JSCC Launches Next JGB Clearing System

The Japan Securities Clearing Corporation (JSCC) launched a new clearing system for Japanese government bonds (JGBs) along with a new JGB futures framework. 

The “Next JCB Clearing System” should improve sell-side participation as it replaces a legacy system, covering clearing services for repo transactions and straight cash trade on JGBs. 

As part of the launch, the JSCC introduced a new “JGB Futures Pair-off Netting” framework, which is part of its efforts to ease settlement operations for clearing members. 

The new framework revises its rules to introduce the netting of delivery settlement of JGB Futures Transaction in Listed Derivatives Clearing Service and settlement of Japanese Government Bonds in JGB Futures Pair-off Netting framework (formally called “JGB OTC Transaction Clearing Service”), aiming to improve smoothness and efficiency of settlement operations. 

For OTC transactions involving buying and selling JGBs, cash-secured bond lending transactions and standard report transactions is available against delivery settlement for 5-year, 10-year, and 20-year JGB futures, in addition to pair-off netting. 

The Framework was implemented on January 11, 2022, with the launch of JGB Clearing System replacement. 

More information on the “JGB Futures Pair-off Netting” framework can be found here.