JSCC swap surge triggers plea to rethink US client ban

With over two-thirds of yen RFR swaps volumes going to JSCC, calls grow for CFTC to ease clearing restrictions

Calls are growing for US regulators to rethink a ban on US clients clearing yen interest rate swaps at Japan’s central counterparty, after the demise of the yen Libor benchmark led to a dramatic shift in liquidity in the replacement risk-free rate (RFR) swaps toward the domestic CCP.

In Japan, cleared yen interest rate swap liquidity has until recently been split roughly 50-50 between two clearing houses, Japan Securities Clearing Corporation and London-based LCH. Under Commodity Futures