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Topix futures to trade on NYSE Liffe from summer 2010

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The Tokyo Stock Exchange’s Topix futures will be listed on the NYSE Liffe market from summer 2010.

The Topix index futures contract is the benchmark Japanese stock price index already traded on the TSE.

Topix futures are actively traded by investors worldwide, who use the instrument as a way to invest in Japan’s largest stocks. Listing the contracts on NYSE Liffe will increase the number of customers who can trade the contract, and enable trading in the Topix future while the Tokyo market is closed.

The contract specifications for Topix futures traded on NYSE Liffe will be fundamentally the same as those traded on TSE. Trading hours will be set from 6am to 9pm GMT. Consequently, trading in Topix futures will now be possible for up to 19.5 hours per day, compared to seven hours at present.

Both exchanges are currently working together to establish a position transfer scheme where all Topix open positions in NYSE Liffe at the end of each day will be automatically transferred to TSE. This will give investors simpler position management. Both exchanges are now discussing about the details of this working scheme so that it can be applicable to other products in addition to Topix futures. A full scale outline will be announced as soon as plans are finalised.

Atsushi Saito (pictured), chief executive at Tokyo Stock Exchange group, says: “Listing Topix futures contract on NYSE Liffe will enable foreign investors more easily to trade futures contract based on Japanese representative index. With a background that Topix index is used by world investors as a benchmark of Japanese stock market, Topix futures market now has a good liquidity and is expanding year by year. This development will greatly contribute to make Japanese market more attractive and allow investors to trade Japanese assets more conveniently.”

Garry Jones, group executive vice president and head of global derivatives at NYSE Euronext, says: We are very pleased to announce this development, which reflects our strong relationship with TSE, and we look forward to working together further in the future. Half of volume in the Topix future already comes from foreign investors and together with TSE, we hope to boost business further by offering the contract to even more potential customers, for a greater period of the day.”

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