Modification of Basic Policy on Opening of Agricultural Commodities Markets



Based upon a request from Tokyo Grain Exchange Inc. (TGE) in December 2010, TOCOM has been considering the opening of agricultural markets at TOCOM and subsequent transfer of TGE contracts onto the newly opened TOCOM markets. This has been a joint effort between TOCOM and TGE, aiming at contributing to the development of commodity futures market, in addition to increasing TOCOM's corporate value.

TGE, however, informed TOCOM of its intention to withdraw from this plan on July 11, 2011. TGE cites the followings as the reason for the withdrawal. "As for the transfer of contracts in agricultural commodities markets which is under discussion with TOCOM, TOCOM needs to apply for the opening of agricultural commodities markets, including rice, next year. However, given the current political situation and what we went through with our approval process, we believe that it would be extremely difficult for TOCOM to receive the approval within the rice's trial listing period of 2 years."

TOCOM has been preparing for the opening of agricultural commodities markets and transfer of TGE contracts in July 2012 by having discussions with TGE and conducting deliberations and adopting resolutions at TOCOM Board of Directors' meetings. TOCOM regrets to be in the situation, where we need to change the basic policy on opening of agricultural commodities markets etc., and to take back all the discussions regarding this matter.

Following the change of policy, TOCOM decided, at the Board of Directors meeting held today, to remove the "Preparing to open agricultural commodities markets" from its fiscal 2011 business plan. This amendment will neither affect any other part of the business plan, nor any quantitative targets.

The amended business plan for fiscal 2011(outline) is as follows:

TOCOM Fiscal 2011 Business Plan

I. Management Policies

In fiscal 2011, emphasis will be placed on increasing the number and diversity of TOCOM market participants, particularly overseas and retail investors. The Exchange intends to achieve this by: 1) attracting new market intermediaries (i.e., brokers); 2) strengthening cooperation with existing Broker Members; and 3) developing new investment products for retail investors. With these initiatives, TOCOM aims to put trading volume on a firm growth trend.

In addition, we will pursue further cost reductions to lower the breakeven point (in terms of trading volume) and bring our operations into profitability (at the ordinary income level on a consolidated basis).

II. Business Strategy

  1. Market participants

III. Quantitative Targets