Commission Implementing Decision (EU) 2019/684 of 25 April 2019 on the recognition of the legal, supervisory and enforcement arrangements of Japan for derivatives transactions supervised by the Japan Financial Services Agency as equivalent to the valuation, dispute resolution and margin requirements of Article 11 of Regulation (EU) No 648/2012 of the European Parliament and Council on OTC derivatives, central counterparties and trade repositories (Text with EEA relevance.)

• CELEX: Implementing Decision (EU) 2019/684
• Articles: 3

Article 1

For the purposes of Article 13(3) of Regulation (EU) No 648/2012, the legal, supervisory and enforcement arrangements of Japan for valuation and dispute resolution that are applied to transactions regulated as OTC derivatives by the Financial Services Agency of Japan (‘JFSA’) or OTC Commodity derivatives by the Japanese Ministry of Economy, Trade and Industry (‘METI’) and the Japanese Ministry of Agriculture, Forestry and Fisheries (‘MAFF’) and that are not cleared by a CCP shall be considered as equivalent to the corresponding requirements set out in paragraphs 1 and 2 of Article 11 of Regulation (EU) No 648/2012, where at least one of the counterparties to those transactions is established in Japan and registered with the JFSA as a Financial Instrument Business Operator (‘FIBO’) or a Registered Financial Institution (‘RFI’).

Article 2

For the purposes of Article 13(3) of Regulation (EU) No 648/2012, the legal, supervisory and enforcement arrangements of Japan for the exchange of collateral that are applied to transactions regulated as OTC derivatives by the JFSA or OTC Commodity derivatives by METI and MAFF and that are not cleared by a CCP shall be considered as equivalent to the requirements of paragraph 3 of Article 11 of Regulation (EU) No 648/2012, where the following conditions are satisfied:

(a)

at least one of the counterparties to those transactions is established in Japan and registered with the JFSA as a FIBO or a RFI and that counterparty is subject to the margin rules of Japan;

(b)

transactions are marked-to-market and variation margin is exchanged on a daily basis where the counterparties to those transactions, established in Japan, have an average total amount of the notional principal of OTC derivatives for a one-year period from April two years before the year in which calculation is required (or one year if calculated in December) below JPY 300 billion.

Article 3

This Decision shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union .