Eurex Clearing has been granted a license as a “foreign financial instruments clearing organisation” by Japan’s Financial Services Agency (FSA), allowing the central counterparty (CCP) to expand its clearing services into the country.
Eurex’s decision to pursue a license in Japan, which has one of the largest fixed income markets, was driven by client demand, the company said in today’s statement. With the new license, Japanese financial institutions will be able to access Eurex for swap clearing directly.
Furthermore, firms will be able to combine their listed and over the counter (OTC) euro yield curve business in one place. The expansion into Japan will support the CCP’s EU-based liquidity pool for Euro Swaps.
Commenting on the license, Erik Müller, CEO of Eurex Clearing, said in the statement: “It’s an honour to be granted a license for a country which is one of the largest non-EU holders of European debt instruments.”
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“I would like to express my gratitude to the Japanese FSA and its staff for supporting us in this licensing process. With this step, we further geographically expand our service offering into Asia and underline our commitment to becoming the global home of the euro yield curve.”
Japan was next logical step for Eurex Clearing
According to the statement released today, gaining access to the Japanese market was the next logical step for Eurex Clearing as part of its strategy to expand its liquidity pool. This is due to Japanese institutions being very active in European fixed income futures on Eurex, plus it having one of the largest OTC derivatives markets globally.
Christopher Perkins, Global Head of OTC Clearing and Foreign Exchange Prime Brokerage at Citi, added: “Citi is very pleased to extend our unique and differentiated cleared swap connectivity on Eurex to the Japanese market. We look forward to working with Eurex to onboard new clients in Japan.”