Japan Securities Clearing Corporation: Global Standardization Of Regulatory Reporting Leveraging DRR & CDM

Leveraging the new standardized framework for regulatory reporting based upon ISDA’s (*1) globally promoted "Digital Regulatory Reporting (DRR)" solution and the FINOS (*2) open source managed "Common Domain Model (CDM)", JSCC plans to begin production-parallel operations of its regulatory reporting to the Financial Services Agency (FSA, the Japanese financial regulatory authority) and the CFTC (U.S. financial regulatory authority) from June 2025. JSCC is the first CCP (Central Counterparty) and Japanese entity to announce the adoption of DRR and CDM within a production environment.

JSCC joined The Linux Foundation in October 2023 and FINOS in June 2024 prior to its proof of concept utilizing DRR/CDM in August 2024, and has since conducted extensive discussions and experiments with major financial market organizations on the possibilities and future potential of open source software (OSS) and ecosystem-friendly solutions that can be shared globally and across industries. At the FINOS premier "Open Source in Finance Forum" held in New York in September 2024, JSCC's visionary efforts to date were recognized with JSCC being awarded the "Trailblazer Award."

JSCC President and CEO Konuma Yasuyuki said "Firstly, I would like to express my respect and gratitude to ISDA, FINOS, supporting developers, and all others involved with this cutting-edge global standard solution of DRR/CDM. I am also very pleased to now announce our plans to integrate DRR/CDM within our clearing organization processes. I want JSCC to continue its mid-long term perspective by proactively exploring further initiatives with global standardization and open sourced ecosystems that contribute to the advancement and stabilization of global financial markets."

“We are delighted that JSCC is adopting ISDA’s DRR as part of its regulatory reporting processes. By taking an industry-agreed interpretation of the reporting rules and converting it into code using the CDM, the ISDA DRR brings greater efficiency, automation, accuracy and consistency to the reporting of derivatives trades. ISDA has pledged to support 11 reporting rule sets in nine major jurisdictions through the DRR, so we look forward to working with JSCC as it rolls out its adoption,” said Scott O’Malia, Chief Executive of ISDA.

“We are proud to have such an integral participant in the global market infrastructure like JSCC in the FINOS Community and to witness their swift adoption of the CDM,” said Gabriele Columbro, Executive Director of FINOS and GM of Linux Foundation Europe. “Since becoming an open standard in 2023 within our Open RegTech initiative, the CDM has seen substantial adoption by major financial institutions for regulatory applications. As this momentum continues, we anticipate more firms investing in open tooling to accelerate CDM adoption across a broader range of business use cases.”

With the production parallel from June 2025, JSCC will begin comparative verification against its production data from the current system for IRS (interest rate swaps) transaction reporting to FSA and CFTC. JSCC will furthermore add CDS (credit default swaps) to its DRR/CDM based regulatory reporting and incrementally expand the DRR functionality (together with ISDA's plans to increase the number of target regulatory authorities).
Additionally, because CDM's future-oriented design framework may contribute to the innovative evolution of future financial systems, JSCC will continue on a mid-long term perspective to explore through experiments CDM's applicable scope.