It is good news that the UK and Japan have created a joint regulatory forum in financial services as part of their trade deal (detail from p106): a few quick and quite niche thoughts 1/ https://www.mofa.go.jp/files/100107066.pdf

The forum builds on the EU Japan joint regulatory forum in financial services that was created last year and held its first meeting in Japan (conveniently) during the world cup rugby in October 2019 2/
https://www.fsa.go.jp/en/news/2019/20191011-2/01.pdf

The forum aims to encourage closer bilateral regulatory cooperation to reduce frictions and also ensure UK and Japan are broadly aligned in international forums on global standards 3/

One key area to discuss might be clearing: the UK is concerned that the EU wants to force euro-denominated clearing to be conducted in the EU under the direct supervision of EU authorities 4/

Japan requires clearing of yen-denominated swaps by some Japanese banks to be cleared in Japan under the direct supervision of Japanese authorities 5/

There’s a cost to that: as Mark Carney pointed out in a speech a few years back – onshore clearing is 1 to 3 basis points more expensive than offshore clearing 6/

That seems small but multiply it out across the huge numbers involved and you get a big number: in euro-denominated swaps it would be billions – perhaps tens of billions of euros – a year 7/

A good start for the first meeting would be for the UK to find out more about why Japan has a location policy on some clearing, why the costs are higher, why Japan is prepared to live with those costs, and what it might mean for future UK / EU discussions on clearing / ENDS