Tokyo Commodity Exchange

TOCOM : History | Membership | Types Traded | Further Reading

The Tokyo Commodity Exchange (also known as TOCOM) is not only Japan’s primary commodity exchange; it is one of the most important commodity exchanges in the world. Its main trade is in precious metals, oil and its derivatives, and rubber, though there is also some trade in non-precious metals.

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History of the Tokyo Commodity Exchange

Compared to other major commodity exchanges, TOCOM’s origins are relatively recent. While many of the other most important exchanges have their roots in the boom of the 19th century, the birth of the Tokyo Commodity Exchange can be traced to the economic reconstruction of Japan after the Second World War. As part of this reconstruction effort, the Tokyo Textile Exchange was founded in 1951 as a focus for the recovering textiles trade in Japan and the wider Far East. A year later the Tokyo Rubber Exchange was founded, with the aim of supporting the similarly recovering rubber trade.

It wasn’t until 1984, however, that the Tokyo Commodity Exchange was founded. TOCOM was formed from the amalgamation of three previously existing commodity exchanges: the aforementioned Tokyo-based rubber and textiles exchanges, and also the Tokyo Gold Exchange, itself founded only two years earlier in 1982. The latter was perhaps the most important constituent part of the new Tokyo Commodity Exchange, as the trade in precious metals became the primary focus of the new entity.

Since its inception, TOCOM has added a number of new commodities to its trading portfolio, including precious metals, non-ferrous industrial metals and crude oil and various of its derivatives. In this way, it has strengthened its position as one of the world’s premier commodity exchanges, with consistently high volumes of trade in some of the world’s key commodities.

Membership of the Tokyo Commodity Exchange

There are four levels of membership of TOCOM. These are:

  • Broker Membership: the standard class for firms of commodity brokers and traders. All members of this class may trade on their own behalf or on behalf of clients, and must be Japanese organisations.
  • Trade Membership: this class is similar to Broker Membership, but members may only trade on their own behalf: they may not conduct trades for clients. Again, members in this class must be Japanese.
  • Affiliate Membership: these members may trade through brokers licensed by TOCOM. There is no restriction on national origin for these members: non-Japanese organisations may join.
  • Associate membership: these members can only be foreign companies etc, but they must be members of an exchange that trades in the relevant commodities, or a trade association connected with that commodity. Associate members may trade through TOCOM licensed brokers.

Commodities Traded at the Tokyo Commodity Exchange

A variety of commodities are traded at the Tokyo Commodity Exchange, falling into three main classes: precious metal commodities and energy commodities. There are also other commodities traded at TOCOM outside these main classes.

The trading of rubber represents the trade from TOCOM’s precursor exchange, the Tokyo Rubber Exchange.

Further Reading

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