Japan investments – Important update

All Japan’s financial markets will be closed between 26th April and 6th May. This is because Japan has called a national ten-day holiday to mark the ascension of the new Emperor. 
There is also a UK Bank holiday on Monday 6th May, during which time the usual Bank Holiday restrictions will apply to all funds.

OEIC and ISA investments

Three of our Japanese OEIC funds will be unavailable for trading between 26th April and 6th May 2019. The funds affected are as follows:


Fund Name Investment Company in which the Fund is held

Halifax Japanese Fund

HBOS International Investment Funds ICVC

Scottish Widows Japan Growth Fund

Scottish Widows Overseas Growth Investments Funds ICVC

Scottish Widows Japan Equity Fund

Scottish Widows Investment Solutions Funds ICVC

Any investors in these OEICs who want to make purchases or sales ahead of this restricted period should submit their instructions before the following cut off points:

  • Halifax Japanese Fund – by 11:59am on Friday 26th April
  • Scottish Widows Japan Growth Fund – by 5:00 pm on Thursday 25th April
  • Scottish Widows Japan Equity Fund – by 5:00 pm on Thursday 25th April


Life and Pension investments


The vast majority of Scottish Widows Life and Pension customers will be able to transact normally during the period of the market closure, including funds in the Scottish Widows range that invest exclusively in Japanese shares. For these funds, fund prices will be published as they normally would be from 26th April to 6th May. Scottish Widows will honour the prices published to any policyholders who are investing or liquidating their holdings.

The exception is Retirement Account customers who invest through Fund Supermarket. This closure will have an impact on 52 funds on the Fidelity Fund Supermarket available through the Scottish Widows Retirement Account. Our third party, Fidelity, is looking to minimise the impact of these suspensions for customers and will continue to accept requests for transactions, however it is important to note that these will not be processed during the market closure.

Usual Bank Holiday restrictions will apply to all funds on Monday 6th May, which means all Life and Pension customers will not be able to buy or sell holdings during the bank holiday. Normal trading will re-commence on 7th May after the Japanese holiday and UK Bank Holiday.

For further detail and information, please see the Q&A below.

Q & A

A national Japanese holiday has been announced, which will take place between 26th April and 6th May to mark the ascension of the new Japanese Emperor.
This means all Japan’s financial markets will be closed between 26th April and 6th May 2019.

As a result, all OEICs which invest exclusively in Japanese shares will be unavailable for trading under any circumstances during UK business hours between these dates.

This means that three of our Japanese OEIC funds will be unavailable for trading from 26th April to 6th May 2019. 

Life and Pension fund customers can continue to buy and sell holdings as normal throughout the period, with the exception of the Bank Holiday on Monday 6th May. However there is some impact on funds available through our Retirement Account Fund Supermarket.

All funds (Life, Pensions and OEICs) will also be subject to the usual UK Bank Holiday business closure.

Fund Code Fund Name Fund Type Investment Company

EQJAP

Japanese Fund

OEIC

HBOS International Investment Funds ICVC

SWOJG

Japan Growth

OEIC

Scottish Widows Overseas Growth Investment Funds ICVC

SWTJA

Japan Equity Fund

OEIC

Scottish Widows Investment Solutions Funds ICVC

OEICS:  Customers investing in OEICs that are not 100% invested in Japanese shares will continue to be able to instruct purchases or sales as usual, with the exception of the 6th May Bank Holiday in the UK (usual restrictions apply). An example of this type of OEIC is the Scottish Widows International Equity Tracker Fund, which invests globally, with only a small proportion of its assets in Japanese shares. This OEIC (and all other OEICs that invest only part of their holdings in Japanese shares) is not facing any trading restrictions within the period described in Question 1.

There are no other exceptions. As per Question 1, customers investing in OEICs that are 100% invested in Japanese shares will not be able to execute purchases or sales during the period under any circumstances. Any instructions or claims that are received during the period will be processed from Tuesday 7th May.

Life and Pension funds: Customers investing in Life or Pension funds will be able to transact as normal over the period, with the exception of the 6th May Bank Holiday (usual restrictions apply). We are implementing special procedures to allow this to happen for funds that are entirely invested in Japan: please see question 5 below for details.

OEICS: Any regular payments that would normally be invested into the impacted OEIC funds will be processed on or shortly after Tuesday 7th May, when both the UK and Japanese markets will be re-opened.

Scottish Widows Life and Pension funds: Any regular payments will continue to be processed during the period, with the exception of the UK Bank Monday on 6th May (instructions will be processed on Tuesday 7th May in this case).

For funds where Lloyds Banking Group (LBG) own the mandate (so set the fund’s core strategy and investment criteria), our ‘BAU’ fund pricing processes allow for a ‘Proxy’ to be used if there are instances where a Fund price is unavailable or delayed. This allows us to deliver our fund prices into our Policy Admin Systems, when the Proxy is used to reflect the market movements in the fund.

The Proxy is a ‘benchmark’ which is closely aligned to the fund, such as the TOPIX index for a Japanese equity fund. Because the Japanese markets are closed, some of the indices are also not going to be valued over the period. As a result, an alternative index has been identified for use over the period, following discussions internally and with our key fund administration partner State Street. State Street have confirmed that the valuations will be available over the period. The Proxy to be used is an MSCI Japan index.

We are also implementing some additional controls because this is an unusual situation. Because LBG customers will be exposed to the market over the period, we are undertaking additional monitoring around the movements of the funds where the Proxy is being used.

For SW funds which are wholly managed by a specific fund manager, (so LBG simply link to that fund without having any role in its strategy or mandate design), we can confirm that all our investment partners will continue to trade in the funds and price on a daily basis. They are using similar ‘Fair Value Trading’ processes to do so.

For Retirement Account customers who invest in the Fund Supermarket, there are 52 funds on the platform held by Scottish Widows which are impacted. Our third party Fidelity is looking to minimise the impact of these suspensions for customers and will continue to accept transactions. However it is important to note that these will not be processed during the market closure.

Fidelity will continue to accept our trading requests, and all trading transaction types (Switches, Sells and Buys) will be open to customers in the affected funds. However, these requests will sit in a queue until the next open dealing point after the fund-suspension ends. This could be over a week after the trade is submitted depending on how long the fund is in suspension.

For Retirement Account customers who invest in Discretionary Fund Managers (DFMs):

  • Brewin Dolphin, Tilney, Charles Stanley, Investec, Rathbones and Quilter have confirmed there are no securities held in Scottish Widows accounts that are listed on the Tokyo Stock Exchange, therefore there is no impact. 
  • Brooks Macdonald are invested in some funds that will be suspended throughout the Japanese holiday. There will be no transactions for these funds during the holiday, and if any clients wish to withdraw their investments in full they will be delayed as a result.
  • Cazenove have a very small number of Scottish Widows portfolios invested in the JPM Japan Fund. Any dealing instructions received for the JPM Japan Fund over the holiday period will be processed at 12 noon on Tuesday 7th May 2019.

All transactions can recommence as normal on Tuesday 7th May.

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