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home > Information > Press Releases > CFTC grants approval, allowing U.S. Customers access to the most liquid Yen Swap Market

CFTC grants approval, allowing U.S. Customers access to the most liquid Yen Swap Market

2025/09/16

On September 12, 2025, Japan Securities Clearing Corporation (“JSCC”) received an amended order of exemption from registration as a Derivatives Clearing Organization (“DCO”) and a no-action letter with regard to sections 4d(f) and 4m(1) of the Commodity Exchange Act and Commission Regulation 39.6(b)(1) (“No-Action Letter”), from the U.S. Commodity Futures Trading Commission (“CFTC”), allowing JSCC, under certain conditions, to expand the clearing services of JPY interest rate swap (“JPY-IRS”) to customers which fall under the CFTC’s definition of U.S. person (Note 1) (“U.S. Customers”). The exemptive relief also exempts JSCC’s Clearing Members clearing JPY-IRS for U.S. Customers from the requirements to register as Futures Commission Merchants (“FCM”) or Commodity Trading Advisors (“CTA”), subject to certain conditions (Note 2). As is the case under the previous order from the CFTC, JSCC may continue to clear JPY-IRS for the proprietary accounts of U.S. persons - e.g., U.S. and non-U.S. affiliates of any clearing members, U.S. clearing members and the CFTC-registered FCMs.

With this new amended order, U.S. Customers can now access the clearing venue with the deepest liquidity for JPY-IRS, ensuring that they are on a level playing field with their non-U.S. peers and U.S. swap dealers.

In response to this amended order, Yasuyuki Konuma, President and CEO of JSCC, commented: "We have been diligently working to obtain authorizations and expand our capabilities as a clearing organization in various overseas jurisdictions, including the U.S., Europe, Australia, Hong Kong, Switzerland, and Canada, to meet a desire of our global users to hedge risks in the most liquid Yen derivative market. With this exemptive relief, U.S. Customers are able to efficiently hedge yen rate risks by trading JPY-IRS and clearing at JSCC, which would be even more crucial during times of market stress. Given the recent rise in yen rates we have seen a significant increase in demand from global investors to effectively hedge risks in the most liquid market, it is commendable that the CFTC has permitted the long-sought access for U.S. Customers at this critical time.
Moving forward, we will continue to enhance our risk management practices, as well as the efficiency for clearing members and customers globally to risk hedge, in collaboration with trading facilities (Note 3) and third party vendors, such as affirmation platforms and trade compression service providers, which have played an integral role for the expanding ecosystem of yen derivative market."

  • Note 1
    U.S. person as defined in the CFTC's Interpretive Guidance and Policy Statement regarding Compliance with Certain Swap Regulations (78 Fed.Reg.45292 (July 26, 2013)) IV.A.4.
    http://www.cftc.gov/idc/groups/public/@lrfederalregister/documents/file/2013-17958a.pdf
  • Note 2
    https://www.cftc.gov/media/12671/JSCC AmendedExemptionOrder_09-12-2025/download
    https://www.cftc.gov/csl/25-32/download

    Under the terms and condition of the amended order and the No-Action Letter, Clearing Members of JSCC may clear JPY-IRS for U.S. Customers on the following conditions.

    1. JSCC clearing members may only solicit and accept orders for JPY-IRS from U.S. customers that are eligible contract participants as defined under Section 1a(18) of the CEA and Commission Regulation 1.3.

    2. JSCC clearing members that solicit and accept orders from U.S. customers for JPY-IRS may not be registered with the Commission as FCMs nor incorporated in the United States.

    3. JSCC clearing members that solicit and accept orders from U.S. customers for JPY-IRS must be affiliates of Commission-registered FCMs.

    4. JSCC must adopt rules that require any clearing member seeking to clear for a U.S. customer to provide written notice to, and to obtain an acknowledgment from, the U.S. customer prior to clearing that explains that (i) the clearing member is not registered with the CFTC as an FCM, nor a member of the National Futures Association; (ii) JSCC is exempt from registration with the Commission as a DCO; (iii) in the event of the bankruptcy of JSCC or a JSCC clearing member holding U.S. customer property, the bankruptcy would be governed by the laws of a non-U.S. jurisdiction; and (iv) in the event of the bankruptcy of JSCC or a JSCC clearing member holding U.S. customer property, the protections of the U.S. Bankruptcy Code, as defined in CFTC Regulation 190.01, that are applicable to customers of a registered FCM and DCO do not apply to the U.S. customers, or to the funds and positions of the U.S. customers. The written notice must include an explicit comparison of the protections available to the U.S. customer positions and funds under the U.S. Bankruptcy Code and Part 190 of the Commission’s regulations and JSCC’s home country regulatory regime. JSCC’s rules shall require the JSCC clearing member to retain the U.S. customer’s acknowledgment of the receipt of the written notice in its records. (The comparison document prepared by JSCC, titled "Protection Available to Customers on Interest Rate Swaps Cleared at JSCC: Comparison of Bankruptcy Protections Available to U.S. Persons under U.S. and Japanese Law" is available at https://www.jpx.co.jp/jscc/en/otc/i1h00a0000005j75-att/bankruptcyprotections_20250106.pdf.

    5. JSCC clearing members and JSCC must hold funds received from U.S. customers to margin, guarantee, or secure JPY-IRS, or funds accruing to U.S. customers as a result of JPY-IRS, in accordance with applicable Japanese laws, regulations, and JSCC rules.

【Contact】
Japan Securities Clearing Corporation
Clearing Planning Department
TEL:+81-3-3665-1234 (Main reception)