MEMORANDUM OF COOPERATION 

SUPERVISION OF CROSS-BORDER COVERED ENTITIES 

March 10,2014 
MEMORANDUM OF COOPERATION 

RELATE D TO THE SUPERVISION OF CROSS-BORDER COVERED ENTITIES 

In view of tlie growing globalization of the world's financial markets and the increase in 

cross-border operations and activities of regulated entities, the United States Commodity Futures 

Trading Commission and the Financial Services Agency of Japan (jointly, the "Authorities") have 

reached this Memorandum of Cooperation ("MOC") regarding cooperation and the exchange of 

information in the supervision and oversight of regulated entities that operate on a cross-border 

basis in both the United States and Japan. The Authorities express, through this MOC, their 

willingness to cooperate with each other in the interest of fulfilling their respective regulatory 

mandates regarding derivatives markets, paiticularly in the areas of protecting investors and 

customers; fostering the integrity of and maintaining confidence in financial markets; and reducing 

systemic risk. 

ITE M ONE: DEFINITIONS 

For puiposes of this MOC: 

1. "Authority" means: 

a. In the United States, the Conmiodity Futures Trading Commission ("CFTC"); or 

b. In Japan, the Financial Sei-vices Agency ("FSA"). 

2. "Requesting Authority" means the Authority making a request under this MOC. 

3. "Requested Authority" means the Authority to whom a request is made under this MOC. 

4. "Laws and Regulations" means the Commodity Exchange Act, Dodd-Frank Wall Street 

Refomi and Consumer Protection Act, CFTC regulations, and other relevant 

requirements in the United States, and the Financial Instruments and Exchange Act, its 

relevant regulations (wlrich usually are Cabinet Office Orders or Cabinet Office 

Ordinances), and other FSA regulatory requhements in Japan. 

5. "Person" means a natural person, unincorporated association, partnership, trust, 

investment company, or coiporation, and may be a Covered Entity or Cross-Border 

Covered Entity. 

6. "Covered Entit}'" means a Person that is, or that has applied to be, authorized, 

designated, recognized, qualified, licensed, registered, supervised, or overseen by one or 

more of the Authorities pursuant to Laws and Regulations, which may include regulated 

markets and organized tradmg platforms, central counterparties, trade repositories, and 

intennediaiies, dealers, or other market participants. 

7. "Cross-Border Covered Entity" means: 
a. A Covered Entity of botli the CFTC and the FSA: 

b. A Covered Entity in one jurisdiction that has been exempted from authorization, 

designation, recognhion, qualification, hcensure, or registration by an Authority in 

the other jurisdiction; 

c. A Covered Entity in one jurisdiction that controls or is controlled by a Covered 

Entity located in the other jurisdiction; or 

d. A Covered Entity in one jurisdiction that is physically located in the other 

jurisdiction. 

For purposes of this MOC, references to jurisdiction will be determined as either the 

jurisdiction of the CFTC or the jurisdiction of the FSA. 

8. "Books and Records" means docimients, electronic media, and books and records within 

the possession, custody, and control of, and other infoimation about, a Cross-Border 

Covered Entity. 

9. "On-Site Visit" means any regulatory visit by an Authority as described in Item Five to 

the premises of a Cross-Border Covered Entity physically located in the jurisdiction of 

the other Authority, including the review of Books and Records. 

10. "Visiting Authority" means the Authority conducting an On-Site Visit. 

11. "Local Authority" means the Authority in whose jurisdiction a Cross-Border Covered 

Entity that is the subject of an On-She Visit is physically located. 

12. "Emergency Situation" means the occim'ence of an event that could materially impair the 

financial or operational condition of a Cross-Border Covered Entity. 

13. "GoveiTunental Entity" means: 

a. If the Requesting Authority is the CFTC, the U.S. Depailment of the Treasury or the 

U.S. Board of Governors of the Federal Reserve System; and 

b. If the Requ esting Authority is the FSA, the Japanese Ministry of Finance or the 

Banlc of Japan. 

ITE M TWO: GENERA L MATTERS 

14. This MOC is a statement of intent to consult, cooperate, and exchange information in 

comrection with the supervision and oversight of Cross-Border Covered Entities. The 

cooperation and information sharing an-angements under this MOC should be 

inteipreted and implemented in a manner that is permitted by, and consistent with, the 

laws and requirements that govern each Authority. No domestic secrecy or blocking 

laws or regulations should prevent an Authority from providing assistance to the other 

Authority. The Authorities anticipate that cooperation primarily will be achieved 

tlu'ough ongoing infomial consultations, supplemented as needed by more foitnal 

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cooperation, including through mutual assistance in obtaining information related to 

Cross-Border Covered Entities. The contents of this MOC are intended to support both 

informal consultations and foiiual cooperation, as well as to facilitate the written 

exchange of non-public information in line with applicable laws. 

15. This MOC does not create any legally binding obligations, confer any rights, or 

supersede domestic laws. This MOC does not confer upon any Person the right or 

ability directly or indirectly to obtain, suppress, or exclude any information or to 

challenge the execution of a request for assistance under this MOC. 

16. This MOC is not intended to limit or condition the discretion of an Authority in any way 

in the discharge of its regulatory responsibilities or to prejudice the individual 

responsibilities or autonomy of any Authority. This MOC does not liinit an Authority 

to taking solely those measures described herein in fulfillment of its supervisory 

hinctions, or preclude Authorities from sharing information or documents with respect 

to Persons that are not Cross-Border Covered Entities but may be subject to regulatory 

requirements in the United States and in Japan. In particular, this MOC does not affect 

any right of any Authority to communicate with, conduct an On-Site Visit of (under the 

procedures described in Item Five), or obtain information or documents from any Person 

subject to its jurisdiction that is located in the territory of another Authority. 

17. This MOC is intended to complement, but does not alter, the following existing 

aiTangements: 

a. The Statement of Intent between the Securities and Exchange Commission and 

Commodity Futures Trading Commission and the Financial Services Agency of 

Japan Concerning Cooperation, Consultation and the Exchange of Information • 

(May 17, 2002) ("SOI"), as amended (January 16, 2006). 

b. The IOSCO Multilateral Memorandum of Understanding Concerning Consultation 

and Cooperation and the Exchange of Information (revised May 2012) ("IOSCO 

MMOU") to which the CFTC and the FSA are signatories, which covers primarily 

infomiation sharing in the context of enforcement matters. 

18. To facilitate cooperation under tliis MOC, the Authorities hereby designate contact 

persons as stated in Appendix A, which may be modified from time to time by an 

Authority transmitting revised contact information in wilting to the other Authority, 

ITE M THREE: SCOPE OF SUPERVISORY CONSULTATION, 

COOPERATION, AND EXCHANGE OF INFORMATION 

General 

19. The Authorities recognize the importance of close communication concerning 

Cross-Border Covered Entities and intend to consuh regularly, as appropriate, 

regarding: 

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a. General supervisory issues, including regulatory, oversight, or other related 

developments; 

b. Issues relevant to the operations, activities, and regulation of Cross-Border Covered 

Entities; and 

c. Any other areas of mutual supervisory interest. 

20. The Authorities recognize in particular the importance of close cooperation in the event 

a Cross-Border Covered Enthy, particularly one whose failure likely would be 

systemically important to an Authority, experiences, or is threatened by, a potential 

financial crisis or other Emergency Situation or will be subject to enforcement actions or 

sanctions or significant regulatory actions. 

21. Cooperation will be most usefiil in, but is not limited to, the following circumstances 

where issues of common regulatory concem may arise: 

a. The initial application with the CFTC or tlie FSA for authorization, designation, 

recognition, qualification, licensure, or registration, or exemption therefrom, by a 

Covered Entity that is authorized, designated, recognized, qualified, licensed, or 

registered by the Authority in the other jurisdiction; 

b. The ongoing supervision and oversight of a Cross-Border Covered Entity, including 

compliance with statutory and regulatory requirements in either jurisdiction or with 

international standards; 

c. Regulatory or supervisory actions or approvals taken in relation to a Cross-Border 

Covered Entity by the CFTC or the FSA that may impact the operations of the entity 

in the j urisdiction of the other Authority; and 

d. The provision and maintenance of direct access to infoiTnation and data stored in 

Covered Entities that ai"e trade repositories. 

Event-Triggered Notification 

22. As appropriate in the particular circumstances, each Authority will endeavor to inform 

tire other Authority promptly, and where practicable in advance, of: 

a. Pending regulatory changes that may have a significant impact on the operations, 

activities, or reputation of a Cross-Border Covered Entity, including those that may 

affect the rules or procedures of a Cross-Border Covered Entity; 

b. Any material event of which the Authority is awai-e that could adversely impact the 

financial or operational stability of a Cross-Border Covered Entity. Such events 

include any Icnown adverse material change in the ownership, operating 

environment, operations, financial resources, management, or systems and conti'ols 

of a Cross-Border Covered Entity, and the failure of a Cross-Border Covered Entity 

to satisfy any of its requirements for continued autliorization, designation, 

recognition, qualification, licensure, or registration, or exemption therefrom, where 

that failure could have a material adverse effect in the jurisdiction of the other 

Authority. For a Cross-Border Covered Entity that is a central counterparty, such 

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events also include a default or potential default of a clearing member fu-m or 

participant and market or settlement banl<; difficulties that might adversely affect the 

central counterparty; 

c. The status of efforts to address such material financial or operating difficulties 

experienced by a Cross-Border Covered Entity as described in Subparagraph b; and 

d. Enforcement actions or sanctions or significant regulatory actions, including the 

revocation, suspension, or modification of relevant authorization, designation, 

recognition, qualification, licensure, or registration, or exemption therefi'om, 

concerning a Cross-Border Covered Entity. 

23. The determination of what constitutes a "significant impact", "material event", 

"adversely impact", "adverse material change", "material adverse effect", "market or 

settlement bank difficulties", "adversely affect", "material financial or operating 

difficulties", or "significant regulatory actions" for pui-poses of Paragraph 22 should be 

left to the reasonable discretion of the relevant Authority that deteraiines to notify the 

other Authority. 

Request-Based Information Sharing 

24. To the extent appropriate to supplement informal consultations, upon witten request, 

the Requested Authority intends to provide the Requesting Authority the fullest possible 

cooperation subject to the terms in this MOC in assisting the Requesting Authority's 

supervision and oversight of Cross-Border Covered Entities, including assistance in 

obtaining and inteipreting infoixnation that is relevant to ensuring compliance with the 

Laws and Regulations of the Requesting Authority and that is not otherwise available to 

the Requesting Authority. Such requests should be made pursuant to Item Four of this 

MOC, and the Authorities anticipate that such requests will be made in a manner that is 

consistent with the goal of minimizing administrative burdens. 

25. The infonnation covered by Paragi'aph 24 includes: 

a. Information relevant to the financial and operational condition of a Cross-Border 

Covered Entity, including, for example, financial resources, risk management, and 

internal control procedures; 

b. Relevant regulatory information and filings that a Cross-Border Covered Entity is 

required to submit to an Authority including, for example, interim and annual 

financial statements and early warning notices; and 

c. Regulatory reports prepared by an Authority, including, for example, examination 

reports, findings, or information contained in such reports regarding Cross-Border 

Covered Entities. 

Periodic Meetings 

26. Representatives of the Authorhies intend to meet periodically, as appropriate, to update 

each other on their respective fiinctions and regulatoiy oversight programs and to 

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discuss issues of common interest relating to the supemsion of Cross-Border Covered 

Entities, inchiding: contingency plaiming and crisis management, systemic rislc 

concerns, default procedures, the adequacy of existing cooperative au'angements, and 

the possible improvement of cooperation and coordination among Authorities. Such 

meetings may be conducted by conference call or on a face-to-face basis, as appropriate. 

ITE M FOUR: EXECUTION OF REQUESTS FOR INFORMATION 

27. To the extent possible, a request for information pursuant to Item Thiee should be made 

in writing (which may be transmitted electronically), and addressed to the relevant 

contact person identified in Appendix A. A request generally should speciiy the 

following: 

a. The infoimation sought by the Requesting Authority; 

b. A general description of the matter that is the subject of the request; 

c. The puipose for which the information is sought; and 

d. The desired time period for reply and, where appropriate, the urgency thereof 

Infonnation responsive to the request, as well as any subsequent communication among 

Authorities, may be transmitted electronically. Any electronic transmission should use 

means that are appropriately secure in light of the confidentiality of the information 

being transmitted. 

28. In an Emergency Situation, the Authorities will endeavor to notify each other as soon as 

possible of the Emergency Situation and communicate information as appropriate in the 

pai-ticular circumstances, taking into account all relevant factors, including the status of 

efforts to address the Emergency Situation. During an Emergency Situation, requests 

for information may be made in any form, including orally, provided such 

communication is confinned in writing as promptly as possible following such 

notification. 

ITE M FIVE: ON-SITE VISITS 

29. In fulfilling its supeivision and oversight responsibilities pursuant to, and to ensure 

compliance whh, its Laws and Regulations, an Authority may need to conduct On-Site 

Visits to a Cross-Border Covered Entity physically located in the jurisdiction of the 

other Authority. Each Authority will consult and work collaboratively with the other 

Authority in conducting an On-Site Visit. 

30. An On-Site Visit by an Authority will be conducted in line with the following 

procedure: 

a. The Visiting Authority will provide advance notice to the Local Authority of its 

intent to conduct an On-Site Visit and the intended timefiame for, and the purpose 

and scope of, the On-Site Visit. Other than in exceptional circumstances, the 

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Visiting Authority will notify the Local Authority prior to notifying the 

Cross-Border Covered Entity. 

b. A Cross-Border Covered Entity that is authorized, designated, recognized, qualified, 

licensed, or registered, or exempt therefrom, has consented to On-Site Visits by a 

Visiting Authority. 

c. The Local Authority will endeavor to share any relevant reports, or information 

contained therein, related to examinations it may have undertaken of the 

Cross-Border Covered Entity. 

d. The Authorities intend to assist each other regarding On-Site Visits, including 

providing information that is available prior to the On-Site Visit; cooperating and 

consulting in reviewing, inteipreting, and analyzing the contents of public and 

non-public Books and Records; and obtaining information from directors and senior 

management of a Cross-Border Covered Entity. 

e. The Authorities will consult with each other, and the Local Authority may in its 

discretion accompany or assist the Visiting Authority during the On-Site Visit, or the 

Authorities may conduct joint visits where appropriate. 

f. The Authorities will communicate with each other, including meetings as 

appropriate during the On-Site Visit. After concluding an On-Site Visit, the 

Visiting Authoiity will communicate any major issues to the Local Authority that 

may impact negatively the authorization, designation, recognition, qualification, 

license, registration, or exemption of the Cross-Border Covered Entity. 

ITE M SIX: PERMISSIBLE USES OF INFORMATION 

31. The Requesting Authority may use non-public infomiation obtained under this MOC 

solely for the supervision and oversight of Cross-Border Covered Entities pursuant to, 

and to ensure compliance with, the Laws and Regulations of the Requesting Authority. 

32. While the Authorities recognize that this MOC is not intended to gather infonnation for 

enforcement purposes, they also imderstand that the Requesting Authority subsequently 

may want to use the non-public information provided by the Requested Authonty 

pursuant to this MOC for enforcement purposes, and the importance and desirability of 

cooperation by the Authorities in this regard. In such cases, the Requesting Authority 

will submit to the Requested Authority a request for consent to use the infonnation for 

enforcement purposes that will include: 

a. A general description of the enforcement matter and the purpose for which consent 

is sought; 

b. A general description of the non-public information for which consent is sought; and 

c. The laws and regulations of the Requesting Authority that may have been violated. 

The Requested Authority will provide a substantive response to all requests for consent 

in a timely fashion. A request for consent for use for enforcement puiposes may be 

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denied by the Requested Authority for the reasons stated in Paragraph 9(d) of the SOI or 

Paragraph 6(e) of the IOSCO MMOU. Use for enforcement purposes and confidential 

treatment by the Requesting Authority of non-public information provided by the 

Requested Authority will be in line with the terms and conditions in Paragraphs 13 and 

14 of the SOI {as well as the associated Note Verbale dated May 17, 2002) and 

Paragraphs 10 and 11 of the IOSCO MMOU. 

33. Before using non-public information furnished under this MOC for any purpose other 

than those stated in Paragraphs 31 and 32, the Requesting Authority must first consuh 

with and obtain the consent of the Requested Authority for the intended use. If consent 

is denied by the Requested Authority, the Authorities will consult to discuss the reasons 

for witWiolding approval of such use and the circumstances, if any, under which the 

intended use by the Requesting Authority might be allowed. 

34. The resti'ictions in this Item do not apply to an Authority's use of information it obtains 

dhectly from a Cross-Border Covered Entity, whether during an On-Site Visit, through 

direct access provided by a Cross-Border Covered Entity that is a trade reposhory, or 

otherwise. However, where non-public information is provided to the Requesting 

Authority pursuant to this MOC, the restrictions in this MOC apply to the use of the 

information by that Requesting Authority. 

ITE M SEVEN: CONFIDENTIALITY OF INFORMATION AND ONWARD SHARING 

35. Except as provided in Paragraphs 36 and 37, each Authority will keep confidential, to 

the extent permitted by law, non-public information shared under this MOC, requests 

made under this MOC, the contents of such requests, and any other matters arising 

under this MOC. 

36. As required by law, it may become necessary for a Requesting Authoiity to share 

non-public information obtained under this MOC with a Govermnental Entity in its 

jurisdiction. In these circumstances and to the extent permitted by law: 

a. The Requesting Authority intends to notify the Requested Authority; and 

b. Prior to the Requesting Authority sharing the non-public information, the 

Requesting Authority will provide adequate assurances to the Requested Authority 

concerning the Governmental Entity's use and confidential treatment of the 

information, including, as necessary, assm'ances that: 

i. The Govermnental Entity has confirmed that it requires the information for a 

puipose within the scope of its jurisdiction and as required by law; and 

i i. The infomiation will not be shared by the Governmental Entity with other 

parties without getting the prior written consent of the Requested Authority. 

37. Except as provided in Paragraph 36, the Requesting Authority must obtain the prior 

wiitten consent of the Requested Authoiity before sharing non-public information 

received under this MOC with any non-signatory to this MOC. The Requested 

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Authority will take into account the level of urgency of the request and respond in a 

timely manner. During an Emergency Situation, consent maybe obtained in any form, 

including orally, provided such communication is confirmed in writing as promptly as 

possible following such notification. If consent is denied by the Requested Authority, 

the Requesting and Requested Authorities will consult to discuss the reasons for 

withholding approval of such disclosure and the circumstances, if any, under which the 

intended disclosure by the Requesting Authority might be allowed. 

38. To the extent possible, the Requesting Authority intends to notify the Requested 

Authority of any legally enforceable demand for non-public information furnished under 

this MOC prior to complying with such demand. Prior to complying with the demand, 

the Requesting Authority intends to assert all appropriate legal exemptions or privileges 

with respect to such information as may be available. 

39. The Authorities intend that the sharing or disclosure of non-public information, 

including deliberative and consultative materials, such as written analysis, opinions, or 

recommendations relating to non-public infomiafion that is prepai-ed by or on behalf of 

an Authority, pursuant to the terms of this MOC, will not constitute a waiver of 

privilege or confidentiality of such information, 

ITE M EIGHT: IMPLEMENTATION AND MODIFICATIONS 

40. The Authorhies intend periodically to review the fimctioning and effectiveness of the 

cooperation anangements between the CFTC and the FSA whh a view, inter alia, to 

expanding or altering the scope or operation of this MOC should that be judged 

necessary. The Authorities may decide on such practical measures as may be 

necessary to facilitate the implementation of this MOC. In case of a material 

difference with respect to the interpretation of this MOC, the Authorities will consult 

with each other with a view to reaching a mutually acceptable interpretation. This 

MOC may be modified with the witten consent of the Authorities refeired to in 

Paragraph 1. 

ITE M NINE: EXECUTION OF MOC 

41. Cooperation under this MOC will commence on the date this MOC is signed by the 

Authorities. 

ITE M TEN: TERMINATION 

42. Cooperation under this MOC will continue until the expiration of 30 days after either 

Authority gives written notice to the other Authority of its intention to teiminate the 

MOC. If either Authority gives such notice, the parties will consult concerning the 

disposition of any pending requests. If a commitment cannot be reached thi'ough 

consuhation, cooperation will continue with respect to all requests for assistance that 

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were made under the MOC before the expiration of the 30-day period until all requests 

are fulfilled or the Requesting Authority withdraws such request(s) for assistance. In 

the event of the termination of this MOC, information obtained under this MOC will 

continue to be treated in the maimer stated in Items Six and Seven. 

This MOC is executed in duplicate, this /QfXday of Ma.rchj 2014. 

Mark Wetjen / 

Acting Chairijhan 

Ryutaro Hatanaka 

Commissioner 

U.S. Commodity Futures Trading Commission Financial Services Agency of Japan 

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APPENDIX A 

CONTACT PERSONS 

In addition to the following contact information, the CFTC and the FSA will exchange confidential 

emergency contact telephone information. 

CFT C 

Ananda Radhakrislman 

Director, Division of Clearing and Risk 

Commodity Futures Trading Commission 

1155 21^' Street, N.W. 

Washington, DC 20581 

Phone: 202-418-5188 

Fax: 202-418-5547 

Email: aradhakiislman@cftc.gov 

Gary Bamett 

Director, Division of Swap Dealer and Intermediary Oversight 

Commodity Futures Trading Commission 

1155 21" Street, N.W. 

Washington, DC 20581 

Phone: 202-418-5977 

Fax: 202-418-5407 

Email: gbamett@cftc.gov 

Vince McGonagle 

Director, Division of Market Oversight 

Commodity Futures Trading Commission 

1155 21" Sti-eet,N.W. 

Washington, DC 20581 

Phone: 202-418-5387 

Fax: 202-418-5507 

Email: vmcgonagle@cftc.gov 

FSA 

Yasuto Watanabe 

Director for International Financial Markets 

Office of International Affairs 

Financial Services Agency of Japan 

3-2-1 Kasumigaseki, Chiyoda-ku 

Tokyo, 100-8967 

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Phone:+81 3 3506 6206 

Fax:+81 3 3506 6113 

Email: yasuto.watanabe@fsa.go.jp 

Alternate Contact: 

Yoko Mitsuhashi 

Deputy Director 

Office of International Affairs 

Financial Services Agency of Japan 

3-2-1 Kasumigaseki, Chiyoda-ku 

Tokyo, 100-8967 

Phone: +81 3 3506 6626 

Fax:+81 3 3506 6113 

Email: yoko.mitsuhaslii@fsa.go.jp