Article: The implications of Emir and Dodd-Frank for Asia’s CCPs - Risk.net

20 March 2013 | Bill Hodgson

If a non-European (or non-US) CCP doesn't apply for recognition under EMIR or Dodd Frank, banks in the EU or US may be blocked from being members of those CCPs. See article at Risk, subscription required. The implications of Emir and Dodd-Frank for Asia’s CCPs - Risk.net.



Bill, I don't have a Risk.net subscription but I see from CFTC website that CFTC issued exemptive relief until end 2013 (or when JSCC registers with CFTC as a DCO) - see letter http://cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/12-5... the time limit arrives it is of interest that JFSA flexibility carefully extended to non-Japanese banks will go away. In effect JFSA's allows commercial revenue incentives to drive non-Japanese vs Japanese bank trades to clear - only trades between two Japanese banks are mandated I believe. Once JSCC registers with CFTC and ESMA as a DCO/ recognized CCP, the CFTC clearing mandate will then apply to vanilla JPY and iTraxx trades between some US/EU bank entities (e.g. US/EU banks and their Japan branches) and Japanese banks. Two questions: 1. This will mean that CFTC is now regulating a decent chunk of the Japan domestic swaps market. Does this cause any inherent problems not already foreseen?2. The above alone doesn't seem to forcibly block EU and US banks from continuing to be members at JSCC. Is there another rule fragment that does so or have I interpreted the word block too literally?Jon

Jon, completely agree,great comment.

Reblogged this on Carl A R Weir's Blog.