In recent years, OTC derivatives markets such as the interest rate and credit derivatives markets have continued to expand both domestically and internationally.
In the U.S. and Europe, existing exchanges and clearing and settlement organizations are increasingly utilizing existing infrastructures to provide post trade services that promote efficiency and enhance the transparency of OTC derivatives markets. In this way, there is potential for expansion and further development of the Japanese market. This may be achieved through cooperating with existing infrastructure organizations to standardize and systemize post-trade services.
Japan Securities Clearing Corporation, Japan Securities Depository Center, Inc. and Tokyo Stock Exchange, Inc. have set up a study group to solicit the opinions of a wide variety of market participants in an effort to examine potential post-trade services for OTC derivatives trades.
1. The Purpose of Establishing the Study Group
The study group is designed to examine the feasibility of concentrative post-trade services provided by securities-related infrastructural organizations. These services promote efficiency, improve risk management and contribute to the further development of OTC derivatives market in Japan.
Within OTC derivatives trading, interest rate derivatives and credit related derivatives will be the objectives of the study. Other products will be included in the study as the need arises.
3. Management of the Study Group
Japan Securities Clearing Corporation (JSCC), Japan Securities Depository Center, Inc. (JASDEC) and Tokyo Stock Exchange, Inc. will jointly manage and facilitate discussions in the study group
Member firms and observers are listed below. The study group may invite other organizations, such as system vendors.
5. Theme of the Study (Draft)
- Examine the current market situation.
- Examine the need for standardization and centralization of post-trade operations,.
- Discuss risk management methods.
As a general rule, the study group will meet once a month and will compile a summary of their findings in a report by the end of FY 2008. The first meeting will be held around late September or early October 2008. Based on the findings of the report, JSCC and JASDEC will begin conducting concrete examinations into the development of systems, etc.
(Members of the Study Group)
- Goldman Sachs Japan Co., Ltd.
- JPMorgan Securities Co., Ltd.
- Daiwa Securities SMBC Co. Ltd.
- Chuo Mitsui Asset Trust and Banking Company, Limited
- Deutsche Securities Inc.
- NOMURA SECURITIES CO., LTD.
- Mizuho Corporate Bank, Ltd.
- Mizuho Securities Co., Ltd.
- The Bank of Tokyo-Mitsubishi UFJ, Ltd.
- Merrill Lynch Japan Securities Co., Ltd.
- Morgan Stanley Japan Securities Co., Ltd.
- UBS AG, Tokyo Branch