CFTC No-Action Relief for Japan Securities Clearing Corporation Regarding Section 5b(a) and Section 2(h)(1)(A) of the Commodity Exchange Act

The CFTC Division of Clearing and Risk grants no-action relief to the Japan Securities Clearing Corporation (JSCC) and its qualified clearing participants, allowing them to clear specific yen-denominated interest rate swaps referencing LIBOR or TIBOR and credit default swaps based on an iTraxx Japan index without JSCC being registered as a derivatives clearing organization. This relief permits clearing through JSCC, which is not registered with the CFTC, provided that no swaps are cleared on behalf of U.S. customers. The exemption remains effective until the earlier of December 31, 2013, or the date JSCC registers as a DCO for its interest rate swap clearing business.

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U.S. COMMODITY FUTURES TRADING COMMISSION
Three Lafayette Centre
1155 21st Street, NW, Washington, DC 20581
Telephone: (202) 418-5000
Facsimile: (202) 418-5521 www.cftc.gov
Division of Clearing and
Risk
CFTC Letter No. 12-56
No-Action
Division of Clearing and Risk
President and CEO
Japan Securities Clearing Corporation
2-1 Nihombashi-Kabuto-cho
Chuo-Ku
Tokyo 103-0026, Japan
Re: No-Action Relief with Regard to Section 5b(a) of the Commodity Exchange Act and Section 2(h)(1)(A) of the Commodity Exchange Act and Implementing Regulations Thereunder Dear Mr. Tobiyama:
This is in response to your letter dated December 11, 2012 (“Letter”), to the Division of Clearing and Risk (“Division”) of the Commodity Futures Trading Commission (“Commission”). In the Letter you request that the Division confirm that it will not recommend that the Commission take enforcement action against (1) Japan Securities Clearing Corporation (“JSCC”) for failing to register as a derivatives clearing organization (“DCO”) under section 5b(a) of the Commodity Exchange Act (“CEA”), and (2) JSCC qualified clearing participants, and a parent or affiliate of a JSCC qualified clearing participant, for failing to clear yendenominated interest rate swaps subject to required clearing, under section 2(h)(1)(A) of the CEA 2 and Commission regulations 3 thereunder, through a registered DCO. Under this proposed relief, JSCC would be permitted to clear certain credit default swap (“CDS”) transactions based on an iTraxx Japan index and certain yen-denominated interest rate swaps referencing either the London Interbank Offered Rate (“LIBOR”) or the Tokyo Interbank Offered Rate (“TIBOR”). In addition, under the proposed relief, JSCC’s qualified clearing participants, and a parent or affiliate of a JSCC qualified clearing participant, would be permitted to clear interest rate swaps required to be cleared under section 2(h)(1)(A) and Commission

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Timeline

Amended 1 time · last 2013-12-19

2013-12-19CFTCCFTC Staff Letter 13-73: Extension of No-Action Relief to Japan Securities Clearing Corporation and Qualifying Participantsamends

Source: Commodity Futures Trading Commission — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works