Two Japanese exchanges have teamed up with global market centre operators to offer trading of a Japanese futures product to European traders and listing of a European derivatives contract in Tokyo.
The Tokyo Stock Exchange (TSE) and derivatives platform NYSE Liffe have partnered to make the TOPIX futures contract available on NYSE Liffe from 18 October. The deal means that investors will be able to trade futures based on the TOPIX index – commonly used by investors for benchmarking Japanese equity portfolios – from London as well as Tokyo. To trade TOPIX futures on NYSE Liffe, the exchange's clearing members will need to sign a link agreement with a TSE clearing member.
According to NYSE Liffe, the launch of TOPIX futures could lead to a number of new investors for these products as its market will remain open after the close of the TSE, and allow for potential arbitrage opportunities when both NYSE Liffe's and the TSE's trading hours overlap.
The contract will also be fully fungible, allowing open interest to exist in Tokyo and for NYSE Liffe TOPIX futures positions to be transferred to the TSE at the end of each day.
“This move makes the contract more readily available to a much larger community of traders and investors for a longer period of time, and will greatly contribute to making the Japanese market more attractive,” commented Atsushi Saito, CEO of the Tokyo Stock Exchange Group.
“The launch of TOPIX Futures on NYSE Liffe further meets the global needs of our investor community,” added Garry Jones, group executive vice president and head of global derivatives at NYSE Euronext. “Japan is an important part of our developing strategic partnerships in the Asia-Pacific region, and we look forward to a continuing close relationship with the TSE.”
Meanwhile, the Tokyo Financial Exchange (TFX) has signed an agreement with Deutsche Börse, which will allow the TFX to list a DAX derivatives contract on its platform. Germany's DAX index comprises the 30 largest blue-chip companies listed on Deutsche Börse's Xetra cash equities market.
The DAX derivative available to TFX members will be an exchange-traded equity index margin contract called ”Click Kabu 365'. The contract will be yen-denominated and targeted at retail investors.
“By licensing the DAX index to TFX, we are making the leading German index directly available to market participants in Asia; while at the same time we are strengthening our global presence,” said Hartmut Graf, chief executive officer at STOXX, the index business jointly owned by Deutsche Börse and SIX Swiss Exchange.