The Tokyo Commodity Exchange is considering changes to its delivery mechanism for natural rubber futures to boost volume, a senior Tocom executive said Friday.
Tocom is considering allowing "delivery of natural rubber on a free-on-board basis in Bangkok orSingapore, as Southeast Asia is the major producing region for the commodity," Executive Officer Mitsuhiro Onosato told Dow Jones Newswires on the sidelines of an industry conference.
Currently, Tocom rubber futures contracts are deliverable only in Japan.
If allowing delivery of rubber contracts outside Japan isn't feasible, another proposal under consideration is to facilitate exchange of futures for physicals, or EFP.
Under EFP, traders can make transactions outside the trading platform and then report it to the exchange under pre-determined terms and conditions.
Onosato said EFP is already permitted, but traders find it cumbersome to use, and Tocom is looking at ways to relax the rules to boost volumes.
Tocom is also considering the revision of trading hours for rubber to suit the schedule of traders outside Japan, though technologically, it's difficult to make an exception for just one commodity, he said.
He said Tocom's overall trading volume is on the rise due to increased investor interest in precious metals.
Average traded volume in non-mini gold contracts rose 38% on month in November. He said gold now has a 65% share in Tocom's monthly trade.
Tocom's overall open interest has again increased to 300,000 contracts for the first time in more than an year.
The open interest had declined to 250,000 contracts when Tocom introduced a new trading system in May.
To attract more investors, Tocom has also reduced the contract size for the silver contract from this month.
He said Tocom plans to start a futures contract based on the Nikkei-Tocom commodity index in March next year.
The index itself is also being redesigned to exclude aluminum, and the new weightage will be introduced from Jan. 1, said Onosato. Aluminum futures were suspended last month due to a lack of liquidity.
Onosato said talks are on with the government to restart gasoil futures during the first half of next year.
The government wants to restrict the number of deliveries to avoid tax evasion in gasoil, while traders point out that this will reduce the volumes traded.
(Source: irco.biz)
No comments:
Post a Comment