The Taiwan Futures Exchange (TAIFEX) plays a central role in Taiwan’s derivatives market, offering a regulated platform for trading futures and options across multiple asset classes. As part of broader efforts to strengthen financial market infrastructure and align with global best practices, Taiwan’s Financial Supervisory Commission (FSC) has mandated central clearing for Taiwan Dollar Interest Rate Swaps (TWD IRS), effective 1 July 2025. This significant development marks a new chapter in Taiwan’s interest rate derivatives market, with the aim of increasing transparency, reducing systemic risk, and improving operational resilience.

Key Challenge: Transition to Mandatory Clearing

For many market participants, particularly those accustomed to bilateral workflows, adapting to the new central clearing requirements presents significant challenges. These include

• Operational and technology changes needed to support central clearing workflows.
• Coordination with multiple counterparties, clearing members, and infrastructure providers.
• Increased pressure to meet T+0 trade affirmation and confirmation timelines.
• Change management and cost concerns, particularly among firms with limited prior exposure to clearing.
• Compliance failures can lead to penalties and operational disruptions.

The OSTTRA Role and Solution

OSTTRA, a leading provider of post-trade infrastructure, is well-positioned to support market participants through this transition. Our established OSTTRA Markitwire confirmation platform offers:

1. Strong network connectivity to global and regional counterparties.
2. T+0 trade matching and affirmation, enabling timely and accurate submission to clearing.
3. Multi-workflow support that allows firms to continue with existing bilateral models while preparing for central clearing.
4. Resilient and scalable infrastructure ensures clients can handle increasing trade volumes and maintain operational continuity even during peak periods.
5. A proven track record in helping firms navigate similar regulatory shifts in other markets.
6. Extensive expertise developed over more than 20 years of supporting the derivatives market.

By offering scalable and interoperable post-trade solutions, OSTTRA reduces the friction of adoption and supports a smoother path to compliance with the upcoming clearing mandate.