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About JSCCRegulatory Status

License granted by Regulatory Authority in Japan

In January 2003, JSCC was licensed to conduct the Financial Instruments Obligation Assumption Services(*) as the Financial Instruments Clearing Organization stipulated in Article 2, Paragraph 29 of the Financial Instruments and Exchange Act, and has been regulated and supervised directly by the Financial Services Agency in Japan.

(*)At that time, in 2003, Securities Obligation Assumption Services under the Securities and Exchange Act

Recognition, etc., obtained from Overseas Regulatory Authorities

Since the financial crisis in 2008, each country has been taking necessary steps for further progress of the central clearing of OTC derivatives. In order to provide clearing services to overseas financial institutions, JSCC has obtained recognitions, etc. from overseas regulatory authorities as follows:

【U.S.】Exempt DCO (subject to Interest Rate Swap Clearing Business)

  • With regard to an exemption from the requirement under the U.S. Commodity Exchange Act to register as a Derivatives Clearing Organization (DCO) in relation to Interest Rate Swap Clearing Business, in October 2015, JSCC has received an Order of Exemption from Registration from the U.S. Commodity Futures Trading Commission (CFTC) pursuant to Section 5b (h) of the Act.
  • With this order, by clearing through JSCC, its Clearing Participants and their Affiliates that are U.S. Persons have been able to fulfill the centralized clearing mandate under the U.S. Commodity Exchange Act in relation to all the Interest Rate Swaps subject to JSCC Clearing.
  • To go to the press release regarding the Order above, please click here.

【EU】The Third-Country CCP (subject to All of Clearing Businesses)

  • In April 2015, JSCC was recognized as a third-country CCP by the European Securities and Markets Authorities (ESMA) pursuant to Article 25 of the European Market Infrastructure Regulation (EMIR), which was adopted in July 2012.
  • With this recognition, by clearing through JSCC, European financial institutions have been able to fulfill their obligation to centrally clear OTC derivatives, which is required by EMIR.
    (*)For details of JSCC’s Clearing Participants (Category1) in association with the Clearing Obligation under EMIR, please click here.
  • As a third-country CCP, JSCC is also considered a Qualifying Central Counterparty (QCCP) in relation to European capital requirements. The requirements impose significantly higher capital charges on European financial institutions with exposures to non-QCCPs. However, with JSCC’s QCCP status, European clearing participants have been able to utilize JSCC’s clearing services without being subject to the stricter regime.
  • To go to the press release regarding Third-Country CCP, please click here.

【Australia】Designation as Prescribed CCP(subject to Interest Rate Swap Clearing Business)

  • JSCC has been designated by the Australian Authority as a Prescribed CCP in the “Corporations Amendment (Central Clearing and Single-Sided Reporting) Regulations 2015 (Select Legislative Instrument No. 157, 2015),” in relation to OTC derivatives regulations in Australia.
  • With this designation, by clearing through JSCC, Australian financial institutions have been able to fulfill the proposed Australian centralized clearing mandate for OTC derivatives.
  • To go to the press release regarding the Designation as Prescribed CCP, please click here.

【Hong Kong】ATS-CCP and Designated CCP(subject to Interest Rate Swap Clearing Service)

  • With regard to IRS Clearing Services, in August 2016, JSCC was authorized by the Securities and Futures Commission (SFC), pursuant to Securities and Futures Ordinance of Hong Kong, as an ATS-CCP, which is the qualification required for JSCC to provide OTC derivatives clearing services to Hong Kong corporations, and as a designated CCP, which makes JSCC available for trading parties to fulfill their mandatory central clearing requirements(Obtained NOTICE OF AUTHORIZATION TO PROVIDE AUTOMATED TRADING SERVICE and NOTICE OF DESIGNATION).
  • As a result of the ATS-CCP and designated CCP authorizations, granted to JSCC, Hong Kong financial institutions have been able to fulfill their clearing mandate for OTC derivatives trades in Hong Kong, by clearing through JSCC.
  • To go to the press release regarding ATS-CCP and designated CCP, please click here.