FIA has submitted comments to Japan Securities Clearing Corporation’s consultation on its proposed consolidation of the Financial Instruments and Exchange Act clearing funds.
FIA recognises that consolidation could reduce the aggregate clearing fund requirements, simplify operations and enable more efficient funding management. At the same time, FIA emphasises the importance of preserving transparent and risk-sensitive loss allocation and avoiding material cross-product subsidisation between clearing qualifications with different participant and risk profiles.
FIA also seeks further analysis and clarification on the sizing and allocation of the consolidated clearing fund, potential segmentation between financial and commodity derivatives, loss allocation and juniorisation, assessment exposure and JSCC resources. In addition, FIA provides comments on calibration and collateral requirements and the proposed margin period of risk changes for precious metals.
