Tokyo Commodity Exchange – TOCOM

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Definition: Tokyo Commodity Exchange – TOCOM

TOCOM is the largest derivative platform in Japan which regulates trading of futures contract and options on metals, oil, rubber and other natural resources. It was established in 1984 as a result of the merger of Tokyo Textile Exchange, Tokyo Gold Exchange and Tokyo Rubber Exchange. In 1991 electronic trading was launched and the clearing process was moved to Japan Commodity Clearing House. In 2009 it introduced a new trading system to promote 24 hour trading. It has signed memorandum of understanding with Singapore Mercantile Exchange and Dubai Mercantile Exchange to develop and strengthen new business opportunities in the commodity market.

Through TOCOM investors can trade in

• Futures Contract- Metals such as Gold, Silver, Platinum, Aluminium, Palladium & Oil including Crude oil, Kerosene, Gasoline & Rubber

• Options- Gold

Gold options is the largest product accounting for one-third of the total volume followed by gasoline futures at 22%, platinum at 16% and rubber at 14%.

There are 3 types of members in TOCOM

• Broker member- They are granted direct access and voting rights at a higher entry cost. They can conduct proprietary trading and can also act as brokers

• Trade member- They have direct access and voting rights but at a lower entry cost. They are allowed to carry out only proprietary trading

• Associate member- They do not have direct access or voting rights and their entry cost is lower than that of trade members



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