Eurex Clearing to Expand into Japan, Secures License from FSA

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 Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term pool for Euro Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term.

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."

“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.”