Solicitation for Comments on Draft Disclosure of Customer Protection with respect to JSCC's Interest Rate Swap Clearing Service

On July 23, 2019, the CFTC publicized a supplemental notice of proposed regulations ("SNPR") to permit a derivative clearing organization that is exempted from registration ("Exempt DCO") to clear swaps for U.S. customers under certain conditions. See a link to "SNPR" here　https://www.federalregister.gov/documents/2019/07/23/2019-15258/exemption-from-derivatives-clearing-organization-registration
　
(Note 1) JSCC is an Exempt DCO and has been conducting interest rate swap clearing services for its clearing participants and their affiliates that are U.S. Persons. However, JSCC and clearing participants are not permitted to clear swaps for U.S. customers. For more details, please see our previous press release. See a link to our previous press release here　https://www.jpx.co.jp/jscc/en/information/press_releases/20170516.html

As one of the conditions to clear swaps for U.S. customers, the SNPR includes a disclosure notification requirement to U.S. customers on the customer protection regime available in the jurisdiction of the Exempt DCO's home country, with respect to which the Proposal states "[t]he notice also must explicitly compare the protections available to the U.S. person under U.S. law and the laws of the Exempt DCO's home country regulatory regime."
(Note 2) 84 Fed. Reg. 35459 (Jul. 23, 2019)

Although the CFTC has not yet finalized the SNPR as of the date hereof, JSCC has prepared a draft comparison disclosure on its Interest Rate Swap Clearing Service (attached below), and hereby seeks comments on it (e.g. expected coverage and granularity) from the public, including but not limited to U.S. customers that are interested in accessing to JSCC Interest Rate Swap Clearing Service if the SNPR is finalized. Based on the comments received from respondents, JSCC would amend and update the document where appropriate.
Comment period is open until February 28, 2020.

-Contact-
Japan Securities Clearing Corporation
Clearing Planning Department
Tel: +81-50-3361-1332, +81-50-3361-0928
Mail: otc@jpx.co.jp