Tokyo Commodity Exchange Proposes Trading Rule Revisions

Source: Regulation Asia Editors, Regulation Asia 2020-07-30

TOCOM plans to revise its trading rules to coincide with the launch of a next-gen derivatives trading system known at J-GATE 3.0 in Q3 2021.

TOCOM (Tokyo Commodity Exchange) is planning to revise its trading rules in connection with the launch of J-GATE 3.0, a next-generation derivatives trading system.

Planned for launch in the third quarter of 2021, J-GATE 3.0 will be better aligned with changes in the business environment and the needs of market users, allowing for the timely addition of products and functionalities which will facilitate the development of long-tail products, TOCOM says.

As part of the J-GATE 3.0 initiative, TOCOM will partially revise its trading rules, with a view to making the market more reliable and convenient for investors, members, and other market users.

The proposed rule changes include an expansion of the night session, the application of the immediately executable price range to the opening auction, and the introduction of a static circuit breaker mechanism during regular trading hours.

TOCOM also proposes to expand the number of contract months offered in crude oil to 15 months, compared to just six months currently, and to delist cash-settled contracts in gasoline, kerosene and gas oil.

Market-to-limit orders (MTLO) will be abolished, and an order-to-trade (OTR) ratio limit will be introduced to enforce order placement discipline among market participants.

The revisions, detailed here for consultation, will be implemented at the launch of J-GATE 3.0 in the third quarter of 2021.

Aside from these revisions, TOCOM says it is considering the introduction of holiday trading in the derivatives market, in line with similar considerations at Osaka Exchange.

Both exchanges are subsidiaries of JPX (Japan Exchange Group), following a merger which saw most of TOCOM’s products (except for energy related commodities) transferred to Osaka Exchange.

TOCOM

J-GATE 3.0

Tokyo Commodity Exchange Proposes Trading Rule Revisions

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