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A Commodity Clearing Organization in Japan Becomes Certified to Provide Clearing Services to Financial Institutes or Other Organizations in Europe

In March 2017, the Ministry of Economy, Trade and Industry (METI), Ministry of Agriculture, Forestry and Fisheries (MAFF), and European Securities and Markets Authority (ESMA) concluded a memorandum of cooperation concerning a central commodity clearing organization for Japan. In response, Japan Commodity Clearing House Co., Ltd. (JCCH) has become certified to provide commodity clearing services to exchanges, financial institutes and other organizations in Europe.

1. Background

In August 2012, the European Market Infrastructure Regulation (EMIR) came into force. The EMIR requires central clearing organizations from Japan and other third countries to be certified by ESMA in order to be able to provide clearing services to exchanges, financial institutes and other organizations in the European economies.

As a condition of receiving this certification, the EMIR requires that regulations in the third country which houses the central clearing organization that receives such certification need to be recognized equivalent to the EMIR regulations; and, a framework for cooperation among the supervisory authorities for the central clearing organization in the third country need to be concluded. Concerning the former requirement, on December 15, 2016, the European Commission (EC) released its equivalent decision on Japan’s commodity clearing regulations. Concerning the latter requirement, METI, MAFF and ESMA concluded a memorandum of cooperation concerning a central commodity clearing organization from Japan, and in response, on March 29, 2017, ESMA registered JCCH (the central commodity clearing organization) as a certified organization.

2. Purpose of the memorandum of cooperation

As ESMA will not directly supervise or enforce its authority over the central clearing organization from Japan. Japan’s supervisory authority will be responsible for supervisory and enforcement roles.. For this purpose, the memorandum of cooperation stipulates information exchanges and other cooperation efforts between authorities.

The memorandum of cooperation provides the details of cooperation, including methods for ensuring smooth inter-notification of critical events involving JCCH and any legal violations.

Release date

April 3, 2017

Division in Charge

Commerce and Consumer Affairs Policy Division, Commerce, Distribution and Industrial Safety Policy Group

Ministry of Economy, Trade and Industry1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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