Japan Looks at OTC Clearing
September 22, 2008
The Tokyo Stock Exchange (TSE), Japan Securities Clearing Corp. and Japan Securities Depository Center have formed a study group to look at the possibility of establishing centralized post-trade services for over-the-counter derivatives in Japan. "There is no clearing service for OTC derivatives trading in Japan," said TSE spokesperson Mitsuo Miwa. "We only have it for exchange-traded derivatives."
According to the Sept. 11 announcement, representatives from 12 members of the Tokyo exchange, including Goldman Sachs Japan Co., JP Morgan Securities Co. and Daiwa Securities SMBC Co., are represented in the group. Tokyo-based Toshiba Corp., a provider of trading technology in Japan, is also participating.
The study group, which will gather for the first time late this month or in early October, will meet once a month and compile a summary of findings by April. "We will discuss the whos and hows," Miwa added. The group will also focus on improving risk management and trading efficiency.
Derivatives trading volumes have been soaring in Japan since 2006. According to Bank of Japan, the balance of commodity derivatives contracts reached $33.4 billion at the end of June--up 10.3 percent from Dec. 31--while OTC trading came to $27.5 trillion, an increase of 10.1 percent.
