TOCOM NEXT Contract Month Transaction Starts on May 2

4.1.2011

Tokyo Commodity Exchange, Inc. (“TOCOM” or the “Exchange”) announced that the Exchange has received approval from the Minister of Economy, Trade and Industry to amend its business rules and other concerned regulations in order to change the contract specification of Nikkei-TOCOM Commodity Index Futures. Based on this approval, the Exchange fixed on the starting date of transaction of TOCOM NEXT as Contract Month Transaction, an ordinary type of futures contract (futures contract with expiry) on May 2, 2011. The existing Contract Day Transaction (i.e: a contract without expiry), which was started on March 23, 2010, will be terminated on February 29, 2012.

With this change, the Exchange aims for improving the convenience of the index product and revitalizing its trade while setting the sufficient period of time for transition from the Contract Day Transaction to the Contract Month Transaction.

At the launch of the Contract Month Transaction on May 2, the March 2012 contract will be the only listed contract month. From December 30, 2011, which is the first trading day of the June 2012 contract, the listed contract months will always consist of two contract months.

With regard to the positions of the current Contract Day Transaction, all remaining positions will be automatically settled on February 29, 2012 against Settlement Index Point for the day.

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Contract Specification: Nikkei-TOCOM Commodity Index Futures

Contract Month Transaction (from May 2nd, 2011)(*1) Contract Day Transaction (up to February 29th, 2012)(*1)
Market TOCOM NEXT: Nikkei-TOCOM Commodity Index Market (Trial listing) Same as left
Type of Trading Index Futures Transaction (Cash-settled against the Index) (Contract Month Transaction, which has expiry date) Index Futures Transaction (Cash-settled against the Index) (Contract Day Transaction, which has no expiry dates)
Underlying Index Nikkei-TOCOM Commodity Index Same as left
Trading Method Computerized Individual Auction Same as left
Contract Months Two nearby contract months (either March, June, September or December) within a 6 month period, each contract being available to trade for 6 months (*2). -
Last Trading Day Day session on the business day preceding the last business day of the current contract month. -(*4)
Final Settlement Day The last business day of the current contract month. (All remaining positions are cash-settled against Final Settlement Index Point) -(*4)
Final Settlement Index Point (Index point used for final settlement) Index Point calculated based on opening prices of the underlying commodity futures contracts for the Day Session in accordance with the Nikkei-TOCOM Commodity Index Detailed Rules. If there are no transaction and thus no opening price either for an underlying commodity futures contract in the Day Session on the Final Settlement Day, TOCOM shall specify a price to be used to calculate the Final Settlement Index Point. (Final Settlement Index Point is calculated to the first decimal place by rounding the second decimal place.) -(*4)
First Trading Day of a New Contract Month Day Session on a business day following the Last Trading Day of the current contract month. -
Daily Settlement Index Point*(*3) Volume weighted average price (VWAP) calculated from the Execution Index Prices and traded volume for a certain time period before the end of Day Session. Index point calculated based on settlement prices of the underlying commodity futures contracts at the end of day session (3:30 p.m.), and disseminated once a day. (Settlement Index Point is calculated to the first decimal place by rounding the second decimal place.)(*4)
Trading Hours Day Session: *9:00 a.m. to 3:30 p.m. (JST) Night Session:  5:00 p.m. to 4:00 a.m. (JST) Same as left
Contract Unit JPY10,000 × Execution Index Price  (1.0 point = JPY10,000) JPY5,000 × Execution Index Price (1.0 point = JPY5,000)
Price Increment 0.1 point Same as left
Circuit Breaker Trigger Level The CB trigger level is to be set everyday at the start of a clearing period (i.e. the start of a Night Session at 5:00 p.m.) and is based on the Settlement Index Point of the previous clearing period (or the Settlement Index Point of the preceding contract month, in case of a new contract month) The CB trigger level is to be set everyday at the start of a clearing period (i.e.the start of a night session at 5:00 p.m.) and is based on the settlement index of the previous clearing period.
Margin As SPAN Margining System started from January 4, 2011, Japan Commodity Clearing House (JCCH) will set its parameters based on historical price fluctuation. Please see the website of Japan Commodity Clearing House (JCCH) for more details. Same as left
Customer Position Limit (for each long/short position) Not applicable. Same as left

*1. Trial listing (Trial listing period: up to March 23rd 2013)
*2. Except March 2012 contract whose trading period lasts more than 6 months (June 2012 contract will be generated from December 30, 2011, from which regular cycle is applied).
*3. Index point (of the underlying Index) is updated approximately every 5 minutes on TOCOM website.
*4. Contract Day Transaction will be terminated at the end of Day Session on February 29 2012, at which all remaining positions are automatically closed as they are cash-settled against the Settlement Index Point based on the underlying Index point.

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