TORF (Tokyo Term Risk Free Rate) License Guide

August 2024
QUICK Corp.
Ver. 3.1* TORF is a registered trademark of QUICK Benchmarks Inc..
* Company and product names on this material are trade names, trademarks and registered trademarks of their respective companies.
* Screen images, etc. on this material are for illustration only. Contents on this material may change in the future.

Contents
Purpose2

1. What is License

3

2. Why License Fee is Necessary

4

3. Data Usage and License Agreement5

4. User License (When License is Required)6

5. Type of User License Fees

7

6. Definition of Financial Institutions

8

7. Group Usage

9

8. Example of Fee Calculation

10

9. Procedures for License Application

11

Appendix: Usage and License (Examples)

12

Appendix: Frequently Asked Questions

16

TORF License Guide© 2024 QUICK Corp. All Rights Reserved.

1

Purpose
The “TORF (Tokyo Term Risk Free Rate) License Guide” explains the following matters:●

Overview of “User License” required for using TORF, fees and definitions●

Other fees and procedures required for license agreement

In Appendices, this material shows you cases in what major financial transactions the license isrequired. It also contains a “frequently asked questions” section about User License.

* In the text below, the “TORF (Tokyo Term Risk Free Rate)” is abbreviated as “TORF”

TORF License Guide© 2024 QUICK Corp. All Rights Reserved.

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1. What is License
If you use TORF in financial transactions, you will need to have User License.
TORF is one of the interest rate benchmarks that succeeds the JPY LIBOR. It is intended to be used in various financialtransactions as is the case with the LIBOR, such as for loans, bond issues and interest rate derivatives. It is User License that
confers you the right to use TORF for such purposes.
If you wish to use TORF for the purposes listed above, please conclude the “license agreement” with QUICK and pay thelicense fees. Then, QUICK provides the “license” to you. You may use TORF for businesses only after you obtain both the data
and license.
Example of General Financial Transactions (Loan)

Licensor

LicenseAgreement
Licensing

License Fee
Data
Distribution
Service
Agreement

Provision of TORF Data

User (Licensee)

Refer toTORF

Financial
Institution*1(Lender)

Loan Agreement

Customer*2(Borrower)

TORF User
LicenseUsage FeeTORF License Guide*1 A separate agreement with a vendor or QUICK is necessary for using the data.
*2 To evaluate assets, as is the case with financial institutions, it is necessary to have both Data Distribution Service Agreement and User License(for non-financial institutions).

© 2024 QUICK Corp. All Rights Reserved.

3

2. Why License Fee is Necessary
The license fee is used for stable provision of TORF, contributing to healthy growth and development offinancial and capital markets.
Under the license agreement, the data users (licensees) will pay the license fees to QUICK (licensor). QUICK asks users to pay
the fees for the following purposes:● QUICK believes that it is of utmost importance to enhance the reliability and robustness of TORF in order to be usedwidely. QUICK will strive to update data daily accurately and quickly, and at the same time to review the calculation
process periodically and strengthen and monitor the system.

● QUICK will also consistently make efforts to be highly compliant with rules and regulations, such as IOSCO's Principles
for Financial Benchmarks and EU Benchmark Regulations.

Users of TORF are cordially requested to bear these costs together in a fair and reasonable manner.

Development andCalculation of
Benchmarks

Licensor
Outsourcing

LicenseAgreement
Licensing(Sales, CRM, etc.)

QUICK Benchmarks Inc.

Seek to achieve stable distribution of TORF andimprovement of robustness, contributing to healthy
development of financial and capital markets.
TORF License Guide© 2024 QUICK Corp. All Rights Reserved.

User (Licensee)

Financial Institution,
etc.

License Fee
TORF User
License4

3. Data Usage and License Agreement
Users will need to have an agreement with a vendor for use of data and with QUICK for TORF license.

In order to obtain the TORF data, users will need to have Data Distribution Service Agreement with QUICK or one of the otherredistribution vendors and pay the fees*1. Users will need to have User License from QUICK even when they obtain the datafrom other vendors.
In case QUICK’s data distribution service is used:

In case data distribution service of other redistribution vendors is used:● Data Distribution Service Agreement with QUICK*2● License Agreement with QUICK● Data Distribution Service Agreement with Other Vendor*3● License Agreement with QUICK

LicenseAgreement

User (Licensee)
Licensor

Licensor
Licensing(Financial Institution,
etc.)

License Fee
Provision of TORF Data
Usage FeeTORF License Guide

User

TORF User
LicenseUser (Licensee)

LicensingUser(Financial
Institution, etc.)

License Fee

TORF User
License

Provision of TORF Data

Provision of TORF Data

Other Vendor
Data Distribution
Service Agreement

LicenseAgreement

Usage Fee
Data Distribution
Service Agreement*1 In case the user uses the real-time TORF data, an additional service usage fee is necessary along with Data Distribution Service Agreement and fees.
*2 Please contact QUICK sales representative for details. *3 Please contact respective vendors for details.

© 2024 QUICK Corp. All Rights Reserved.

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4. User License (When License is Required)
There are several types of licenses available for use of TORF. “User License” is one that is for mostcommon uses as interest rate benchmark.
License Type

Intended Use

Intended User (Ex.)

Use TORF for setting interest rates on loans and bonds/for
evaluating assets● Using TORF as the reference rate for financial products (including, but notlimited to, swaps, FRAs, derivatives, notes, bonds, mortgages and loans).
● Using TORF for asset valuation and setting various prices (including, but notlimited to, collateral calculations, setting interest rates, pricing curves, discountcurves and forward curves)

User License

Financial Institutions
and Non-Financial
Institutions(Ex.)
・In the case of loans, the lender (bank or other financial institution) needs the license.
・In the case of bond issues, the fund-raiser (i.e., issuer) needs the license.

Trading/ Clearing
LicenseListing products based on TORF/intermediating financial transactions/conducting clearing operations

Brokers andExchanges

Derived Benchmarks
LicenseGenerating interest rate benchmarks based on TORF

Benchmark Providers

Redistribution License

Distributing with the purpose of redistributing TORF data

Information Vendors
and System Vendors* A license agreement with QUICK is required even if the usage is not listed above, in case TORF is used for commercial purpose.
TORF License Guide© 2024 QUICK Corp. All Rights Reserved.

65. Type of User License Fees
The TORF user license fees vary according to the type of license.
License Fee (Monthly)

License Type

Financial
Institutions

Note

Effective from April 2025

Use by one company

JPY60,000

Group Usage

JPY240,000

User License

Non-financial
Institutions

Use by one company

JPY30,000

Group Usage

JPY120,000

Group Usage is limited toaffiliated companies with astake of more than 50%.
The License fee is thesame regardless of whether
the data used is real-timeor delayed.

* Above fees exclude any applicable taxes and/or statutory levies.

TORF License Guide* The amounts shown above are license fees for use of data as stipulated in Item 4 User License. The users will need to conclude
Data Distribution Service Agreement with QUICK or other vendors and pay fees.
* If the users use TORF real-time data in Data
<Additional Service Usage Fee (in case of QUICK)>
Distribution Service provided by QUICK or other
JPY1,000
vendors, additional service usage fees are also payable in TORF (real-time) Terminal Usage Fee
addition to Data Distribution Service Agreement
Internal Usage Fee
JPY10,000
and fees. Please contact QUICK or other vendors fordetails.
* Please also refer to the “TORF (Tokyo Term Risk Free Rate) User License Price List” on the following webpage.
TORF website: https://corporate.quick.co.jp/en/torf© 2024 QUICK Corp. All Rights Reserved.

76. Definition of Financial Institutions
Financial institutions, for the purpose of determining the user license fees, are defined as follows:

Definition of “Financial Institutions”
A corporation mainly engaged in financial services such as deposits, financing, loaning, lending, funds
transfer transactions, electronic payment collection services, agency and brokerage services for nonJapanese banks, sale and purchase of securities, etc. and brokerage thereof, underwriting of securities,
etc., custody of securities, etc., investment advisory, agency business, investment management business,securities lending business, insurance or reinsurance, trust business, moneylending business, leasebusiness, finance business, cryptoasset exchange business, mutual financing business, and otherfinancial services.
* QUICK determines the applicable fees based on the definition above.
* When the group user license is chosen (refer to Item 7), the fees for financial institutions will be applicable if one ormore financial institutions are included in the group.

TORF License Guide© 2024 QUICK Corp. All Rights Reserved.

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7. Group Usage
In concluding User License agreement, the user may choose the one company or group usage.
The group usage allows use by “affiliated companies,” in addition to the licensee company, based on thefollowing definitions:Definition of Affiliated Companies●●●

A company that the licensee owns over 50%
thereof directly or indirectly.

Illustration of
Affiliated Companies

A parent company that owns over 50% of thelicensee directly or indirectly, and a company
that the parent company owns over 50%
thereof directly or indirectly.
In judging the ratio of ownership, if thelicensee and its parent jointly owns a company
directly or indirectly, the ownership of theparent company will also be taken into
consideration.

ParentCompany

Over 50%

Over 50%

SubsidiaryA

SubsidiaryB* Assuming that Subsidiary A is thelicensee, the following companies are
considered as affiliated companies(taking the parent company into
consideration):・Parent Company
・Subsidiary B (Fellow Subsidiary)
・Sub-subsidiary A

Over 50%Sub-subsidiaryA* For group usage, please submit the list of affiliated companies.
* Special purpose companies (SPCs) are considered as affiliated companies even in the absence of capital relationship.
TORF License Guide© 2024 QUICK Corp. All Rights Reserved.

98. Example of Fee Calculation
The illustration below shows a sample fee calculation other than license fees in case of using
TORF real-time data. (In case of using the data distribution service of QUICK, as explained in
Item 3.)
In Case Data Distribution Service of QUICK is in Use<Use on Terminal>
In case the real-time data is obtained on QUICK terminal for use of
TORF for setting the interest rate on loans or for in-house systems:(1)
Licensor

LicenseAgreement

User (Licensee)

Licensing

User

License Fee(Financial Institution,
etc.)

Distribution of TORF Data
Usage Fee

Data Distribution
Service Agreement*

TORF License Guide

TORF User
License(2) (3)(1) License Fee(2) Information Service Usage Fee(3) Additional Service Usage Fee(TORF (real-time) Terminal Usage Fee & Internal Usage Fee)

<Use via API, etc.>
In case the data is obtained via QUICK service (API, file service, etc.) for
use of TORF for setting the interest rate on loans or for in-house systems:(1) License Fee(2) Information Service Usage Fee(3) Additional Service Use Fee( Internal Usage Fee)In case the data distribution service of other vendors (redistribution vendors) is to be used, please contact the respective vendors for detail.

* Please also refer to the “TORF (Tokyo Term Risk Free Rate) User License Price List” on the following webpage.
TORF website: https://corporate.quick.co.jp/en/torf© 2024 QUICK Corp. All Rights Reserved.

109. Procedures for License Application
Please review the materials (sample agreement, price list and sample application form) on TORF
website https://corporate.quick.co.jp/en/torf in advance and contact us using the inquiry form on
the site. QUICK sales representative will then contact you.
Flowchart from Inquiry to Use of License

TORF Website

Inquiry
Contact from QUICK Sales Representative(Check Agreement, Fees, etc.*1)
Application (User License Application Form (New)*2)

Please check materials on
the page before inquiry.

Conclusion of License Agreement
Using License*1 If you plan to use QUICK’s data distribution service, the sales representative will also tell you about the agreement for the service.
*2 If you are applying for the group usage, please also fill in information on the affiliated companies that plan to use the service.
TORF License Guide© 2024 QUICK Corp. All Rights Reserved.

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Appendix: Usage and License (Examples)

TORF License Guide© 2024 QUICK Corp. All Rights Reserved.

12

Loan Transactions●

The financial institution (lender) needs to have User License (receiver of interest determined with TORF)

Participant that needs to have User License (loan transactions)

Lender needs tohave license
agreement

User (Licensee)

Refer toTORF

Financial
Institution*1

Loan

Customer*2(Borrower)(Lender)

Repayment
TORF User
License*1 To use data, you need to have a separate agreement with QUICK or other vendors.
*2 For asset valuation, you will need, in addition to the data usage agreement, to have “User License (financial institutions)” or “User License(non-financial institutions).”

TORF License Guide© 2024 QUICK Corp. All Rights Reserved.

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Syndicate Loan●

All the syndicate loan members (lenders) need to have User License. (Receiver of interest determined with

TORF)
●

No User License is required for the arranger, which is engaged solely in administrative work
including negotiation for terms and conditions.

Participants that need to have User License (syndicate loan)
Invitation
Negotiation for Terms
and Conditions
Negotiation for Terms
and Conditions
Loan Administration

Customer*2

Financial
Institution

Provision ofInformation
Loan Administration(Arranger)(Borrower)

Syndicate

Financial
Institution

TORF User
LicenseFinancial
Institution

TORF User
LicenseFinancial
Institution

TORF User
License(Lender)(Lender)

Loan Agreement
Refer to
TORF

Each lenderneeds to havelicense agreement(Lender)

Lenders*1*1 To use data, you will need to have a separate agreement with QUICK or other vendors. If, as a lender, you just receive notice from the arranger
on terms and conditions negotiated with the customer (TORF) and receives interest, you still need to have License Agreement.
*2 For asset valuation, you will need, in addition to the data usage agreement, to have “User License (financial institutions)” or “User License (nonfinancial institutions).”

TORF License Guide© 2024 QUICK Corp. All Rights Reserved.

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Bond Issuance●●●

The issuer needs to have User License.
This is regardless of the issue form (public or private offering) or other parties involved.
QUICK does not necessarily require investors to have the license*1.

Participant that needs to have User License (bond transaction (corporate bond))
Issuer needs tohave a license
agreement

Issuer*2

Use TORF as
benchmarkinterest rate
Issue

Investor

Administrative
Agent

Public Offering
Secondary Distribution

Investor

TORF User
LicenseInvestor
Payment of Principal
Repayment of
Principal and Interest

Fiscal Agent

Payment of Principal
Repayment of
Principal and Interest*1 Please also refer to FAQ No. 5 on Page 17.
*2 To use data, you need to have a separate agreement with QUICK or other vendors.
TORF License Guide© 2024 QUICK Corp. All Rights Reserved.

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Appendix: Frequently Asked Questions

TORF License Guide© 2024 QUICK Corp. All Rights Reserved.

16

Questions and Answers
Q1

To use TORF in loans, who needs to have a license agreement?

A1

In loans, User License is required for the lender.
The borrower does not need to have one. (A license, however, is required for asset valuation.)Q2

To use TORF in group financing, who needs to have a license agreement?

A2

QUICK considers group financing as a form of financial transaction and, as is the case with loans, User License is required for the lender.
The borrower does not need to have one. (A license, however, is required for asset valuation.)Q3

To use TORF in syndicate loans, who needs to have a license agreement?

A3

In syndicate loans, User License is required for each of the syndicate members. Other parties, such as the borrower and arrangers, do notneed to have one. In case an arranger is simultaneously a syndicate member, however, a license is required for the arranger as a syndicate
member. (A license, however, is required if the borrower uses TORF for asset valuation.)Q4

To use TORF in bond issuance, who needs to have a license agreement?

A4

In bond issuance, User License is required for the issuer, regardless of the terms and conditions (public/private offering, issue market, etc.)
Other parties, including investors, underwriters and calculation agents, do not need to have one.
Investors do not need to have a license for purchasing the bond. If, however, investors hold the bond for trading and make a market
valuation using TORF, User License is required for the investors, as this is considered to fall within the category of “using TORF for asset
valuation.”

Q5

Is it necessary to have a license to hold bonds that refer to TORF?

A5

It is not necessary to have a license to just hold the bond. However, if TORF is used for asset valuation, a license is required for the investor.
In particular, if the bond is held for trading, there are cases where TORF is used for asset valuation. On the other hand, if the bond is held tomaturity and the bond is evaluated at cost, QUICK does not consider it as asset valuation using TORF.

TORF License Guide© 2024 QUICK Corp. All Rights Reserved.

Loan

Loan

Syndicate Loan

Bond

Bond

17

Questions and Answers
Q6

Does an SPC set up for asset liquidation also need to have a license agreement when issuing a bond referring to TORF?

A6User License is required for an SPC set up for asset liquidation. In this case, the SPC may be a licensee, or it may also be an affiliatedcompany of a licensee that has a group usage license. An SPC can be placed on the list of affiliated companies regardless of the ratio ofownership.

Q7

In using TORF in derivatives transactions, who needs to have a license agreement?

A7

For derivatives transactions between financial institutions or between non-financial institutions, a license is required for both parties. In themeantime, for transactions between a financial institution and a non-financial institution, a license is required for the financial institution for
the time being.

Bond

Derivatives

Q8 At the time of determination of terms and conditions of a financial transaction, we need to inform customers outside
Licensethe company of the TORF rate. Do we need to have a redistribution license?
A8 Informing an entity outside the company of the TORF rate is considered as part of the business of the licensee, and is thus within the scopeof User License. If, however, the licensee unnecessarily inform the same party repeatedly on a daily basis, for example, it is consideredoutside the scope of User License.
Q9

Please explain about Trading/ Clearing License.

A9

Trading/Clearing License is required for parties which intermediate transactions without having exposures or which are engaged in clearing
business on a regular basis. Payments of principal and interests between financial transaction parties (or via the central counterparty) areconsidered as part of execution of financial business and are considered within the scope of User License. There is no need to have
Trading/Clearing License for such purposes.

Q10

Please explain about Derived Benchmarks License.

LicenseLicenseA10 Derived Benchmark License is required for parties that generate and calculate new benchmarks from TORF on a regular basis. The financialtransaction parties, calculating principal and interests with a special formula, only need to have User License as such activities are
considered as part of execution of financial business. There is no need to have Derived Benchmark License.
TORF License Guide© 2024 QUICK Corp. All Rights Reserved.

18

Questions and Answers
Q11

To use TORF in synthetic loans, who needs to have a license agreement?

LicenseA11 Synthetic loan has the same exposure to synthetic bond. However, a User License is required for lenders. Because it is also recognized as a
loan.
Q12

To use TORF in hybrid loans or hybrid bonds, who needs to have a license agreement?

LicenseA12 QUICK considers hybrid loans the same as hybrid bonds based on the nature of the instruments and the purpose of the activity. Accordingly,
User License is required for the borrower of hybrid loans and the issuer of hybrid bonds.

TORF License Guide© 2024 QUICK Corp. All Rights Reserved.

19

Please contact QUICK sales representative for details of services andprocedures for agreement or application.
TORF Website:

https://corporate.quick.co.jp/en/torf

Inquiry:

https://corporate.quick.co.jp/contact_en-customer/© 2024 QUICK Corp. All Rights Reserved.

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