TOCOM Amends Give-Ups
1. Give-up System Amendments
* Under the current system, Give-ups are permitted within the same clearing period. The amendment permits Give-ups are until third business day after a transaction (T+3). (“Back Date Give-up”)
* Expansions of Foreign Commodity Futures Brokers related Give-ups.
2. Background reasoning for the introduction of Back Dated Give-ups
* TOCOM’s current Give-up System allows participants to move positions from an execution broker to a designated clearing broker.The Give-up System has been mostly used by domestic funds, etc.
* However, the current Give-up System only permits the same-day give-ups. Overseas financial institutions and funds are not capable of making use of the system due to time difference, holidays, etc.
* Considering this situation, TOCOM decided to introduce a Back-Dated Give-up system to create efficiencies for market participants. Back-Dated Give-ups are allowed through third business day from date (clearing period) of a transactions. (T+3)
3. Examples of Back-Dated Give-up
* Give-up trades are permitted through third business day (T+3) from the clearing period where the transactions were executed.
* Cancellation of give-ups are allowed until third business day (T+3) fromthe clearing period where the original transactions were executed.
EX： November 7, Member A → Member B （completed Give-up）
November 10, Member Ｂ → Member Ａ（cancellation of the Give-up）
Transactions coming through multiple Foreign Commodity
Futures Brokers may be Give-up.
4. Foreign Commodity Futures Broker-Related Give-up
Under the current Give-up system, a Customer of Foreign Commodity Futures Brokers is permitted to use the Give-up system only if the Foreign Commodity Futures Broker is a direct Customer of a TOCOM Broker Member or a direct Customer of Intermediary of an Intermediary.
The amendments allow a Customer of Foreign Commodity Futures Broker to use the Give-up system, even if the Foreign Commodity Futures Broker has to go through other brokers before reaching a TOCOM Broker Member or an Intermediary.A Tri-Party Agreement is still required.
Under the current Give-up system, Give-ups are only allowed for customer transactions (Commercial-Customer → Commercial-Customer, Fund-Customer → Fund-Customer). From May 23, 2011, proprietary trades of Trade Members, Broker Members and Remote Trade Members have been permitted to do Give-ups. (Member-Customer → Proprietary, Proprietary → Member-Customer)
A Pre-registration with, and an approval from the exchange is required for Trade Members, Broker Members and Remote Trade Members who intend to conduct give-ups on proprietary or consigned transactions.