CFTC announced the issuance of an order exempting certain derivatives trading facilities (electronic trading platforms, or ETPs) regulated by JFSA from the requirement to register with CFTC as swap execution facilities (SEFs). JFSA also announced that it would facilitate the authorization process of "Authorized Electronic Over-the-Counter (OTC) Derivatives Transactions etc. Business Operators" (Foreign ETP Operators) for CFTC-authorized derivative platforms that seek to be Foreign ETP Operators on the premise that such entities are subject to the regulation and supervision of CFTC.
The Commodity Exchange Act (CEA) section 5h(g) empowers CFTC to grant an exemption from the SEF registration requirement when it determines that a facility is subject to comparable, comprehensive supervision and regulation on a consolidated basis by SEC, a prudential regulator, or the appropriate governmental authorities in the home country of the facility. ETPs that have been granted an exemption from SEF registration under section 5h(g), as listed in the order, may be used by swap counterparties to comply with the trade execution requirement under the CEA section 2(h)(8) and may also be used to trade swaps that are not subject to the trade execution requirement.
Article 60-14 of the Financial Instruments and Exchange Act (No. 25 of 1948) (FIEA) empowers JFSA to permit certain foreign derivatives platforms to qualify as Foreign ETP Operators. Under the Japanese regulatory framework, Foreign ETP Operators shall not be examined on the specific ways they operate as long as their business is operated at levels deemed virtually equal to those required in Japan, given that they are essentially under the supervision of overseas authorities. JFSA will facilitate the authorization process for CFTC-authorized derivatives platforms that seek to be Foreign ETP Operators on the premise that they are subject to the regulation and supervision of the CFTC.
Keywords: Americas, Asia Pacific, US, Japan, Banking, Securities, Swap Execution, Trading Venues, OTC Derivatives, JFSA, CFTC
Previous ArticleFSB Chair Randal Quarles Speaks About the Upcoming Work of FSB
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.
The Prudential Regulation Authority (PRA) issued the policy statement PS20/21, which contains final rules for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies.
The European Banking Authority (EBA) published the final report on the guidelines specifying the criteria to assess the exceptional cases when institutions exceed the large exposure limits and the time and measures needed for institutions to return to compliance.
The European Banking Authority (EBA) revised the guidelines on stress tests to be conducted by the national deposit guarantee schemes under the Deposit Guarantee Schemes Directive (DGSD).
The Hong Kong Monetary Authority (HKMA) issued a circular, for all authorized institutions, to confirm its support of an information note that sets out various options available in the loan market for replacing USD LIBOR with the Secured Overnight Financing Rate (SOFR).
The Office of the Comptroller of the Currency (OCC) issued a new "Problem Bank Supervision" booklet of the Comptroller's Handbook. The booklet covers information on timely identification and rehabilitation of problem banks and their advanced supervision, enforcement, and resolution when conditions warrant.
The Monetary Authority of Singapore (MAS) launched a consultation on the standards for market risk capital and the associated reporting requirements for banks incorporated in Singapore.
The tech lab of the Federal Deposit Insurance Corporation (FDIC) selected three winning teams in a tech sprint designed to explore new technologies and techniques to help banks meet the needs of unbanked consumers.
PRA published a "Dear CEO" letter that sets out findings of a review on the reliability of regulatory reporting and reiterates the supervisory expectations on regulatory reporting.
The Australian Prudential Regulation Authority (APRA) confirmed that its new data collection solution APRA Connect will go live on September 13, 2021.