JCCH was established on December 24, 2004, to conduct an independent centralized Clearing-House operation. It is organized as a stock company owned by all Japanese Commodity Exchanges and the Japan Commodity Futures Industry Association which is an association of FCMs.

On May 2, 2005, JCCH started providing clearing and settlement services for the transactions of all commodity exchanges in Japan.

These services are integral to the efficient operation of all of the commodity markets, as JCCH imposes itself as the counterparty to each trade.

This service provides a high level of market integrity as it minimizes the risk of default by either party to each and every transaction.

The operation of JCCH brings 4 key benefits:

First, JCCH enhances market integrity.

JCCH acts as the counterparty to each transaction, thereby minimizing the risk of counterparty default to all market participants.

Second, JCCH improves efficiency in investment funds by aggregating the margin and mark-to-market profit or loss.

JCCH is the common Clearing House for Commodity Exchanges in Japan, which allows JCCH to adopt SPAN Margining system, permitting to offset risks between Commodity Exchanges and aggregate mark-to-market profit or loss that is generated from all Commodity Exchanges.

Third, JCCH provides for efficient management of clearing funds.

Prior to the establishment of JCCH, FCMs had to provide clearing funds sufficient to satisfy different exchanges, for both the house account and the customer account. This required managing some different accounts for clearing and settlement. Under the JCCH model, each clearing participant maintains one account at JCCH which is netted based on the daily marking - to - market requirements for all positions held at all exchanges.

Forth, JCCH allows for the streamlining of back office operations for all clearing participants.

As marking - to - market operation and management of margins are integrated through JCCH, there is a reduction in error and a simultaneous corresponding cost savings.