETF lending will be conducted from September 22, Reiwa 7 (2025) onward
Transitional Measures: Lending applications received through September 19, 2025, will continue to be implemented even after the system suspension
This partial amendment has been implemented immediately from September 19, 2025, marking the beginning of the gradual termination of the ETF lending system.
Background and Significance of System Introduction
The ETF lending system was introduced in December 2019 as a measure where the Bank of Japan lends ETFs (Index-Linked Exchange-Traded Fund Beneficiary Rights) held by the Bank to financial institutions and others. This system was designed to ensure liquidity in ETF markets and maintain efficient market functions.
Position of Policy Shift
This system suspension is part of monetary policy normalization following the Bank of Japan's decision in March 2024 to end new ETF purchases. Together with the ETF disposal policy decision, comprehensive review of the policy framework regarding the Bank of Japan's equity asset holdings is being advanced, representing an important milestone in the monetary policy normalization process. The decision to suspend the system is positioned as a review from the perspective of policy efficiency based on actual usage records, as stated "in light of usage conditions and other factors."