ExclusiveTokyo Commodity Exchange can now give Hong Kong brokers direct access to trades

The Tokyo Commodity Exchange (Tocom) has secured a licence from the Securities and Futures Commission (SFC) to let Hong Kong brokers have direct trading access to the bourse.

Takamichi Hamada, senior executive manager and chief operating officer of Tocom - which trades gold, rubber, soya bean and oil futures - said the exchange would encourage Hong Kong brokers to become remote members with direct access to its electronic trading system.

"Hong Kong is our market for expansion outside Japan, because we have seen a lot of orders come from Hong Kong brokers, who may trade for mainland and Western customers," he told the South China Morning Post in an exclusive interview.

"Since mainland Chinese are the largest consumers of commodity products, such as gold, rubber and soya beans, we believe the tie-up with Hong Kong would bring huge business opportunities for our exchange."

At present, 40 per cent of Tocom's turnover comes from overseas, with Hong Kong the largest source, accounting for 19 per cent of total turnover.

Of Tocom's international business, 47 per cent comes from Hong Kong, 24 per cent from the US, 20 per cent from Singapore and 6 per cent from Australia.

Hamada said Hong Kong brokers have had to trade through Japanese brokers in the past. But with an automated trading services licence, Tocom can now accept trades from Hong Kong-based remote members. Direct access would make trading cheaper and quicker for them.