The bill for the amendment of the Financial Instruments and Exchange Act (Act No. 25 of 1948) was passed by the Diet on May 12 2010 and was promulgated on May 19. The Amendment consists mainly of (i) provisions to improve the stability and transparency of the settlement of over-the-counter (OTC) derivative transactions and other transactions; (ii) provisions to strengthen the regulation and supervision of securities companies at a group level; and (iii) other investor protection mechanisms.
At the G20 Pittsburgh summit in September 2009, the G20 members agreed in their leaders' statement that "all standardised OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end-2012 at the latest. OTC derivative contracts should be reported to trade repositories."
Subsequent to this statement, the Financial Services Agency (FSA) published a paper entitled Development of Institutional Frameworks Pertaining to Financial and...