JSCC further strengthen STP (Straight Through Processing) in the clearing service for Japanese yen interest rate swaps, in support of client trading on SEF and MTF.

JSCC is pleased to announce that client trades executed on either Swap Execution Facility (SEF) or Multilateral Trading Facility (MTF), US and European trade execution platforms, may now be cleared without going through the “Take-up Process” in JSCC’s IRS Clearing Service*1.

On the back of uncertainties in the Japanese yen interest rate market and thus increased needs for hedging by swap counterparties, clearing volumes in JSCC’s IRS Clearing Service reached a year-to-date total of 1,181 trillion yen, as of August 2023. This exceeds the previous annual total, since the launch of IRS Clearing Service in 2012, as announced through JSCC’s Press Release dated September 1, 2023*2. This is evidence of how widely JSCC’s Clearing Services are used by both domestic and overseas users.

There are increasing numbers of non-Japanese swap counterparties executing trades on SEF or MTF and wishing to clear them at JSCC. Therefore, JSCC has been working on strengthening the STP, from trade execution to clearing. Now, client trades will be cleared without the Take-up Process, allowing clients using SEF and/or MTF to access JSCC’s Clearing Service with enhanced STP operations after trade execution.

Yasuyuki Konuma, President & CEO of JSCC, commented as follows: “I believe that this initiative will make the Japanese IRS market more efficient and robust, for the benefit of clients in particular. We are committed to enhancing our services further, in line with the growing importance of electronic trade execution for swaps by enhancing STP, which will contribute to the efficiency of the Japanese derivative markets for both Japanese and non-Japanese users.”

*1 “Take-up Process” refers to a confirmation process between JSCC and a Clearing Broker, where the Clearing Broker agrees to accept their clients’ trades, prior to the acceptance of that trade for clearing by JSCC. The omission of “take-up” will be subject to certain arrangements between a Clearing Broker and its Clients.
*2 See the announcement of JSCC on 1st September, 2023: Record-Breaking Volume in Clearing Service for Interest Rate Swap