Published On: Sun, Dec 1st, 2013

TOCOM and Ginga Energy Japan Establish JV To Operate OTC Platform

Tadashi Ezaki CEO TOCOM

Tadashi Ezaki CEO TOCOM

The Tokyo Commodity Exchange, Inc (TOCOM) and Ginga Energy Japan Pte. Ltd, announced today the establishment of the Japan OTC Exchange (JOE). This joint venture with Ginga, a Japanese subsidiary of Singapore-based energy broker Ginga Petroleum, will focus on OTC markets for petroleum and products. The new company is capitalized at 10 million yen with the authorized capital at 25 million yen. (Ginga Energy Japan: 60%, TOCOM: 40%).

The JOE will utilize its two parent companies to provide a platform for OTC markets for petroleum commodities and related products such as freight derivatives. The market will start with swaps on gasoline, kerosene, gas oil and crude oil for fiscal 2014 (starting in April 2014 and closing at the end of March 2015).

Tadashi Ezaki, President and CEO of TOCOM commented that, “the OTC and futures markets are complimentary. An actively traded OTC market is a precondition for a successful futures market and so TOCOM’s venture into OTC trading is particularly meaningful. And currently, the Japan Commodity Clearing House (JCCH – a wholly-owned subsidiary), is preparing to launch OTC clearing services by the end of fiscal 2013 (March 31, 2014). With these two OTC-related services, the TOCOM group can facilitate OTC trading and help invigorate and improve the convenience of the futures market.”

Nobuyuki Matake, President of Ginga Energy Japan, commented that, “OTC derivatives markets cater to the wants and needs of individual trading counterparts, whereas exchange-traded futures markets serve as a standardized marketplace. Therefore the JOE will focus on tailoring a market for participants that keeps reduced cost and increased speed at the forefront. Unlike regulated exchanges, which are required to provide a market to suit all participants, OTC market providers can develop new products with minimal risk. We are hoping to extend the success of new and innovative OTC products on the JOE to the TOCOM market in the future.

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