(12)The margin rules of Japan apply to almost all OTC derivatives contracts as defined in point (7) of Article 2 of Regulation (EU) No 648/2012, with the exception of physically settled FX forwards and FX swaps, for which the margin rules of Japan set no requirements. FX transactions associated with the exchange of principal by means of cross-currency swaps are exempted from initial margin requirements. In addition, the margin rules of Japan do not contain any specific treatment for structured products, including covered bonds and securitisations. Under the terms of Regulation (EU) No 648/2012, only FX swaps and FX forwards are exempted from the initial margins requirements and only derivatives, associated with covered bonds for hedging purposes, are exempted from all margin requirements. This Decision should therefore only apply to OTC derivatives contracts that are subject to margin requirements under Regulation (EU) No 648/2012 and the margin rules of Japan.