A complex framework

Many Japanese financial institutions now conduct their derivatives business through their securities firms, but there are a number of legal risks in using a securities dealer as a derivatives trading entity, writes Tan Ser Kiat of Denton Wilde Sapte Kashio Law Office.

A fundamental principle of Japanese financial laws is that each type of financial institution can only engage in businesses that are specifically allowed under the relevant laws. Prior to the 1998 financial liberalisation, this meant that banks were, in relation to over-the-counter derivatives business, confined to dealings in foreign exchange, interest rate and currency derivatives,(1) and no type of financial institution was allowed to trade in OTC securities derivatives.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here