Changes in the Market Management Detailed Rules in Connection with Revised Position Limits
TOCOM is currently striving to increase the market’s functionality as a part of the industrial infrastructure and to create internationally competitive rules for market operations by enhancing market reliability and convenience for market participants. As part of this endeavor, for customer position limits on certain commodities, TOCOM made the distinction between commercials and non-commercials and assigned higher position limits to commercials.
TOCOM has extended the commercials category to all commodities to enhance convenience for commercials.
Moreover, with direct investment in commodities futures markets through investment trusts, etc. enabled by last year’s revision of the Investment Trust and Investment Corporation Act (Japan), in order to create an attractive market environment also for investment trusts, a new category for investment trusts, etc. has been introduced, with the same position limits applicable to commercials.
Furthermore, for certain commodities, position limits for members had been linked to their net assets and there may be cases where position limits lower than those for customers are applied depending on the net asset amounts. Therefore these position limits have been revised.
These changes took effect on October 1, 2009.
Details of the changes
(1)Customer position limits
- Customers have been categorized into commercials and non-commercials with respect to gold, silver, crude oil, gasoline, and kerosene futures, with position limits for commercials identical to those for members. The same rules have also been implemented for other commodities.
- As for the gold contract, in order to better accommodate the requirements of commercials, position limits for commercials have been further increased, taking into account the low risk of price manipulation thanks to the large demand and supply in this commodity.
(ii) Investment trusts, etc.
- Position limits for investment trusts, etc. were the same as those for non-commercial customers. This situation had prevented the formation of investment trusts, etc. that invest in the TOCOM markets. Therefore, a new customer category labeled “Investment Trust Customer” has been established. For investment trusts, etc. that meet specific conditions, position limits are identical to those applicable to commercials.
- Eligible investment trusts, etc., include entities using collective investment schemes, such as investment trusts, ETFs, and commodities funds, etc., that are filed with the Financial Services Agency of Japan or an authority corresponding to the Financial Services Agency in a foreign jurisdiction.
(2)Member position limits
- As for gold, silver, crude oil, gasoline and kerosene, the same position limits have been applied to all members, and members have been required to deposit a Supplementary Clearing Margin commensurate with their net assets. The same rules have also been adopted for other commodities.
- With respect to gold futures, position limits applicable to members have been further increased in the same way as for commercials, taking into account the low risk of price manipulation thanks to the large demand and supply in this commodity.
Please see the contract specification pages on TOCOM’s website for the customer position limits applied from October 1, 2009.