Starting from November 1, 2012, mandatory clearing will be imposed on certain OTC derivative transactions under the Financial Instruments and Exchange Act (FIEA). To help members comply with the requirements of FIEA, ISDA has published the Confirmation on Mandatory Clearing Obligation of OTC Derivatives Transactions (the “Confirmation”) and the Request Regarding Mandatory Clearing of OTC Derivatives Transactions (the “Request”) which summarizes why the Confirmation is required and who is requested to submit the Confirmation. Please see “Request” for the details. Submitting procedures are also explained in the “Request”.
The Confirmation was originally prepared for the OTC derivative transactions set out in Article 156-62(i) and (ii) of the FIEA. Starting from December 1, 2014, the Confirmation will only apply to certain CDS transactions set out in Article 156-62(i) of the FIEA due to the amendments to the relevant ordinances. It should be noted that from December 1, 2014, the OTC derivatives transactions set out in Article 156-62(ii) may be required to be cleared under the FIEA regardless of the contents of the Confirmation.