EC Adopts Equivalence Decision for Derivatives Transactions in Japan

By Regulatory News

May 02, 2019

EC published the Implementing Decision (EU) 2019/684 on the recognition of the legal, supervisory, and enforcement arrangements of Japan for derivatives transactions supervised by the JFSA as equivalent to the valuation, dispute resolution, and margin requirements under Article 11 of the European Market Infrastructure Regulation, or EMIR (EU No 648/2012). The Decision (EU) 2019/684 shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

Ahead of the 26^th EU-Japan Summit, which will take place in Brussels, EC has determined certain rules of Japan to be equivalent to the EMIR in terms of the legal, supervisory, and enforcement arrangements for non-centrally cleared over-the-counter (OTC) derivatives transactions. The decision concludes that JFSA rules on valuation and dispute resolution for OTC derivative contracts not cleared by a central counterparty are equivalent to EMIR. It also determines that JFSA rules on obligations on the exchange of collateral between counterparties are equivalent to EU rules. This EC decision will alleviate the regulatory burden for EU and Japanese companies. It will allow market participants to comply with only one set of rules and to avoid duplicative or conflicting rules.

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Keywords: Europe, Asia Pacific, EU, Japan, Banking, Securities, Equivalence Decision, EMIR, JFSA, OTC Derivatives, EC

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