ISDA published welcoming remarks by Chief Executive Officer Scott O’Malia for its forum on the future of asset management in Japan, arguing that a deeper and more accessible derivatives market is integral to Japan’s ambition to strengthen itself as an international asset management centre. The remarks point to Japan’s policy program led by the Japanese Financial Services Agency (FSA), including May 2025 updates to the Financial Instruments and Exchange Act that allow investment managers to delegate middle-office operations and investment management authority, alongside further work underway on corporate governance reforms and policies to support steady household asset building. O’Malia cited ISDA research showing 87% of nearly 1,200 companies across seven major stock indices use derivatives, and new ISDA and Crisil Coalition Greenwich findings from interviews with 20 senior market participants in which 89% agreed greater derivatives use would support the government’s asset management strategy, while also identifying constraints such as low liquidity in certain instruments, slower uptake of electronic trading and processing, and limited derivatives expertise across legal, operations and risk. The remarks also note that the US Commodity Futures Trading Commission issued no-action relief in September 2025, enabling US asset managers in Japan to clear yen swaps through Japan Securities Clearing Corporation under certain conditions. ISDA said it will use the research as the basis for future engagement with policymakers and market participants to improve derivatives market access for Japanese asset managers.
ISDA 2025-10-17
ISDA sets out case for expanding derivatives use in Japan’s asset management strategy and highlights CFTC relief for JSCC clearing
ISDA CEO Scott O’Malia emphasized the importance of a robust derivatives market for Japan's asset management ambitions, highlighting policy updates by the Japanese Financial Services Agency and ISDA research showing strong support for increased derivatives use. Challenges include low liquidity, slow electronic trading adoption, and limited expertise, with ISDA planning further engagement to enhance market access.