Tokyo Commodity Exchange

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Tokyo Commodity Exchange
Image:Tocom_logo.JPG
Founded 1984
Headquarters Tokyo
Key People Masaaki Nangaku, Chairman & CEO
Products Futures in oil, precious metals, industrial metals and rubber, and options on gold futures
Web site http://www.tocom.or.jp

The Tokyo Commodity Exchange (TOCOM) is Japan's largest derivatives platform, offering futures contracts on precious and industrial metals, oil-related energy products, and rubber as well as options on gold futures. It is a non-profit membership organization as defined under the Commodity Exchange Law of 1950, which regulates all commodity futures and options trading in Japan.[1]

The electronic exchange announced plans in June 2007 to pursue demutualization and a possible initial public offering (IPO), but has also been linked to government-sponsored plans to create a single Japanese securities and derivatives platform centered around the Tokyo Stock Exchange. TOCOM will also introduce a new trading system to facilitate 24-hour trading in 2008/09.

In a written message on the TOCOM Web site, exchange chairman and CEO Masaaki Nangaku said the 2008 fiscal year is viewed as a "major turning point" in the history of the exchange. He wrote that as TOCOM makes its market even more reliable and convenient, the exchange will concert its efforts to firmly positioning itself as a primary commodity exchange in Asia.[2]

In 2008, the Japan Commodity Futures Industry Association requested that the Tokyo Commodity Exchange and the Tokyo Grain Exchange merge to cut management costs.[3]

Contents

History

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The Tocom was established on November 1, 1984 through the merger of the Tokyo Textile Exchange (established 1951), the Tokyo Rubber Exchange (1952) and the Tokyo Gold Exchange (1982).[4]

Electronic trading was launched in 1991, and the energy complex was established in 1999, with connections to ISVs following in 2003 to provide access for overseas investors. A task force was established in mid-2007 after members expressed support for demutualization and a possible IPO.[5]

Key People

Masaaki Nangaku, Chairman & CEO

Structure and Regulation

The TOCOM has 50 members and 54 member FCMs. Morgan Stanley became the first overseas member in 2005. Clearing was switched in 2006 from an in-house unit to the independent Japan Commodity Clearing House. The exchange is overseen by Japan's Ministry of Economy, Trade and Industry.

Product Development

Gold options were the single-largest product in 2006, accounting for a third of total contract volume, with gasoline futures ranked second at 22 percent, followed by platinum at 16 percent and rubber at 14 percent.

The merged exchange started with precious metals, rubber and textiles with the latter withdrawn in 1991. The complex was expanded with palladium futures in 1992, adding aluminum in 1997 and establishing the oil market - with futures in gasoline and kerosene - in 1999. An unsuccessful push into Middle East crude oil futures followed in 2001, and gas oil futures - now also suspended - followed in 2003.

Options on gold futures were launched in 2004 and the Tocom Index was started in 2006.

Contracts Listed

References

  1. ↑ Profile. TOCOM. Retrieved on September 13, 2008.
  2. ↑ Message From The Chairman. TOCOM. Retrieved on September 12, 2008.
  3. ↑ Industry Body to Request 2 Tokyo Commodity Exchanges to Merge. JCN. Retrieved on September 12, 2008.
  4. ↑ Tocom Pamphlet. TOCOM. Retrieved on December 26, 2007.
  5. ↑ TOCOM members back demutualization for IPO. Financial Times. Retrieved on January 14, 2008.

Resources

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