On Dec. 14, JPN SCC proposed USD as additional eligible collateral.
JPN SCC outlined addition of USD cash to eligible collaterals in IRS clearing service, to enhance convenience for stakeholders by including USD cash in eligible collaterals.
USD Cash Collateral
Will be transferred, managed through designated bank accounts; managed via reverse repo transactions, lending to or depositing in savings accounts at designated banks.
The exchange rate for converting USD to JPY conversion is based on the Tokyo Foreign Exchange Market, with periodic revisions of the haircut on USD cash collateral.
Profits from collateral management belong to JPN SCC, while losses are shared by clearing participants and customers, prorated according to total amount of collaterals.
In case of default, JPN SCC will liquidate collateral, apply proceeds after deducting fees to the payment of obligations or loss compensation, no custody fee for time being.
Consultation Period
Consultation is open until Jan. 13, 2023, for planned implementation on Apr. 1, 2024.
Mar. 1, 2024 Revisions Finalized
On Mar. 1, 2024, JPN SCC said that no comments have been received during the consultation period and that the revised rules will be effective from Apr. 1, 2024.
Mar. 22, 2024 Postpone Effectiveness
On Mar. 22, 2024, JPN SCC announced that the effective date for the revised rules would be postponed, due to the need to adjust contracts with fiduciary trust banks.
As well as due to arrangement for withholding taxes on investment income.
The new effective date will be announced separately as soon as it is determined.
Dec. 2024 Final Effectiveness
On Dec. 13, 2024, JPN SCC said that the revised rules are effective from Jan. 6, 2025.
