Patsystems, the global supplier of electronic trading technology, has connected to the Tokyo Commodities Exchange (TOCOM) as one of the first independent software vendors (ISVs) to take advantage of the exchange’s new policy to admit ISVs. Trading began on 9 January.
Announced in July 2003, TOCOM's decision to include ISVs reflects the worldwide increase in screen-based trading and is aimed at improving liquidity in energies and precious metals in Asia-Pacific markets and promoting greater participation from traders.
In meeting the strict qualifying criteria for admission to the TOCOM ISV programme, Patsystems demonstrated extensive experience in providing connectivity to overseas exchanges and in distributing its flagship J-Trader front-end software to a global customer base.
In addition, the terms of admission require ISVs to have a subsidiary in Japan or prove that they plan to have one. Patsystems has had a Tokyo office since the beginning of 2000, which services a growing exchange and FCM customer base.
Patsystems is connecting to the market through gateway terminals provided by TOCOM and installed by members. Gold and gasoline are the principal commodities traded, and the total monthly volume for all contracts is between seven and nine million lots.
Commenting on the connection, Kevin Ashby, CEO of Patsystems, underlines the potential for market growth: "Gold and gasoline are very easy to trade on TOCOM, with many interesting arbitrage possibilities with American and European commodities contracts. The exchange has good liquidity and benefits from a single central counterparty clearing structure, created in 2003, which is an additional guarantee of creditworthiness for foreign investors. Patsystems is delighted to provide connectivity and to help open a new market to the global investment community."