US investors are currently barred from clearing yen swaps at Japan Securities Clearing Corporation, shutting them out of a market that can be cheaper and more liquid for certain positions. 👉 Subscribe to our weekly LinkedIn newsletter, the "Japan FinTech Observer", here: https://lnkd.in/gNjUuSxG
Director, Global Policy and Regulation / OTC Derivative Clearing Services,Japan Securities Clearing Corporation
It is commendable that U.S. Senators John Boozman and Bill Hagerty are addressing the issue of U.S. customer access to foreign swap markets and clearing. The benefits of central clearing for OTC swaps have been recognized both in the U.S. and globally, particularly following the Global Financial Crisis. Central clearing has effectively contained systemic risks during various market stresses, including COVID-19, the Russian invasion of Ukraine, high inflation, and rising interest rates worldwide. According to our observations, "U.S. Person" as defined under the 2013 CFTC guidance has been disadvantaged, as they cannot hedge risks by trading and clearing in the most liquid yen derivative markets, while European and Asian investors have enjoyed unrestricted access to this liquidity. This issue has also been highlighted by industry bodies such as the Committee on Capital Markets Regulation and in joint letters from AIMA, MFA, and SIFMA. #clearing #CCP #derivatives #jscc #swap #liquidityrisk #riskmanagement https://lnkd.in/gfb32JAF
