The regulator stopped collecting electronic submissions at noon, and physical deliveries will stop by the end of today, according to the agency's Web site. The regulator disclosed in a draft on Dec. 17 that final decisions on so-called credit events should be made at domestic clearing houses, according to the Japanese document on the site. FSA spokesman Motoyuki Yufu declined to comment further.

Credit events that trigger credit default swap contracts in most countries include bankruptcy and failure to pay or restructure debt.

The proposal comes as regulators globally demand more transparency and tighter regulations on default swaps after the meltdowns of Lehman Brothers Holdings Inc. and American International Group Inc., two of the largest traders, froze credit markets and worsened the first global recession since World War II.

Credit-default swaps, which are used to speculate on creditworthiness or to hedge against losses on bonds and loans, let buyers demand payment from sellers if the underlying borrower fails to make scheduled interest or principal payments.

“The ruling on a credit event of credit-default swaps should not be made by a domestic clearing house,” the International Swaps and Derivatives Association, the industry group that sets standards in the credit swaps market, said in a statement at a public hearing on Dec. 24. “The decision should be made, as an international framework, by the determinations committee of the ISDA.”

Disagreement over swaps on consumer lender Aiful Corp. has disrupted Japan's market. ISDA's committee may rule this week on whether a “credit event” occurred, according to the association's Web site.

Japan's FSA will determine its final plan in January and prepare for legislation, Deputy Financial Services Minister Kouhei Ohtsuka said at a Dec. 17 press conference. “I want to submit the bill after March.” The timing is still up for discussion, he said.