The Commodity Futures Trading Commission's Market Participants Division has released an interpretation regarding the financial reporting requirements for Japanese nonbank swap dealers. These entities are regulated by Japan's Financial Services Agency.
In July 2024, the Commission issued a comparability determination and order allowing Japanese nonbank swap dealers to comply with U.S. capital and financial reporting requirements through substituted compliance, provided they meet certain conditions outlined in the Japanese Comparability Order. One such condition requires these dealers to submit their Annual Business Report from their home regulator to both the CFTC and the National Futures Association.
The recent staff interpretation clarifies that these dealers can fulfill this requirement by submitting specific schedules of the Annual Business Report, known as In Scope Schedules. This submission must adhere to translation, U.S. dollar conversion, and deadline criteria set forth in condition 9 of the order.
This clarification was made following a request from the Securities Industry and Financial Markets Association on behalf of its members who rely on this order.
