America’s CME Group and the Japan Exchange Group have launched Japanese Yen-denominated TOPIX- Tokyo Stock Price Index futures contracts to begin trading on CME Globex by Q1 2018, pending all relevant regulatory review periods.
This new financially-settled TOPIX futures contract will be listed with and subject to the rules and regulations of CME. The TOPIX is a free-float adjusted market capitalization-weighted index that is calculated based on all common stocks listed on the First Section of Tokyo Stock Exchange (TSE), the cash market of JPX, and is widely used as a benchmark by institutional investors in Japan.
The launch of this TOPIX futures contract follows the license agreement which CME Group and JPX today concluded and signed. Under the agreement, CME Group will have a worldwide exclusive license outside of Japan to the TOPIX Index for use as a reference rate in listed Japanese Yen-denominated futures and options on futures.
The addition of this TOPIX futures contract to CME Group’s existing suite of Nikkei futures including Yen- and US Dollar-denominated Nikkei 225 Index Futures, and E-mini Nikkei 225 Yen-denominated Futures, makes CME Group the only derivatives marketplace outside of Japan to offer futures contracts based on the two main Japanese indices.
CME Group has also entered into collaboration with JPX on promoting connectivity between their respective co-location facilities located in Aurora, IL and Tokyo. Both companies will engage in marketing activities to provide awareness and availability of the telecommunication providers who offer connectivity services to customers of each Exchange’s co-location facilities.
“Our collaboration with JPX on various initiatives has significantly strengthened our product and service offerings to better address and serve customer needs,” said Terry Duffy, Chairman and Chief Executive Officer, CME Group. “This new TOPIX futures contract in particular, will provide a risk management tool to international investors who are looking to participate in the growth of the Japanese economy and hedging opportunities in relation to the Japanese equity markets.”
“We look forward to a fruitful relationship in growing our markets together with CME Group through a wide range of collaborative activities with CME Group and in particular, raising the awareness of TOPIX globally, and driving the use of TOPIX as a benchmark by global investors especially in North America,” said Akira Kiyota, Group CEO, JPX. “TOPIX futures listed on Osaka Exchange (OSE), the derivatives market of JPX, is already widely used as a hedging tool by Japanese institutional investors.
With the launch of TOPIX futures on CME Globex and the promotion of connectivity services between our co-location facilities, we are confident that we will better serve the needs of international investors, helping them realize smoother and more efficient price formations on more active markets.”