Derivatives 2025

JAPAN Law and Practice Contributed by: Daisuke Tanimoto, Etsuko Yamazaki and Miki Okuda, Anderson Mōri & Tomotsune

No futures or options referencing crypto-assets are currently listed in Japan. On 11 October 2023, the Tokyo Stock Exchange (TSE) established a carbon credit market for J-Credits. On this carbon credit market, carbon dioxide equivalent quotas and other similar products are traded. In June 2024, the JFSA launched “Study Group on Financial Infrastructure Related to Carbon Credit Transactions” and, through hearings with market participants to ascertain the actual status of carbon credit transactions, has discussed issues to improve the transparency and soundness of carbon credit transactions. On 20 June 2025, the JFSA published “the Report of Study Group on Financial Infrastructure Related to Carbon Credit Transactions” (the “Report”). The Report pointed out that the carbon credit market is in its infancy, and that related systems and products are complex, diverse, and subject to change. There - fore, the Report referred to the importance of capacity building (improving literacy) among stakeholders, the importance of co-operation among stakeholders, the need to ensure appropriate explanations at the time of sales, the need to ensure transparency of transac - tions and markets through information disclosure, the need to sophisticate risk management, and the need to ensure consistency with international discussions. The Report also suggested that discussions on the emissions trading system are scheduled to begin in 2026 in Japan. Emission allowance derivatives have generally been considered to not relate to either financial instru - ments or commodities. However, the legal status of carbon credits and how to regulate them is still under discussion, and therefore it is necessary to closely watch announcements of the JFSA or other Japanese authorities in the future. 2.2 Swaps and Security-Based Swaps It is usual to conclude an ISDA Master Agreement for swap transactions. Voice trading is generally more common than electronic trading. Swaps referencing financial instruments (including securities) are regulated as OTC Financial Derivatives Transactions under the FIEA, whereas swaps refer -

encing commodities are regulated as OTC Commod - ity Derivatives Transactions under the CFEA. Swaps cleared by the JSCC are subject to the JSCC’s clearing rules. Uncleared swaps are subject to margin requirements, as described in 4.1.2 Margins . 2.3 Forwards Although cash-settled forward transactions are regu - lated as OTC Financial Derivatives Transactions or OTC Commodity Derivatives Transactions (depending on the underlying assets), spot or forward transac - tions which are settled only physically are considered sales and purchases of underlying assets, which do not fall under the definition of OTC Financial Deriva - tives Transactions or OTC Commodity Derivatives Transactions. 2.4 Listed v Over-the-Counter OTC Derivatives (1) Type I FIBO registration requirement under the FIEA Engaging in the business of acting as a principal, intermediary, broker or agent in OTC Financial Deriva - tives Transactions falls under the definition of a Type I Financial Instruments Business. Under the FIEA, a person who conducts a Financial Instruments Busi - ness must be registered with the JFSA as a Type I Financial Instruments Business Operator (“Type I FIBO”). (2) Regulation of Foreign Securities Dealer under the FIEA A Foreign Securities Dealer is defined as an entity which (i) engages in a business involving securities- related transactions in accordance with the law of a foreign jurisdiction, and (ii) is not registered as a Financial Instruments Business Operator (FIBO) or licensed as a Financial Institution in Japan. A Foreign Securities Dealer is generally prohibited from acting as a principal, intermediary, broker or agent in secu - rities-related transactions with a customer in Japan, including securities-related OTC Financial Derivatives Transactions.

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