PLC - Japan's Financial Services Agency provides detailed rules on centralised cleara...

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Japan's Financial Services Agency provides detailed rules oncentralised clearance of OTC
Resource type: Legal update: archive
Status: Published on 22-Dec-2010
Jurisdiction: Japan

This article is part of the PLC Global Finance December 2010 e-mail update for Japan.
Atsumi & Sakai

SpeedreadOn 22 October 2010, Japan's Financial Services Agency (the JFSA) published draft amendments
to regulations made under the Financial Instruments and Exchange Act (FIEA).

On 22 October 2010, Japan's Financial Services Agency (the JFSA) published draft amendments
to regulations made under the Financial Instruments and Exchange Act (FIEA) which seek toimplement the aim of:Centralising the clearance of OTC derivatives.
Securities companies being supervised on a consolidated basis.
The amendments were open to public comment (those comments are now being reviewed by theJFSA) and will come into effect on 1 April 2011.
With regards to centralising the clearance of OTC derivatives, the amendments provide that:
A domestic clearance institution is required to maintain minimum capital of one billion yen.
A foreign clearance institution needs to have three years of experience in providing clearance
services in order to be authorised to provide clearance services, directly or in co-ordination
with a domestic clearance institution, for Japanese financial institutions.
As regards consolidated-basis supervision of securities companies, the amendments provide that asecurities company with total assets of one trillion yen shall be subject to consolidated-basis
supervision; and sets out details of the items required to be reported and the forms to be used forreporting purposes.
Other amendments include:
Widening the scope of Investment Management Business (a type of Financial Instruments
Business which requires the holding of a Financial Instruments Business license) to include
the acceptance of funds which are then invested in foreign investment trusts.
Prohibitions on the solicitation of individuals to enter into OTC derivatives unless requested.

http://uk.practicallaw.com/1-504-2867

2011/03/01

PLC - Japan's Financial Services Agency provides detailed rules on centralised cleara...

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Expanding the scope of derivatives (which are subject to regulation under FIEA) to include
derivatives where the underlying comprises real estate prices or indices based thereon
provided by administrative bodies or municipal governments.

Resource information
Resource ID: 1-504-2867
Published: 22-Dec-2010
Products: PLC Cross-border, PLC Global Finance, PLC US Law Department

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http://uk.practicallaw.com/1-504-2867

2011/03/01