Regulatory Framework for Sustainability-linked Derivatives: Japan Analysis

Interest in environmental, social and governance (ESG) issues has grown globally, as countries, companies and investors have focused more on this area. The same trend has occurred in Japan.

Sustainability-linked derivatives (SLDs) are not yet a major product in the Japanese market, but they have emerged as one of the tools available to help firms meet their ESG objectives. As SLDs gain increasing attention around the world, and as some SLDs emerge in Japan, it is necessary for users to understand how these instruments fit into existing regulatory regimes.

This whitepaper analyzes two categories of SLDs in the context of the derivatives regulatory framework in Japan. Specifically, it considers:

  • Whether SLDs would be classified as ‘over-the-counter (OTC) derivatives transactions’ or ‘OTC commodity derivatives transactions’, and how they are regulated; and
  • Compliance issues for market participants to consider when executing SLDs.

Documents (1) for Regulatory Framework for Sustainability-linked Derivatives: Japan Analysis

ISDA AGM Studio: Jacques Vigner, BNP Paribas

Jacques Vigner, ISDA board member and chief strategic oversight officer for global markets at BNP Paribas, speaks with Mark Gheerbrant, global head of risk and capital at ISDA, on the key obstacles to a consistent, risk-appropriate capital framework and how to...

ISDA AGM Studio: Future Leaders in Derivatives

Following publication of the latest whitepaper from the ISDA Future Leaders in Derivatives (IFLD) program, Collateral and Liquidity Efficiency in the Derivatives Market: Navigating Risk in a Fragile Ecosystem, Joel Clark talks to IFLD participants Koen Ottenheijm, senior treasury and...

Australian Superannuation Funds Use of Derivatives

The funds under management (FUM) of Australian superannuation funds have grown substantially since legislation was introduced in 1992 requiring employer contributions. Over the past five years, total FUM has climbed from approximately A$2.3 trillion ($1.44 trillion) to A$4.1 trillion and...