OTC Japanese Government BondsClearing Fund Sponsored Scheme
The Clearing Fund Sponsored Scheme launched for JGB OTC Transaction Clearing Business on June 23, 2025. The scheme enables use of clearing by market participants whose contribution of Clearing Fund and the like is challenging by having other Clearing Participant(s) contribute the said Clearing Fund.
Scheme Outlines
・Under the scheme, a Sponsoring Participant deposits Clearing Fund and the like related to a Sponsored Participant
・The scheme is applied to each Netting Account. Specifically, Netting Accounts related to MRF (Money Reserve Fund) are the target of the scheme.
Item | Definition | Related party |
---|---|---|
Sponsored Participant | Clearing Participant who has other Clearing Participant(s) contribute the Clearing Fund and the like | Clearing Participant which is a Trust Bank under which the MRF’s asset is held |
Sponsoring Participant | Clearing Participant who contributes Clearing Fund and the like for another Clearing Participant | Clearing Participant in an agreement with a Sponsored Participant on use of the scheme |
Sponsored Netting Account | Netting Account of a Sponsored Participant subject to the scheme | Netting Account of a Sponsored Participant for the MRF |
Illustration of use of the scheme
Example for calculation of Required Clearing Fund
Netting Account | Property |
---|---|
Netting Account A | Netting Account of a Sponsoring Participant |
Netting Account B | Netting Account of a Sponsored Participant for the MRF (Sponsored Netting Account) |
Netting Account C | Netting Account of a Sponsored Participant for others |
Netting Account D | Netting Account of a Clearing Participant who does not use the scheme |
1. Required Clearing Fund Amount for Netting Account A, Netting Account B, Netting Account C and Netting Account D becomes 60, 30, 40 and 70, respectively, as a result of calculation deeming the scheme has not been used for each Clearing Participant (i.e., for each Netting Account)
2. Required Clearing Fund Amount of 30 for Netting Account B, which is a Sponsored Netting Account, is deemed zero and 30 is added to Required Clearing Fund Amount for Netting Account A, which is a Netting Account of a Sponsoring Participant. As a result, the total Required Clearing Fund Amount for Netting Account A becomes 90 (=60+30). Required Clearing Fund Amount for Netting Account C, which is other Netting Account of the Sponsored Participant and that for Netting Account D, which is a Netting Account of a Clearing Participant who does not use the scheme are unchanged.
3. JSCC notifies Required Clearing Fund Amount of 90, 40, 70 for a Sponsoring Participant, for a Sponsored Participant and for a regular participant, respectively.
4. Each Clearing Participant deposits Required Clearing Fund Amount based on the notification.
Sponsoring Participant
Appointment of a Sponsoring Participant
・A Sponsored Participant may appoint single or multiple Sponsoring Participants against a Sponsored Netting Account (when appointing multiple Sponsoring Participants, specifying the ratio used in prorating Required JGB OTC Clearing Fund to each Sponsoring Participant is required).
・A Sponsored Participant may appoint a Back-up Sponsoring Participant in preparation for a situation where deposit of JGB OTC Transaction Clearing Fund by a Sponsoring Participant becomes impossible.
* In appointing a Sponsoring Participant, conclusion of an agreement among a Sponsoring Participant, a Sponsored Participant and MRF is expected.
Requirement for a Sponsoring Participant
A Sponsoring Participant is required to meet the following criteria.
- Financial Basis Criteria : Its net worth (jun zaisan) (its net assets (jun shisan) in the case of entities other than Financial Instruments Business Operators) is not less than 10 billion yen
- Business structure: It employs the adequate business structure to deposit Required JGB OTC Transaction Clearing Fund Amount for a Sponsored Participant.
Procedure to use the scheme
・A Sponsored Participant is required to submit the prescribed application form related to the Clearing Fund Sponsored Scheme to JSCC. A Sponsored Participant is also required to submit an application from each Sponsoring Participant to JSCC.
・Prior to the user application, a Sponsoring Participant is required to submit a document related to its business structure.
Fee
No fee is charged to users of this scheme.
Please refer to the below website link for the details of the scheme.