Tokyo Commodity Exchange, Inc. (TOCOM), Japan’s leading commodity futures exchange and Singapore Mercantile Exchange (SMX), the first pan-Asian multi-product commodity and currency derivatives exchange today announced that they have signed a licensing agreement for SMX to list Contracts* on TOCOM products.
Building upon the Memorandum of Understanding (MoU) signed on 23 April 2010 to explore mutually beneficial partnerships, senior officials from both exchanges signed a licensing agreement which would see the listing of several SMX TOCOM Contracts for products already being traded on TOCOM. These include crude oil, gasoline, kerosene and gas oil. The agreement does not rule out the possibility of cross-listing wherein TOCOM might also list SMX products.
Agreement terms include the license for SMX to use TOCOM prices as the last settlement price, delivery price, reference price and daily settlement price and/or final settlement price for SMX TOCOM Contracts.
Mr. Thomas McMahon, Chief Executive Officer of SMX, said: “This agreement is exciting for us for several reasons. Aside from augmenting our initial MoU and being able to roll-out contracts the markets are already familiar with, our foremost aim to develop a credible pan-Asian platform is being achieved at good speed. We are encouraged by TOCOM’s enthusiasm and foresight for a united Asian derivatives marketplace, and will be announcing more of such developments in the coming months. We must embrace exchange partnerships as crucial steps to reducing fragmentation of derivatives trading during Asian business hours.”
Mr. Tadashi Ezaki, President and Chief Executive Officer of TOCOM, said: “SMX is the up-and-coming derivatives exchange in Asia, which commenced trading in August this year and grows rapidly with an increasing range of listed products. We expect that licensing SMX to use TOCOM prices for their new products to be listed shall help increase arbitrage between TOCOM and SMX increase, and accordingly enhance the convenience of the markets. We continue to work together with SMX to further develop derivatives trading in Asia.”
The listed commodities currently trading on TOCOM include futures and options contracts for gold, and futures contracts for silver, platinum, palladium, gasoline, kerosene, gas oil, crude oil, rubber and Nikkei-TOCOM Commodity Index. SMX launched live trading on 31 August 2010 with four products consisting of Futures Contracts on crude oil benchmarks Brent Crude Oil priced in Euros and West Texas Intermediate Crude Oil, Gold with physical delivery-based settlement and Euro-US Dollar Currency Futures.
In August 2010, market leaders in low latency services in Japan and Singapore - KVH Co., Ltd. (KVH) and Singapore Telecommunications (SingTel) respectively announced provision of KVH-SingTel’s low latency network solutions to market participants, enabling both exchanges to facilitate an ultra low latency and fully redundant network service between Japan and Singapore.
* Subject to regulatory approval by the Monetary Authority of Singapore (MAS)
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About Singapore Mercantile Exchange
Singapore Mercantile Exchange is a pan-Asian multi-product commodity and currency derivatives exchange situated in Singapore. It offers a comprehensive platform for trading a diversified basket of commodities including futures and options contracts on precious metals, base metals, agriculture commodities, energy, currencies and indices.
SMX offers market participants the benefits of market transparency, time zone convenience, price discovery and benchmarking, price risk management and multiple connectivity options. Counterparty clearing and settlement risk is effectively managed through its clearing house, the Singapore Mercantile Exchange Clearing Corporation. The regulator of Singapore’s financial markets – the Monetary Authority of Singapore (MAS) – granted SMX ‘Approved Exchange’ status to operate as a regulated and fully licensed exchange since 2010.
SMX is backed by the world’s leading creator of exchanges - Financial Technologies (India) Limited - which has successfully established 10 exchanges across India, Dubai, Singapore, Africa, Mauritius and Bahrain.
SMX is a member of leading international derivatives industry associations, such as the Futures Industry Association (FIA), the Swiss Futures and Options Association (SFOA), the Association of Futures Markets (AFM) and the Futures and Options Association (FOA).
More information is available at www.smx.com.sg