CFTC Issues No-Action Letter for Japan Securities Clearing Corporation and Its Clearing Participants

The CFTC Division of Clearing and Risk ("DCR") issued the attached letter stating that DCR will not recommend that the CFTC take action against Japan Securities Clearing Corporation ("JSCC") for failing to register as a derivatives clearing organization ("DCO") under CEA Section 5b(a). The letter also states that the DCR will not recommend action against JSCC's qualified clearing participants, or a parent or affiliate of a JSCC qualified clearing participant, for failing to clear yen-denominated interest rate swaps subject to the CFTC's clearing requirement under CEA Section 2(h)(1)(A) through a CFTC-registered DCO. Under this relief, JSCC would be permitted to clear credit default swaps based on an iTraxx Japan index and yen-denominated interest rate swaps referencing either LIBOR or the Tokyo Interbank Offered Rate, provided that JSCC will not accept, and no JSCC qualified clearing participant will offer, swaps for clearing on behalf of a U.S. customer.

This relief will be effective until December 31, 2013, or the date upon which JSCC registers as a DCO.

See: CFTC Letter 12-56: Sections 5b(a) and 2(h)(1)(A) of the Commodity Exchange Act and Parts 39 and 50 of Commission Regulations; No-Action.