Company
GuideContents■ What is TFX?·························· 2・About TFX・ Financial Derivatives Transactions andInception of TFX・Milestones at TFX・Engagement of TFX・Initiatives so far
・Future Initiatives
・Corporate Information
・Directors and Statutory Auditors
・Governance Structure
・Financial Highlights
・Trading Volume Highlights■ Interest Rate
Futures contracts at TFX(1) Listed Products··························· 7(2) Features of the Trading················· 9(3) Product Overview······················ 10・Three-month Euroyen Futures
・ Practical Use of Three-month
Euroyen Futures
・ Options on Three-month Euroyen
Futures■ FX Daily Futures contracts
at TFX(1) Listed Products························· 13(2) Trading Hours··························· 14(3) Non-Trading Day······················· 14(4) Brief Outline····························· 14(5) Features of Click 365·················· 15(6) Features of Click 365 Large········· 16■ Equity Index Daily Futurescontracts at TFX(1) Listed Products························· 17(2) Brief Outline····························· 20(3) Features of Click Kabu 365·········· 20(4) What does "with Reset Date" mean?
- settlement scheme on due date···· 22■ Clearing at TFX····················· 25(1) Clearinghouse(2) Interest Rate Futures contracts(3) Daily Futures contracts■ Trading Risk at TFX·············· 28
・Common Risks Applicable to Both
Types of contracts
・Risks of retail products
・Risk of Exchange FX Margin Contracts
・Risks of Exchange Equity Margin
Contracts■ Financial Statements············ 30■ Trading /Clearing Members················ 31■ Glossary································ 33

Introduction

This Company Guide is designed to provide the basic information about TFX. The orangemarked words in this Company Guide are explained in the Glossary at the end of thisCompany Guide.
For any questions, comments, or requests for further information, please contact the following.

Tokyo Financial Exchange Inc.
Tekko Building 8th Floor 1-8-2 Marunouchi, Chiyoda-ku, Tokyo 100-0005

General Administration Department

Tel : +81 3 4578 2400 Fax : +81 3 3212 5780
URL : https://www.tfx.co.jp/en/What is TFX ?
About TFXTokyo Financial Exchange Inc. (TFX) is a primary financial instruments exchange andclearing house in Japan which offers various products: Three-month Euroyen Futures andOptions, FX Daily Futures contracts and Equity Index Daily Futures contracts. TFX wasestablished in April 1989, as a membership organization with the capital provided by majordomestic and foreign financial institutions and started the Matching and Clearing Business
in June 1989. In April 2004, TFX was demutualized and incorporated. Our company namewas changed to the current name, Tokyo Financial Exchange in September 2007.

Financial Derivatives Transactions and Inception of TFX
A futures contract is an agreement to buy or sell the specified asset of a specific volume at
the predetermined price on a specific future date.
Due to the series of interest-rate liberalization in Japan since 1980s, great demands of riskhedge for Yen-based assets took place. To meet such demands, TFX was established in
1989 as a specialized exchange for financial derivative products.

Milestones at TFX
’89

Mar

The Financial Futures Trading Law enforced.

Apr

Tokyo International Financial Futures Exchange established.

Jun

Three-month Euroyen Futures exchange trade and clearing business started.

Feb

Fully automated computer trading system started.

Jul

Options on Three-month Euroyen futures listed.

’96

Apr

SPAN® margin system introduced.

’98

Nov

Segregation of customer funds introduced.

’99

Oct

Give-up and half-tick pricing (for Three-month Euroyen futures and Options) introduced.

’03

Apr

Strategy trades and block trades started.

’04

Apr

TFX demutualization.

’05

Jul

FX Daily Futures contracts (Click 365) listed.

’07

Feb

Trading hours for Three-month Euroyen futures and Options lengthen.

Sep

The Financial Instruments and Exchange Law enforced.
Company name was changed to Tokyo Financial Exchange.

’08

Oct

16 currency pairs were added to FX Daily Futures contracts.

’10

Nov

Equity Index Daily Futures contracts (Click kabu 365) listed.

’13

Oct

Upgraded Daily Futures contract system

’14

Feb

Launched TFX Interest-rate System2014

’19

Jul

Launched TFX Interest Rate contracts system 2019

Sep

Launched TFX Daily Futures contracts system 2019

Oct

Equity Index Daily Futures contract with Reset Date listed

’91

’20

2

Engagement of TFX① TFX, as a financial instruments exchange, establishes afinancial instruments market, provides facilities for themarket, publishes market prices, and is engaged in otheroperations related to the establishment of a financial
instruments market.
② TFX, as a clearing organization for transactions of financial
instruments, is engaged in the financial instruments
obligation assumption business associated with market
derivatives transactions carried out in the market
established by TFX.

Initiatives so far
Tokyo Financial Exchange (TFX) contributes to the sound development of the financial markets
and the economy of Japan by developing financial instruments markets as public infrastructure
related to financial instruments transactions that provide a superior degree of fairness, reliability,
and convenience in accordance with the Financial Instruments and Exchange Act.
TFX, as a comprehensive exchange for financial derivatives, has now listed products that cover
all three major sectors for financial derivatives: interest rates, foreign exchange, and stocks aslisted below.

Interest
Rate Sector
Interest Rate
Futures
contracts

Interest Rate Futures
Business

Foreign
Exchange Sector

StocksSectorClick 365
Click 365 Large

Click Kabu 365

Daily Futures Business

Future Initiatives
As a financial market infrastructure, TFX will aim to provide financial institutions with usefultools to diversify financial services and manage risks efficiently, as well as listing new
products and expanding engagement in the clearing business.

3

Corporate Information
Company NameTokyo Financial Exchange Inc.

FoundedApril 25, 1989
(In April 2004, TFX changed from a membershiporganization to a stock company)

Capital5,844,650,000 yen

Fiscal Term

From April 1 every year to March 31 of thefollowing year

Number of
Employees

83 (As of March 31, 2020)

Number of Shares
862,750
Issued andOutstanding
Number of
Shareholders

80 (As of March 31, 2020)

Major shareholder
Shares held

Shareholding
ratio (%)

MUFG Bank, Ltd.

43,130

4.99

Name

Sumitomo Mitsui Banking Corporation

43,0604.99

Mitsubishi UFJ Trust and Banking
Corporation

41,3204.78

Mizuho Bank, Ltd.

32,4003.75

Sumitomo Mitsui Trust Bank, Limited

31,320

3.63

Daiwa Securities Co. Ltd

30,6603.55

Mizuho Securities Co., Ltd.

26,937

3.12

Goldman Sachs Japan Co., Ltd.

26,320

3.05

The Shinkin Central Bank

20,6602.39

The Norinchukin Bank

20,6602.39

Mizuho Trust & Banking Co., Ltd.

20,6602.39

The Bank of Yokohama,Ltd.

20,6602.39

Organizational Chart
Board of Auditors

Statutory Auditor

General Administration Department
Finance and Accounting Department
Wholesale Business Department

Shareholder’sMeeting

Board ofDirectors

President& CEO

Retail Business Development Department
Retail Business Marketing Department
New Business Development FX Clearing
New Business Development Office
Overseas Service Office
Clearing and Settlement Department
Market Surveillance Department
System Department
Compliance and Risk Management OfficeInternal Auditing OfficeSelf-Regulatory
Committee

Self-Regulation Bureau

Expert Committee/
Discipline Committee

Advisory Committee･Nomination and Compensation Committee･Wholesale Market Operation Committee･Retail Market Operation Committee

4Directors and Statutory Auditors (As of June 25, 2020)
President & CEO

Nobuyuki Kinoshita-

Senior Managing Director

Takuo Hirota-

Director (Outside)

Takashi ImaiNIPPON STEEL CORPORATION
Company friend and Honorary Chairman (Present)

Director (Outside)

Junko Hirakawa

City-Yuwa Partners
Attorney-at-Law, Partner

Director (Outside)

Zenichi Shishido

MUSASHINO UNIVERSITY
Professor of Law

Director (Outside)

Fumihiko Ito

SUMITOMO MITSUI FINANCIAL GROUPManaging Executive Officer

Standing Statutory Auditor

Kenichiro Furukawa-

Statutory Auditor (Outside)

Yukio Ono

Accounting Standards Board of Japan
Senior Advisor

Statutory Auditor (Outside)

Hideaki Sudo

Tokyo Fuji Law Office
Attorney-at-Law, Partner

Governance Structure① The Board of Directors makes decisions on important matters regarding fundamental
management policy and business activities, and supervises the director’s performanceof duties.
② The Board of Auditors audits the director’s performance of duties, and submits an audit
report to the shareholders’ meeting in accordance with the internal control policy.
③ The Nomination and Compensation Committee deliberates on the election and dismissalof officers and remuneration for officers.
④ The Self-regulatory Committee makes decisions on self-regulatory operations to ensure
the fairness, transparency and credibility of the market, based on delegation from theBoard of Directors.

5

Corporate Organization

Company with a Board of Auditors

Number of Directors

6 Directors (Including 4 Outside Directors)

Number of Statutory Auditors

3 Statutory Auditors (including 2 Outside Statutory Auditors)

Advisory Committee

The Nomination and Compensation Committee, Market Operation Committees

Self-regulatory Committee

3 Directors (including 2 Outside Directors)

Financial Highlights
Operating Revenues

Operating Income

6,624

▲669

million yen

Net Income

Ordinary Income▲671

million yen

million yen▲1,561

million yen

Change from FY 2018

Change from FY 2018

Change from FY 2018

Change from FY 2018

0.1 %

-%

-%

-%



(Unit million yen)

(Unit million yen)

9,315
8,647

(Unit million yen)623 658573

440 514157

6,690 6,619 6,624

(Unit million yen)

195
-55

106
-159

-235
-669

-277
-671

19

18

20

17

20

16

20

20

20

15

19

18

20

17

20

16

20

15

20

20

19

18

20

17

20

16

20

20

20

15

19

18

20

17

20

16

20

20

20

15

-1,561

Trading Volume Highlights
Interest Rate Futurescontracts
FY2019(daily average)
Change fromFY 2018

Equity Index Daily Futures contracts“Click 365”

“Click Kabu 365”

28,378,235 lots

13,175,869 lots

707,951 lots
(2,938 lots)▲43.5%(108,730 lots)▲8.4%(50,632 lots)+159.2%

13,175

Trend of trading
volumes(in thousands)

FX Daily Futures contracts

41,6282,283 2,154

1,500

36,92729,083 30,973
28,378

8,454

7,708
5,493

1,253

5,083

Trading volumes of all
products(Annual total)

42,262,055 lotsYear-on-year+13.3%

19
20

18
20

17
20

16
20

15
20

19
20

18
20

17
20

16
20

15
20

19
20

18

17

20

20

16
20

20

15

707

(Daily average
162,300 lots)

6

Interest Rate Futures contracts at TFX(1) Listed Products
Options on Three-month
Euroyen Futures

Three-month Euroyen Futures
Underlying
asset

Three-month Euroyen Futures

Trading unit

¥100,000,000 (Notional principal amount)

Trading unit

One unit of Three-month
Euroyen Futures ("Euroyen
Futures") 100,000,000 (Notional
principal amount)Price
quotation

100 minus rate of interest

Price
quotation

Quoted in Euroyen Futurespoints (0.005)

Tick Size

0.005(0.005%)

Tick size

0.005

Tick Value¥1,250Tick value¥1,250Strike priceintervals

0.125

Underlying
asset

Three-month Euroyen JBA TIBOR※1

5 contract quarterly months(March, June, September,
December)Contractmonths20 quarterly months (March, June, September,
December) and 2 serial months※2

ContractmonthsLast tradingday

Two business days prior to the third Wednesdayof the contract month

Last tradingday

Two business days prior to thethird Wednesday of the contract
month

Final
settlement
day

The first business day following the last trading day

Final
settlement day

The first business day following
the last trading day

Final
settlement

Cash Settlement

Exercise style

American type

Final
settlement
price

The final settlement price is calculated to the third decimal
place.
To calculate, round up the figure on the fourth decimal
place if it is five or over and round off if it is less than five.
For example, if TIBOR is 0.12786%, the final settlement
price is 99.872(100 minus 0.128).

Trading hours(JST)

Trading hours
for thecontract on
its last
trading day(JST)

8:30 ~ 8:45
Pre-open period (Order entry without execution)

8:30 ~ 8:45
Pre-open period

8:45 ~ 11:30
Day session (Cleared as today's trade)

8:45 ~ 11:30
Day session

11:30 ~ 12:30
Restricted period (Cancel and volume cutback only)

Trading hours(JST)

11:30 ~ 12:30
Restricted period

12:30 ~ 15:30
Day session (Cleared as today's trade)

12:30 ~ 15:30
Day session

15:30 ~ 20:00
Evening session (Cleared as the next day's trade)

15:30 ~ 20:00
Evening session

8:30 ~ 8:45
Pre-open period
8:45 ~ 11:00
Day session

Trading hours
for thecontract on
its last
trading day(JST)

8:30 ~ 8:45
Pre-open period
8:45 ~ 11:00
Day session※1 : TIBOR(Tokyo InterBank Offered Rate) is determined by JBA TIBOR Administration (JBATA)※2 : Serial months are the months other than March, June, September and December.
For example, as of April 1, the serial months to be listed are April and May, as of May 1, May and July, as of June 1,
July and August.

7

Six-month Euroyen LIBOR Futures(Tradig suspended)※4

Over-Night Call Rate Futures(Trading suspended)※5Underlying
asset

Six-month Euroyen ICE LIBOR

Underlying
asset

The monthly average of
Uncollateralized Over-Night Call
Rate (Final results) released by
Bank of Japan (BOJ)

Trading unit

¥100,000,000 (Notional principal amount)

Trading unit

¥300,000,000(Notional principal amount)Price
quotation

100 minus rate of interest

Price
quotation

100 minus rate of interest

Tick size

0.0025Tick size

0.005

Tick value¥1,250Tick value¥1,250Contractmonths20 quarterly months (March, June, September, December)and 2 serial months※2

ContractmonthsFirst 6 months

Last tradingday

Two London Business days prior to the third Wednesdayof the contract month

Last tradingday

The last day of the month (theimmediately prior business day ifsuch trading day falls on a
Japanese bank holiday.)Final
settlement day

The second business day after the last trading day

Final
settlement day

The second business day
following the last trading day

Final
settlement

Cash settlement

Final
settlement
price

The final settlement price is calculated to the fourth
decimal place.
To calculate, round up the figure on the fifth decimal place
if it is five or over and round off if it is less than five.
For example, if LIBOR is 0.12786%, the final settlement
price is 99.8721(100 minus 0.1279).

Trading hours(JST)

Trading hours
for thecontract on
its last
trading day
(JST)

Final
settlement

Cash Settlement

Final
settlement
price

100 minus the monthly averageof Uncollateralized Over-Night
Call Rate (final results) in thecontract month published by
BOJ, rounded to the nearest 3rd
decimal place

8:30 ~ 8:45
Pre-open period

8:30 ~ 8:45
Pre-open

8:45 ~ 11:30
Day session

8:45 ~ 11:30
Day session

11:30 ~ 12:30
Restricted period

Trading hours(JST)

11:30 ~ 12:30
Restricted period

12:30 ~ 15:30
Day session

12:30 ~ 15:30
Day session

15:30 ~ 20:00
Evening session

15:30 ~ 20:00
Evening session

8:30 ~ 8:45
Pre-open period

8:30 ~ 8:45
Pre-open

8:45 ~ 11:30
Day session
11:30 ~ 12:30
Restricted period
12:30 ~ 15:30
Day session

Trading hours
for thecontract on
its last
trading day(JST)

8:45 ~ 11:30
Day session
11:30 ~ 12:30
Restricted period
12:30 ~ 15:30
Day session

15:30 ~ 20:00
Evening session※3※3 : During the time when Daylight Saving time is applied in the UK, the evening session ends at 19:00.
※4 : Trading of Six-month Euroyen LIBOR Futures has been suspended since the evening session of June 30th 2014.
※5 : Trading of Over-Night Call Rate Futures has been suspended since July 21st 2017.

8

(2) Features of the Trading

9

Trading Member

Trading Member is an enterprise who participates in the TFX market directly. In
order to ensure fair and efficient financial futures transactions at the TFX market,
Trading Members are required to meet financial and other membership criteriaprescribed by TFX and maintain proper credit capability. Trading Members covera broad range of financial sectors such as banks, securities companies, credit
associations, futures brokers, foreign financial institutions, representing theopenness of the TFX market.

High liquidity

All TFX products have the standardized terms in respect of trading unit, settlement
date and price indication method, etc. Such standardization facilitates participation
by many investors in the TFX market and produces high liquidity at the TFX
market.
※Liquidity may be low for some contracts and products.

Fair market price

The prices of all contracts executed at the TFX market are determined and madepublic in a fair, equitable and efficient manner. Orders are matched on the basisof the principle of “price and time priority”. Not only Trading Members but also
non-member investors can access the real-time market data, including market
depths, through information service vendors.

Clearing service

TFX acts as a counter party to each contract as a clearinghouse and undertakes
clearing of all trades at the TFX market, which ensure settlement of all suchtrades. In this way, market participants are shielded from exposure to counterparty risk.

Margin system

Margin system requires market participants to deposit cash or cash equivalents
as collateral securities with the exchange, aiming to secure trading performance.
Each Trading Members’ position is revaluated based on the daily settlement price(mark-to-market). If the margin amount then deposited by the Trading Member
becomes insufficient as a result of mark-to-market, an additional margin must be
deposited (the margin system). These procedures prevent accumulation oflosses.

Customers
protection

Under the segregation scheme, each Trading Member must segregate its
customer’s margin from the Trading Members’ own margin and deposit them with
TFX. Similarly, TFX segregates each Trading Members’ margin and its respective
customer’s margin and manages them separately.

Trading System

TFX’s trading system has a great flexibility and scalability, allowing Trading
Members to access the TFX market in diverse ways. With its sophisticatedfunctionalities, Trading Members are able to trade on the TFX market for theirvarious needs.

(3) Product Overview
Three-month Euroyen Futures
A Three-month Euroyen Futures contract is an agreement to buy or sell a specific volumeof the predetermined rate of Euroyen three-month deposit commencing on a specific futuredate. Euroyen Futures are effective tools to reduce risk of interest-rate fluctuation, by fixing
the future interest rate beforehand. The price of Euroyen Futures indicates an expectedinterest rate at the future point defined by a contract month.
For example, a price of the contract month September 20XX is indicative of Three-month
Euroyen TIBOR (Tokyo InterBank Offered Rate) rate in September 20XX.
Three-month is the most popular termof funding/deposit among financial
institutions or enterprises.

Three-month

EuroyenFutures
Predicting a future interest
rate at present.

The price for Three-month Euroyen Futures is structured as below:
100−Interest rate (%)
Therefore the following correlation is found between an interest rate and a futures price:
Euroyen Futures price fall

Interest rate rise

Bond price fall

Euroyen Futures price riseInterest rate fall

Bond price rise

ExampleWhen an interest rate of Euroyen Three-month is 0.200%,
its price will be displayed as:100−0.200=99.800

Practical Use of Three-month Euroyen Futures
As an Indicator of a Future Interest Rate
A price of Three-month Euroyen Futures can be used to estimate a trend of the interest rate.
JUN 20XX Three-month Euroyen Futures price 99.645►100−99.645=0.355%
ExampleSEP 20XX Three-month Euroyen Futures price 99.630►100−99.630=0.370%
DEC 20XX Three-month Euroyen Futures price 99.615►100−99.615=0.385%

In this case, it is expected that short-term interest rates will rise gradually for the next few
months.

10

As Risk-hedge Tool
Three-month Euroyen Futures can be used to efficiently hedge interest-rate fluctuation risk
by taking a position opposite to the existing cash position (Hedge trade).
To hedge the increase of interest rate

Bearing risk of interest rate appreciation in the future =Carrying risk of Euroyen Futures depreciation

Selling Euroyen Futures
for a hedge purpose

To hedge the decrease of interest rate

Bearing risk of interest rate depreciation in the future =Carrying risk of Euroyen Futures appreciation

ExampleBuying Euroyen Futures
for a hedge purpose

On May 1, 20XX, Company A has a plan of borrowing JPY 1 billion for threemonths, starting from June 1. Company A is afraid that an interest rate may rise
towards June 1 and intends to hedge the risk of interest-rate appreciation.

Hedging date:
May 1

Futures

Spot

Selling 10 units of Euroyen Futures(contract month: June 20XX)
at 99.750

Three-month Euroyen rate: 0.25%,
no transaction

As expected, interest rate rises 0.2% in both futures and spot.
Funding date:June 1

Buying 10 units of Euroyen Futures(contract month: June 20XX) at 99.550
Profit from Euroyen Futures:
JPY 500,000

Results
Calculation of
results

99.750 − 99.550 = 0.200
10 units×(0.200/0.005)×JPY 1,250

Three-month Euroyen rate: 0.45%
funding JPY 1 billion

OffsetIncrease of interest payable
JPY 500,000(0.45%−0.25%)×JPY 1 billion×90/360

As a result, Company A hedged the risk of interest-rate appreciation successfully by using
the Three-month Euroyen Futures.

As a Speculation
Three-month Euroyen Futures also can be used to pursue profits generated by pricefluctuation by taking a position based on the speculator’s own market perspective(Speculation).
ExampleIn December 20XX, Company B is anticipating the depreciation of Three-month
Euroyen Futures (interest-rate appreciation).
Making position

Selling 100 units ofEuroyen Futures at 99.700
As anticipated, Euroyen Futures fall(= interest rate rise)
Closing position
Buying 100 units of Euroyen Futures at
99.300 to close short position.

11

Profit99.700−99.300=0.400
100units×(0.400/0.005)×1,250=+JPY10,000,000
As a result of this speculation,
Company B successfully earned
the profit of JPY 10,000,000.

Options on Three-month Euroyen Futures
Options on Three-month Euroyen Futures are the right to enable the Option buyer to buy orsell a certain volume of Three-month Euroyen Futures contracts at a predetermined price(the“strike price”).

Structure of option trading
Option buyer
Obtaining
the right =Option seller

Option as the right

PayableOption premium

Receivable = Assuming
obligation

The option buyer obtains the right by paying option premium to the option seller, and inconsideration of the option premium, the option seller assumes the obligation to let theoption buyer exercise the right (“exercise” or “option exercise”).
The option price fluctuates based on the time remaining for the option to be exercised, strikeprice, and volatility of the underlying futures.

Calculation of option premium

JPY1,250 × (option price/0.005) × contract volume
Option Types
There are two types of option products, i.e., put options and call options.
Put : Options that give a buyer the right to sell Euroyen Futures at a strike price.
Call : Options that give a buyer the right to buy Euroyen Futures at a strike price.
Put option

OptionCall option

Buyer Entitled to exercise the right to sell at a strike price
Seller Obliged to buy at a strike priceBuyer Entitled to exercise the right to buy at a strike price
Seller Obliged to sell at a strike price

Options products provided by TFX are of American type, giving an option buyer the right toexercise anytime prior to the expiry date. An option buyer may close the option trade byreselling a position in the market, instead of option exercise, and an option seller may close
the position trade by covering a position. The buyer’s right will be exercised automaticallyat the expiry date if the option exercise would produce a profit (In The Money) on the expiry
date. On the other hand, the buyer’s right will be extinguished automatically at the expiry
date if the option exercise would produce no profit (At The Money/Out of The Money) on the
expiry date.

12

FX Daily Futures contracts at TFX(1) Listed Products
Yen Pairs

Currencypair

US Dollar, Euro, British Pound, Australian Dollar, Swiss Franc, Canadian Dollar, New Zealand Dollar,
South Africa Rand, Norwegian Krone, Swedish Krona, Hong Kong Dollar, Polish Zloty, Turkish Lira,
Mexican Peso, US Dollar(Large), Euro(Large), British Pound(Large), Australian Dollar(Large)
Cross Currency pairs
Euro/US Dollar, British Pound/US Dollar, Australian Dollar/US Dollar, New Zealand Dollar/US Dollar,
US Dollar/Canadian Dollar, British Pound/Swiss Franc, US Dollar/Swiss Franc, Euro/Swiss Franc,
Euro/Australian Dollar, British Pound/Australian Dollar, Euro/British Pound, Euro/US Dollar(Large)
Yen Pairs

Yen Pairs

Trading
Unit

Price
Quotation

US Dollar,
Euro,
British Pound,
Australian Dollar,
Swiss Franc,
Canadian Dollar,
New Zealand Dollar,
Turkish Lira,
Polish Zloty

Except Euro / US
Dollar(Large)

Cross Currency pairs
Euro/ US Dollar(Large)

10,000 currency units

100,000 currency units

Yen Pairs

Cross Currency Pairs

Yen equivalent to 1 currency

Term currency equivalent to 1 base currency

Yen Pairs

Tick Size

Cross Currency
pairsSouth Africa Rand,
Norwegian Krone,
Swedish Krona,
Hong Kong Dollar,
Mexican Peso,
US Dollar(Large),
Euro(Large),
British Pound (Large),
Australian Dollar(Large)US Dollar,
Euro,
Australian Dollar,
South Africa Rand,
Norwegian Krone,
Swedish Krona,
Hong Kong Dollar,
Mexican Peso
0.005

Yen Pairs

Yen Pairs
British Pound,
US Dollar(Large),
Swiss Franc,
Euro(Large),
Canadian Dollar,
British Pound (Large),
New Zealand Dollar,
Australian Dollar
Turkish Lira,(Large)Polish Zloty
0.01

Cross Currency pairs

0.001

0.0001

Yen Pairs

US Dollar,
Euro,
Australian Dollar

British Pound,
Swiss Franc,
Canadian Dollar,
New Zealand
Dollar,Polish Zloty,
Turkish Lira
Large currency
pairsSouth Africa Rand,
Hong Kong Dollar,
Norwegian Krone,
Swedish Krona,
Mexican Peso

¥50

¥100

¥500

Yen Pairs

Tick Value

13

Yen Pairs

Settlement

Cash Settlement

Swap Point

Single Price (¥ denominated)

Cross Currency
pairs
Except Euro /US Dollar(Large)1 termcurrency

Cross
Currency
pairsEuro/ US
Dollar(Large)10 term
currency

(2) Trading Hours(1)Yen Currency Pairs
Days of Week
MondayTuesday-Thursday
Friday<Non-period of summer time in New York>Open
7:10AM
7:55AM

Closing
Next day 6:55AM
Next day 6:00AM<The period of summer time in New York>Open
7:10AM
6:55AM

Closing
Next day 5:55AM
Next day 5:00AM(2)Cross Currency Pairs
Days of Week
MondayTuesday-Thursday
Friday<Non-period of summer time in New York>Open
7:10AM
7:55AM

Closing
Next day 6:25AM
Next day 5:30AM<The period of summer time in New York>Open
7:10AM
6:55AM

Closing
Next day 5:25AM
Next day 4:30AM※There will be a 10 minute Pre-Open period prior to the commencement of each session
except a 1 hour Pre-Open period for Yen Currency Pairs and Cross Currency Pairs on thefirst trading day of every week.
During Pre-Open, order submission is permitted yet no trades take place.
※Any change in trading hours will be announced in advance on TFX FX Daily Futurescontracts Website.

(3) Non-Trading Day
Saturday, Sunday, New Year’s day and January 2 when New Year’s day falls on Sunday.
※The Exchange may designate an ad hoc holiday for FX Daily Futures contracts when the
Exchange deems necessary to do so.

(4) Brief Outline
We can see TV report about foreign exchange transactions on a routine basis. Professionals
of foreign exchange dealers at banks or security firms are main players dealing with suchtransactions in the inter-bank market. The transactions happen in the global inter-bankmarket including Tokyo, Europe and USA beyond the time-zone difference and around theclock.
The FX Daily Futures contracts in TFX bases the above inter-bank foreign exchangetransaction. TFX introduced the contract to allow end-users such as individual investors tomake transactions in fair and transparent manner. It allows larger amount of business thandeposited margin (so called “leverage effect”). Therefore, investment efficiency is higher
compared with foreign currency deposit.

14

(5) Features of Click 365
1

Provided by the Trading Members who meet high standard of the necessary qualifications

TFX sets high standard of the necessary qualifications for Trading Members as well as
criteria under Financial Instruments and Exchange Act, etc.

2

TFX rules

FIEA,etc.

Paid-in-CapitalOver ¥300,000,000

Over ¥50,000,000

Net asset valueOver ¥2,000,000,000−

Capital-to-Risk Ratio

Over 200%

Over 120%

Margin deposit is protected by the Exchange in segregated accountTrading Members are obliged to deposit all amount of the customer margins to TFX. If
Trading Members should go bankrupt, all customer margins deposited to TFX would be
returned to investors in principle.

3

Competitive and transparent bid and offer prices are offered by Market Maker scheme

TFX provides the most competitive
price for investors among prices
offered by leading financial
institutions called Market Makers.
Not only prices but also information
on tradable volume is madeavailable to investors, which allows
for transparent trading.※1

4(Ex1.) Offered prices by Market makers

Offered Price in Click 365

Market
maker

Bid

Offer

SpreadBid

Offer

SpreadA

109.455(1,200)109.480(1,100)0.025yen

109.480(2,000)0.020yen

109.480(900)

109.460(1,700)B

109.450(1,700)0.030yenE

109.460(1,100)109.495(1,500)0.035yenF

109.460(600)

109.485(1,000)0.025yen

Swap points are fixed to be a single price, regardless of receipt and payment

Swap points are fixed to be a single price, thereby making it impossible for TFX or Trading
Members to retain a profit margin from swap points.

5

No rejection of trade or slippage

Orders are executed promptly as long as the volumes Market Makers provide. There is noworry about rejection and unnatural slippage.※2

6Reliable FX product listed on the public exchange market

TFX is a financial instruments exchange licensed to establish a financial instruments
exchange market under the FIEA. Click 365 is a reliable FX Daily Futures contracts which
has features of protection of customer margin and transparent pricing system.
※1 Not all Market Makers offer price for whole currency pairs.
※2 Before a market order reaches to the exchange, if the market price fluctuates and theorder is over a price limit which investors set, the order shall not be executed. In casean order exceeds the volumes Market Makers offer, The order might be partly executed.

15

7

Income tax treatment for trading in TFXAfter the tax system revision in the fiscal year 2005, trading in TFX have the income tax
treatment of “separate self-assessment taxation”,“carry over of loss relief over three years”
and “aggregation of profit and loss for security futures and commodity futures”.
※The tax system is subject to change over time.

(6) Features of Click 365 Large
Click 365 Large launched on November 30, 2015 to meet the trading needs of large volume
investors at home and abroad, as well as investors who are focused on tight spreads.

1

The contract size will be 10 times larger than Click 365.

2	Minimum tick size is 0.1 pip (except for EUR-USD pair), finer than the oneof Click 365 (0.5 pip), it is expected that investors will be able to trade thecontracts in a more precise manner, reflecting their market views.
3	Large unit orders can be executed (high execution capability as with Click365).
4	5 major currency pairs (USD-JPY, EUR-JPY, GBP-JPY, AUD-JPY and
EUR-JPY).

16

Equity Index Daily Futures contracts at TFX(1) Listed Products
Listed Product※

Nikkei225 Daily Futures contract with Reset Date
DJIA Daily Futures contract with Reset Date
DAX® Daily Futures contract with Reset Date
FTSE100 Daily Futures contract with Reset Date
Gold ETF Daily Futures contract with Reset DateWTI ETF Daily Futures contract with Reset Date

(Listed on October 26, 2020)(Same as above)(Same as above)(Same as above)(preparing for listing)(preparing for listing)

Listed ProductNikkei225 Daily Futures contract
with Reset Date

DJIA Daily Futures contract
with Reset Date

Trading Units
Tick Sizes
Price Quotation
Trading
Hours

Index × 100

Index × 10 yen※1

1 yen (100yen)

1 point (10yen)※1

Yen equivalent to 1 contract
Opening※2
Standard Time/NY,U.S.A.
Summer Time/NY,U.S.A.

※3

8:30AM

Closing
Next day 6:00AM
Next day 5:00AM

Non-Trading Day

Saturday, Sunday, New Year’s Day and 1. Saturday, Sunday, and holidays of US
January 2 When New Year’s Day falls on
DJIA Futures market
Sunday2. Day(s) which falls on between Last Trading
Day and Reset Date. (Only applicable tocontracts held unsettled till the end of Last
Trading Day.)

First Trading Day

The trading day immediately following the Second Friday of September (Monday in principle)

Last Trading Day

The trading day immediately preceding Reset The trading day immediately preceding the
Date
Third Friday of December of the following
year of the contract commencement

Reset Date

The second Friday of December of the The trading day immediately following thefollowing year of the contract commencement Third Friday of December of the following
year of the contract commencement

Reset Price

Interest

Reset Price is the final settlement price by which outstanding position held unsettled on the
Reset Date is settled.
The final settlement price of exchange-traded future of the equivalent underlying (December
contract of the year Reset is made) rounded to the nearest whole number
Settlement Price ×100 ×Japanese Yen Interest Settlement Price ×100 ×Foreign Currency
Rate × Days / 365
Interest Rate × Days / 365
Buyer pays / Seller receives

17

Dividend

Buyer receives / Seller pays

Settlement

Cash Settlement(￥)
Outstanding position not offset by the last trading day will be settled at “Reset Price”

DAX® Daily Futures contract
with Reset Date

Listed ProductTrading Units

Index × 100 yen

Tick Sizes

1 point (100yen)

Price Quotation

FTSE100 Daily Futures contract
with Reset Date

Yen equivalent to 1 contract
Closing

Opening※2

Trading
Hours

Standard Time/NY,U.S.A.&
Standard Time/Europe

DAX® 4:00PM
FTSE
5:00PM
Summer Time/NY,U.S.A.※3 &Standard Time/Europe
Summer Time/NY,U.S.A.※3 & DAX® 3:00PM
FTSE 4:00PM
Summer Time/Europe※4

Next day 6:00AM

Next day 5:00AM

Non-Trading Day

1. Saturday, Sunday, and holidays of the exchanges that list stocks comprising the indexesof each contract
2. Day(s) which falls on between Last Trading Day and Reset Date. (Only applicable tocontracts held unsettled till the end of Last Trading Day.)

First Trading Day

The trading day immediately following the Second Friday of September (Monday in principle)

Last Trading Day

The trading day immediately preceding the Third Friday of December of the following year of
the contract commencement

Reset Date

The trading day immediately following the Third Friday of December of the following year of
the contract commencement

Reset Price

Interest

Reset Price is the final settlement price by which outstanding position held unsettled on the
Reset Date is settled.
The final settlement price of exchange-traded future of the equivalent underlying (December
contract of the year Reset is made) rounded to the nearest whole number
Settlement Price ×100 ×Foreign Currency Interest Rate × Days / 365
Buyer pays / Seller receives

Dividend

None

Settlement

Cash Settlement(￥)
Outstanding position not offset by the last trading day will be settled at “Reset Price”

Buyer receives / Seller pays

※2. There will be a 10 minute Pre-Open period prior to the commencement of each session, except for Nikkei 225
Daily Futures contract with Reset Date and DJIA Daily Futures contract with Reset Date which set aside a 30
minute Pre-Open period every Monday prior to the commencement of each session. (During Pre-Open period,
only order submission is permitted but order matching is not.)※3. Summer time/NY,U.S.A. refers to the period of time from the second Sunday of March to the First Sunday of
November.
※4. Summer Time/Europe refers to the period of time from the last Sunday of March to the last Sunday of October.
Trading hours are subject to change according to market holidays, etc. Any change in trading hours will beannounced in advance on TFX Website.

18

Listed ProductGold ETF Daily Futures contract with
Reset Date (preparing for listing)Trading Units

ETF price × 100 yen

Tick Sizes
Trading
Hours

WTI ETF Daily Futures contract with
Reset Date (preparing for listing)1 yen (100yen)
Closing

Opening※5
Standard Time/NY,U.S.A.
Summer Time/NY,U.S.A.

※6

9:00AM

Next day 6:00AM
Next day 5:00AM

Non-Trading Day

1. 
Saturday, Sunday, New Year’s Day and 1. Saturday, Sunday, New Year’s Day andJanuary 2 When New Year’s Day falls on
January 2 When New Year’s Day falls on
SundaySunday2. Exchange holiday of the major US gold 2. 
Exchange holiday of the major US WTI
futures market
Crude Oil futures market
3. Day(s) which falls on between Last Trading 3. Day(s) which falls on between Last Trading
Day and Reset Date. (Only applicable to
Day and Reset Date. (Only applicable tocontracts held unsettled till the end of Last
contracts held unsettled till the end of Last
Trading Day.)
Trading Day.)

First Trading Day

The trading day immediately following the Second Friday of September (Monday in principle)

Last Trading Day

The trading day immediately preceding the Third Friday of December of the following year of
the contract commencement

Reset Date

The trading day immediately following the Third Friday of December of the following year of
the contract commencement

Reset Price

Interest

Reset Price is the final settlement price by which outstanding position held unsettled on the
Reset Date is settled.
Net Asset Value (per Unit of the ETF of the equivalent underlying) of the third Friday ofDecemberSettlement Price ×100 ×JBA Euroyen TIBOR 12Month × Days / 365
Buyer pays / Seller receives

Dividend

None

Settlement

Cash Settlement(￥)
Outstanding position not offset by the last trading day will be settled at “Reset Price”※5. There will be a 10 minute Pre-Open period prior to the commencement of each session, except for Pre-Open
period on Monday when 30 minutes are set aside for Pre-Open period prior to the commencement of eachsession.(During Pre-Open period, only order submission is permitted, but order matching is not.)※6. Summer time/NY,U.S.A. refers to the period of time from the second Sunday of March to the First Sunday of
November.
Trading hours are subject to change according to market holidays, etc. Any change in trading hours will beannounced in advance on TFX Website.

19

(2) Brief Outline
Since its listing in 2005, Click 365 (FX Daily Futures contracts) has steadily grown andestablished solid populatiry among domestic retail investors. To follow this success andexpand investors’ choices and opportunities, TFX introduced Click Kabu 365 (Equity Index
Daily Futures) in November 2010. With this listing, TFX has made epochs with such userconvenience as allowing investors to trade overseas equity indices in contract prices
denominated in yen almost round the clock for Nikkei 225 and DJIA contracts.

(3) Features of Click Kabu 365
1

Tradable for almost 24 hours including holiday ※1

Click Kabu 365 investors can enter Nikkei 225 and DJIA Daily Futures contracats at nearly
any time of the day. Even at night and on national holidays when Japanese markets areclosed, investors can monitor movements of Nikkei 225 prices caused by news and eventsin major overseas equity markets, and can trade in real time without missing opportunities.

2

Dividends to be paid (same as cash stocks) ※2

Click Kabu 365 investors who have long positions can receive dividents, similarly as cash
stock holders receive dividends (In the case of short positions, investors have to pay
dividends).

3

Leverage transactions by depositing margin as collateral ※3

The leverage effect allows investors to trade large amounts with the margin dposited ascollateral.
【Example】When the price of the Nikkei 225 is at 20,000 yen, an investor deposits 100,000
yen as margin and purchases one trading unit of Nikkei225 Daily Futurescontract with Reset Date.
(Required margin amount ※)100,000 yen(price of the Nikkei 225 )⇒20,000 yen(1 trading unit)×(Transaction amount)＝

100 yen

2,000,000 yen

Leverage is 20 times※ Required amount may vary depending on the financial instruments business operator of your choice.

As shown in the table below, you can expect amplified profits due to positive leverage
effect (if the market moves to your advantage), but you should be aware that you may incur
amplified losses if the market moves to your disadvantages.
(yen)Transaction amount at the time of purchase
Nikkei 225 Price at saleTransaction amount at sale
Profit and Loss (excluding fees, taxes, etc.)

2,000,000
19,60019,80020,00020,20020,4001,960,000

1,980,000

2,000,000

2,020,000

2,040,000-40,000-20,000

0

20,00040,00020

4Going short (SELL) as well as long (BUY)

In Click Kabu 365, you can enter the market not only from buying but also from selling. You
can get profits not only in the rising phase of the price but also in the falling phase.

5

Trading overseas equity indices without currency risk

Click Kabu 365 offers investors the opportunity to not only trade on the Nikke 225, but also
on other major global indices such as DJIA (USA), FTSE 100 (UK), and DAX® (Germany).
Those overseas equity indices in contract prices denominated in yen (the conversion rate is
fixed at 100 yen), domestic investors basically funding in yen are free from the currency rate
movement risk.
※1 Non trading days: Saturdays, Sundays, and January 1 (and January 2, if January 1 falls on Sunday). Extra
days will be added as necessary.
※2 TFX calculates dividend based on expected dividend. Investors who have long positions pay interests. The
amount of the interest may exceed the dividend. There is no shareholder benefit except dividend. There is no
dividend on DAX®

21

(4) 
What does “with Reset Date” mean? -settlement
scheme on due date
What does the “Reset” mean?
Reset means once-a-year settlement of outstanding position at Reset Price that is equivalent
to the underlying asset’s price.
Settlement is made at Reset Price (final settlement price for Click Kabu 365) for outstanding
positions left unsettled until the Last Trading Day in December every year.

Schedule in summary: start and end (reset) of trading Click Kabu 365
Reset in Dec 202X▼

Contract due in 202X

15 months
Overlapped Period
3 months

Reset in Dec 202Y▼

15 months

Contract due in 202Y▲
Start in Sep 202X

Overlapped Period
3 months

Reset in Dec 202Z▼

15 months

Contract due in 202Z▲
Start in Sep 202Y

Note: “First Trading Day” , “Last Trading Day” and “Reset Date”
For Click Kabu 365, the First Trading Day means a trading day on which trading of a contract
with a new Reset Date is commenced. On Reset Date, positions unsettled or rolled-overuntil then are settled. The Last Trading Day is set on a trading day immediately preceding
the Reset Date.
DJIA, DAX®, FTSE100, Gold ETF,
WTI ETF Daily Futures

Nikkei 225 Daily Futures

First Trading Day

The trading day immediately following the Second Friday of September (Monday in principle)

Last Trading Day

The trading day immediately preceding the
The trading day immediately preceding ResetThird Friday of December of the following year
Dateof the contract commencement

Reset Date

The trading day immediately following the
The second Friday of December of the following
Third Friday of December of the following year
year of the contract commencementof the contract commencement

What does “Reset Price” mean?
Reset Price is the final settlement price by which outstanding position held unsettled on the
Reset Date is setlled.
Reset Price

Equity Index

The final settlement price of exchange-traded future of the equivalent undelying (December
contract of the year Reset is made) rounded to the nearest whole number

ETF

Net Asset Value (per Unit of the ETF of the equivalent underlying) of the third Friday ofDecember

22

The Nikkei Stock Average is a copyrighted index calculated by a method independently developed by Nikkei Inc.
Nikkei Inc holds the copyright, the intellectual property rights, and all other rights associated with the Nikkei Stock
Average itself and the method of calculating Nikkei Stock Average. Business of Equity Index Daily Futures contracts,
the underlying assets of which are the Nikkei Stock Average (“Nikkei 225 Daily Futures contracts with Reset Date”),
and the enforcement of trading regulations for such contracts shall be managed under the responsibilities of Tokyo
Financial Exchange Inc. (“TFX”) and its Trading Members, and Nikkei Inc shall not assume any obligations or
responsibilities thereof. In operating Nikkei 225 Daily Futures contracts with Reset Date, TFX is responsible forcalculating and publishing the ex-dividend prices of stocks used in the Nikkei Stock Average, which are required for
Nikkei 225 Daily Futures contracts with Reset Date. Nikkei Inc has the right to change component stocks in the Nikkei
Stock Average, the method of calculation, and other details of the Nikkei Stock Average, and to discontinue thepublication of the Nikkei Stock Average. Nikkei Inc shall not be obligated to continuously publish the Nikkei Stock
Average, and shall not be liable for any errors, delay or discontinuation of publication.
DAX® is a registered trademark of Qontigo Index GmbH, part of Deutsche Börse Group.
This financial instrument is neither sponsored nor promoted, distributed or in any other manner supported by Qontigo
Index GmbH and Deutsche Börse Group (collectively, the “Licensor”). The Licensor does not give any explicit or
implicit warranty or representation, neither regarding the results deriving from the use of the Index and/or the Index
Trademark nor regarding the Index value at a certain point in time or on a certain date nor in any other respect. The
Index is calculated and published by the Licensor. Nevertheless, as far as admissible under statutory law the Licensor
will not be liable vis-à-vis third parties for errors in the Index. Moreover, there is no obligation for the Licensor vis-à-vis
third parties, including investors, to point out potential in the Index Neither the publication of the Index by the Licensor
nor the granting of a license regarding the Index as well as the Index Trademark for the utilization in connection withthe financial instrument or other securities or financial products, which derived from the Index, represents a
recommendation by the Licensor for a capital investment or contains in any manner a warranty or opinion by the
Licensor with respect to the attractiveness on an investment in this product. In its capacity as sole owner of all rights
to the Index and the Index Trademark the Licensor has solely licensed to the issuer of the financial instrument theutilization of the Index and the Index Trademark as well as any reference to the Index and the Index Trademark inconnection with the financial instrument.
The FTSE100 Daily Futures contract with Reset Date is not in any way sponsored, endorsed, sold or promoted by
FTSE International Limited (“FTSE”) or the London Stock Exchange Group companies (“LSEG”) (together the“Licensor Parties”) and none of the Licensor Parties make any claim, prediction, warranty or representation whatsoever,expressly or impliedly, either as to (i) the results to be obtained from the use of the FTSE100 (the “Index”) (upon which
the FTSE100 Daily Futures contract with Reset Date is based), (ii) the figure at which the Index is said to stand at any
particular time on any particular day or otherwise, or (iii) the suitability of the Index for the purpose to which it is being
put in connection with the FTSE100 Daily Futures contract with Reset Date. None of the Licensor Parties haveprovided or will provide any financial or investment advice or recommendation in relation to the Index to Tokyo
Financial Exchange Inc. or to its clients. The Index is calculated by FTSE or its agent. None of the Licensor Parties
shall be (a) liable (whether in negligence or otherwise) to any person for any error in the Index or (b) under any
obligation to advise any person of any error therein.
All rights in the Index vest in FTSE. “FTSE®” is a trade mark of LSEG and is used by FTSE under licence”.
The “Dow Jones Industrial Average” is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and Dow
Jones Trademark Holdings, LLC, and has been licensed for use by TFX. Standard & Poor’s® and S&P® are registeredtrademarks of Standard & Poor’s Financial Services LLC (“S&P”) and Dow Jones® is a registered trademark of Dow
Jones Trademark Holdings, LLC (“Dow Jones”). DJIA®, The Dow®, Dow Jones® and Dow Jones Industrial Average aretrademarks of Dow Jones Trademark Holdings, LLC. The trademarks have been licensed to SPDJI and have been
sublicensed for use for certain purposes by TFX. DJIA Daily Futures contract with Reset Date is not sponsored,
endorsed, sold or promoted by SPDJI, Dow Jones, S&P, any of their respective affiliates (collectively, “S&P Dow Jones
Indices”) or Dow Jones Trademark Holdings, LLC. Neither S&P Dow Jones Indices nor Dow Jones Trademark
Holdings, LLC make any representation or warranty, express or implied, to the owners of the DJIA Daily Futurescontract with Reset Date or any member of the public regarding the advisability of investing in securities generally or
in DJIA Daily Futures contract with Reset Date particularly or the ability of the Dow Jones Industrial Average to track
general market performance. S&P Dow Jones Indices and Dow Jones Trademark Holdings, LLC only relationship to
TFX with respect to the Dow Jones Industrial Average is the licensing of the Index and certain trademarks, service
marks and/or trade names of S&P Dow Jones Indices and/or its licensors. The Dow Jones Industrial Average isdetermined, composed and calculated by S&P Dow Jones Indices or Dow Jones Trademark Holdings, LLC without
regard to TFX or the DJIA Daily Futures contract with Reset Date. S&P Dow Jones Indices and Dow Jones Trademark
Holdings, LLC have no obligation to take the needs of TFX or the owners of DJIA Daily Futures contract with Reset
Date into consideration in determining, composing or calculating the Dow Jones Industrial Average. Neither S&P Dow
Jones Indices nor Dow Jones Trademark Holdings, LLC are responsible for and have not participated in thedetermination of the prices, and amount of DJIA Daily Futures contract with Reset Date or the timing of the issuanceor sale of DJIA Daily Futures contract with Reset Date or in the determination or calculation of the equation by which
DJIA Daily Futures contract with Reset Date is to be converted into cash, surrendered or redeemed, as the case may
be. S&P Dow Jones Indices and Dow Jones Trademark Holdings, LLC have no obligation or liability in connection withthe administration, marketing or trading of DJIA Daily Futures contract with Reset Date. There is no assurance thatinvestment products based on the Dow Jones Industrial Average will accurately track index performance or provide
positive investment returns. S&P Dow Jones Indices LLC is not an investment advisor. Inclusion of a security within
an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, nor is it considered to
be investment advice.

23

NEITHER S&P DOW JONES INDICES NOR DOW JONES TRADEMARK HOLDINGS, LLC GUARANTEES THE
ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE DOW JONES INDUSTRIALAVERAGE OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO,
ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT
THERETO. S&P DOW JONES INDICES AND DOW JONES TRADEMARK HOLDINGS, LLC SHALL NOT BE
SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW
JONES INDICES AND DOW JONES TRADEMARK HOLDINGS, LLC MAKES NO EXPRESS OR IMPLIEDWARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY TFX, OWNERS OF THE DJIA DAILYFUTURES CONTRACT WITH RESET DATE, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE
DOW JONES INDUSTRIAL AVERAGE OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES OR DOW
JONES TRADEMARK HOLDINGS, LLC BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR
CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST
TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES,WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY
BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND TFX,OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.

24

Clearing at TFX(1) Clearinghouse
A clearinghouse interposes itself between counterparties to all contracts traded at TFX
market, becoming the buyer to every seller and the seller to every buyer, and thereby
ensuring the performance of open contracts.
Market participants hereby can trade without worrying about counterparty’s credit risk. TFX
has a function of clearinghouse, and ensures the credibility of TFX market.
Buyer

TFX

(Seller)Member A

Seller(Buyer)Member B

There is no debt and credits between Trading Member A and Trading Member B.
In Daily Futures contracts, either Buyer or Seller should be a Market Maker. The Other side should be a
Trading Member(2) Interest Rate Futures contracts
Margin System
Interest Rate Futures transactions are usually liquidated by cash settlement. To ensure
such liquidation, market participants are required to deposit cash or cash equivalents with
TFX as margin. Mark-to-market is daily revaluation of futures positions of each market
participant, using daily settlement prices, to determine and settle profits or losses on a dayto-day basis. If there arises deficiency in the margin actually deposited as a result of markto-market, an additional margin will be collected.
For calculation of margin amounts, TFX adopts SPAN®, standing for Standard Portfolio
Analysis of Risk (SPAN), developed by CME (Chicago Mercantile Exchange Inc.) in the US.
In the method of SPAN®, margin amount is calculated based on each market participant’s
position, i.e., the risk inherent in the overall portfolio of that market participant. SPAN® isadopted by leading exchanges worldwide.
※SPAN® used herein is a registered trademark of Chicago Mercantile Exchange Inc. and used herein underlicense. Chicago Mercantile Exchange Inc. assumes no liability in connection with the use of SPAN® by any
person or entity.

25

Segregation of Customer Funds
TFX adopts a segregation scheme of customer funds for protection of customers. Under
this scheme, each Trading Member deposits its customers’ margins with TFX, separatelyfrom the Trading Member’s own margin. On this basis, TFX takes custody of each Trading
Member’s customers’ margins and Trading Member’s proprietary margins separately. This
scheme is applied to protect margins of a trading member’s customers from the default ofthat trading member.

[House account]
Margin of Trading Member X

House account

TFX[Customer account]
Margin of Customer A & B

Trading Member X
Customer A

Customer B

Give-Up
Give-up is a mechanism that a certain Interest Rate Futures contract is executed by one
Trading Member and clearing (including handling of margins and profit/loss) of the said
contract is undertaken by another Trading Member.
A Trading Member who is instructed by a customer to execute a contract for give-up iscalled an Executing Member, and a Trading Member who is instructed by the customer toclear and settle the contract is called a Carrying Member. By utilizing give-up, a customer
can concentrate clearing of its contracts to a specific Trading Member, assign execution andclearing functions to the different members respectively, or diversify its positions to multiple
members.

TFX
Order andexecution

Member A(Executing Member)

Instruction of
execution

Clearing
operations

Give-up

Customer C

Member B(Carrying Member)

Instruction ofclearing26

(3) Daily Futures contracts
Margin System
The TFX Daily Futures contracts are usually liquidated by cash settlement. To ensure suchliquidation, Trading Members or their customers are required to deposit cash with TFX as
margin.
Margin-Required Amount for the TFX Daily Futures contract is calculated as follows: “Theamount necessary to keep open interest of one unit (set by TFX)”× open interest of the client± P/L from transaction ± swap points. In addition, Trading Members are able to request theircustomers to deposit margin for orders before their customers make order instructions.

Segregation of Customer Funds
TFX adopts a segregation scheme of customer funds for protection of customers. Under
this scheme, each Trading Member deposits its customers’ margins with TFX. TFX
administers the margin balance etc. for each ID which is granted to each customer by TFX.
[House account]
Margin of
Trading Member X

TFXHouse accountTrading Member X[Customer account]
Margin of Customer A (ID)Margin of Customer B (ID)

Customer A

27

Customer B

Trading Risk at TFXCommon Risks Applicable to Both Types of Contracts
Price Fluctuation Risk
Fluctuations in interest rates, currency rates, prices of equity indices or prices of ETFs
related to gold or crude oil may cause a loss. Since the transaction amount is much larger
than the deposited exchange margin, these fluctuations may cause a loss exceeding thedeposited exchange margin, depending on market conditions. Click kabu 365 prices also do
not reflect the actual prices of equity index or ETF. The difference in these two prices can
expand due to factors such as supply and demand balance and market conditions. Therefore,
investors may incur losses when they are unable to trade contracts at prices they expect
based on actual prices of equity index or ETF.
Credit Risk
TFX has introduced the clearing system under which it acts as a counterparty to a TFX
Trading Member in each contract and TFX segregates all exchange margins deposited by
Customer; therefore, all deposited margins are in principle protected. Provided, however,that non-payments by a TFX Trading Member etc., due to changes in credit status or
bankruptcy by a TFX Trading Member etc., may cause delays in completing refund
procedures or unexpected loss.
System Failure Risk
If a failure occurs in the system of TFX or a TFX Trading Member, or network system among
Customers, TFX Trading Members and TFX, delivery of market information, etc, placementof order or execution thereof may be delayed or become impossible, and as a result, an
unexpected loss may be caused.
Risks of changes in tax systems, laws, etc.
Changes in tax systems, laws or their future interpretation may cause unfavorable results.

Risks of retail productsInterest Rate Fluctuation Risk
Fluctuations in the interest rate of Japanese currency or foreign currency in relation to Click
365 or Click Kabu 365 may decrease the swap point of Click 365 or the interest of Click
Kabu 365 to be received, or increase the same to be paid. With Click 365, if the interest ratelevels of two countries comprising a position are reversed, the party holding the position toreceive swap points may be required to make payments under such transaction. As tocertain currency underlying the relevant transaction, various factors such as correlation
between supply and demand of such currency in the foreign exchange market may also
increase or decrease swap points or may cause the reversal of receipt or payment of swap
points, notwithstanding the fluctuation of interest rates. There could even be a case where
an investor has a long position in a currency with a higher interest rate but is required to pay
swap points.

28

Liquidity Risk
Click 365 and Click kabu 365 introduced the Market-Making Method for Exchange FX
Margin contracts, in which Market Maker offers ask and bid prices at which Customers may
execute a transaction. It may become difficult or impossible for Market Maker to provide theask and bid prices in a stable and sustainable manner, depending on certain conditions
such as acts of God, war, political change, change in legislation, in foreign exchange policies
or in laws and rules of the relevant country, system changes at the exchanges on which theissues that comprise the relevant equity indices are listed, restrictions on trading of futurescontracts whose underlying assets are relevant equity indices, change in policies or in laws
and rules on commodity market, etc. of the relevant country, system changes or restrictions
on trading at the exchanges on which ETFs are listed, restrictions on trading of commodity
futures contracts related to ETFs, delay or suspension in the distribution of information, or
sharp fluctuations in the currency market, etc., and as a result, Customers may not be able
to trade at expected prices and suffer an unexpected loss therefrom.
Transactions involving a certain currency in Click 365 may not regularly be traded on a dayon which the market in a country of such currency is closed for business. Further, tradingof transactions involving certain currency pairs may become impossible, where any abnormal
circumstances occur, such as where foreign exchanges adopt certain measures or policies
or where the relevant country implements restrictions for the cessation of currency exchanges
or closure of foreign exchange markets.
In addition, even under normal conditions, transactions in the currencies or equity indices or
ETFs with lower liquidity may cause a loss to Customer due to causes such that Customer
is not able to execute a transaction at the desired price.

Risk of Exchange FX Margin Contracts
Currency Conversion Risk
Since Cross Currency Pairs transaction (foreign currency pairs trading) is not settled in therelevant foreign currency but in Japanese Yen, it entails an exchange rate risk not only
against the relevant foreign currency but also against Japanese Yen at the time of settlement(the “Currency Conversion Risk”).

Risks of Exchange Equity Margin Contracts
Foreign Exchange Risk
When trading overseas equity index margin contracts, Equity Index Margin Customer does
not carry foreign exchange risks. However, Equity Index Market Maker takes into accountforeign exchange risks when providing bids and offers and as a result, the spreads may
become large in accordance with the foreign exchange market conditions and Equity Index
Margin Customer may not be able to trade at prices they expect and subsequently incur an
unexpected loss.
Risks related to forecast of dividends
TFX calculates the dividend amount as the theoretical amount that will impact the equity
index in the future based on the forecast of dividends as of the last cum-rights date. The
amount equivalent to the dividends calculated by TFX is resultantly different from that
calculated based on actual dividend payments, or forecast of dividends or actual dividends
for the actual shares that comprise the index.

29

Financial Statements[ Income Statement (Summary) ][ Blance Sheet (Summary) ](in million yen, rounded off to milions)(in million yen, rounded off to milions)

Account Titles

FY 2018
As ofMarch 31,2019

FY 2019
As ofMarch 31,
2020

6,619

6,624

136

134

Operating Revenues
Fixed amount exchange fees
Per-contract exchange fees

5,968

FY 2018
As ofMarch 31,2019

FY 2019
As ofMarch 31,2020

17,37318,065FY 2018
As ofMarch 31,2019

Account Titles

FY 2019
As ofMarch 31,2020

(Liabilities)(Assets)
Current Assets

Current Liabilities

706

1,384

476

1,027
170

6,007

Cash and bank deposits

7,731

6,832

Accounts payable - trade162

Accounts receivable - trade

576

1,580

Accounts payable - other

119

Income taxes payable26

34

Consumption taxes payable24

97Income related to systemequipment

190

Other exchange fees

31

27

M
 ember registration feesand others

6

12

Income from information
services

254

251

Income from management ofspecified funds

32

29

6,854

7,293

Operating Expenses

Account Titles

Securities

9,000

9,600

Accounts receivable - other11

12

Prepaid expenses

54

39

OthersNon-current Assets
Tangible fixed assets

00514,968

543,030

1,132

492

OthersNon-current LiabilitiesD eposits received frommembers
Others58

53

510,329

540,097509,760

539,496

569

601

511,036

541,481

Shareholders' Equity

21,305

19,614

Common stock

5,844

5,844

Capital surplus

6,045

6,045

S
 elling, general andadministrative expenses

6,854

7,293

Buildings

403-

Operating Income/Operating
Loss (▲)

▲ 235

▲ 669

Furniture and equipment

138

492

Non-operating Revenues

85

8Construction in progress589-

Non-operating Expenses

9

10

3,734

2,912

Ordinary Income/Ordinary
Loss (▲)

▲ 159

▲ 671

299

2,911

9,415

7,723

3,425

-

D
 efault compensation
reserve

2,800

2,600

R
 etained earnings brought
forward

6,615

5,123

-

-

Extraordinary Income/Extraordinary Loss (▲)
Income before income taxes/
Loss before income taxes (▲)

-

▲ 792

▲ 159

▲ 1,463

Income taxes - current

4

3

Income taxes - deferred

113

94

Net Income/Net Loss (▲)▲ 277▲ 1,561

Intangible fixed assets
SoftwareS oftware development inprogress

81

Investment and other assets

Others341

129 ssets held for gurantee fromA
members

509,760

539,496

Total Assets

532,342561,096

Total Liabilities(Net Assets)

Retained earnings

Valuation/Translation
Adjustments
Total Net Assets

21,305

19,614

Total Liabilities and Net Assets

532,342561,096[ Statement of Changes in Net Assets Fiscal Year 2019 (from April 1, 2019 to March 31, 2020) ](in million yen, rounded off to milions)Shareholder's Equity
Capital surplus

Retained earnings
Other retained earnings

Commonstock

Balance as of April 1, 2019

5,844

Capitalreserve

Total
capitalsurplus

6,045

6,045

Default
Default
compensation compensation
reserve forreserve forInterest Rate Daily
Futures
Futures
contracts
contracts

800

Total
shareholder'sequityTotal
retainedearnings

Retainedearnings
brought
forward

Total net
assets

2,000

6,615

9,415

21,30521,305

Changes during the term
Dividend paid

-

-

-

-

-

129

129

129

129

-

-

-

-

200

200

-

-

-

Net Income

-

-

-

-

-

1,561

1,561

1,561

1,561

 he amount changed during the termT
except shareholders' equity item

-

-

-

-

-

-

-

-

-

D
 efault compensation reserve withdrawn

Total amount changed during the term
Balance as of March 31, 2020

-

-

-

-

200

1,491

1,691

1,691

1,691

5,844

6,045

6,045

800

1,800

5,123

7,723

19,614

19,61430

Trading / Clearing Members(As of March 1. 2021)

Trading Member

Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation
Resona Bank, Ltd.

Interest Rate Futurescontracts

Market Trading/Clearing Market
Trading Clearing
Inactive Trading/Clearing
MemberMemberMaker
Maker
Member Member

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SBI Sumishin Net Bank, Ltd.
The Chiba Bank, Ltd.
The Bank of Yokohama, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Sumitomo Mitsui Trust Bank, Limited.
Aozora Bank, Ltd.
Barclays Bank PLC
COMMERZBANK AKTIENGELLSCHAFTUBS Securities Japan Co., Ltd.
Credit Agricole Securities Asia B.V.
JPMorgan Securities Japan Co., Ltd.
Goldman Sachs Japan Co., Ltd.
Deutsche Securities Inc.
BofA Securities Japan Co.,Ltd.
Daiwa Securities Co., Ltd.
Barclays Securities Japan Limited
Shinkin Central BankThe Shoko Chukin Bank, Ltd.
The Norinchukin BankINVAST Securities Co.,Ltd.
Okayasu Shoji Co., Ltd.
YUTAKA TRUSTY SECURITIES CO.,LTD.
AI GOLD SECURITIES CO., LTD.
Gaitame Online Co.,Ltd.
Fujitomi Co., Ltd.
GMO CLICK Securities, Inc.
IwaiCosmo Securities Co.,Ltd.
Okasan Online Securities Co., Ltd.
au Kabucom Securities Co., Ltd.
Monex, Inc
KOYO Securities Co., Ltd.

31

FX Daily Futures contracts Equity Index Daily Futures
Click 365
contracts Click Kabu 365

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Trading Member

Interest Rate Futurescontracts

FX Daily Futures contracts Equity Index Daily Futures
Click 365
contracts Click Kabu 365

Market Trading/Clearing Market
Trading Clearing
Inactive Trading/Clearing
MemberMemberMaker
Maker
Member Member

MONEY SQUARE, INC.
Himawari Securities, Inc.
Nissan Securities Co., Ltd.

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SBI Securities Co., Ltd.
Nomura Securities Co., Ltd.
SMBC Nikko Securities Inc.
Mizuho Securities Co., Ltd.
Okasan Securities Co., Ltd.
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

Credit Suisse Securities (Japan) Limited
Morgan Stanley MUFG Securities Co., Ltd.
Societe Generale Securities Japan Limited
FX Broadnet Co., Ltd.
Mizuho Trust & Banking Co., Ltd.
The Gunma Bank, Ltd.
The Joyo Bank, Ltd.
The Hachijuni Bank, Ltd.
The Bank of Kyoto,Ltd.
The Ogaki Kyoritsu Bank, Ltd
The Yamaguchi Bank, Ltd.
The Hyakujushi Bank, Ltd.
The Bank of Fukuoka, Ltd.
Shinsei Bank, Ltd.
ABN AMRO Clearing Tokyo Co.,Ltd.

○○The Tachibana Securities Co., Ltd.
Citigroup Global Markets Japan Inc.

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32

GlossaryA
API (Application Program Interface)“API” is a system that enables Trading Member
to place orders and receive trading information
through their in-house network systems locatedin their branches. API enhances both transaction
speed and users’ convenience.
C
Carrying Member
A “carrying member” is a Trading Member who
undertakes and manages clearing operations forfinancial futures contracts created by give-up.
Cash settlement“Cash settlement” is a method of final settlementof a futures or options contract where the finallydetermined profit or loss is paid between thecontract parties, without actual delivery of the
product or asset. In contrast, a method ofsettlement by actual delivery is called “delivery
settlement”.
Contract month
A “contract month” is a month in which the final
settlement of a financial futures contract occurs.
At the TFX market, the quarterly contract months,
i.e., March, June, September and December are
listed for Interest Rate etc. Financial Futurescontracts, and the contract months other thanquarterly months (“serial months”) are listed forThree-month Euroyen Futures and Six-month
Euroyen LIBOR Futures. A contract month isalso referred to as a “delivery month”.
D
Daily settlement priceEvening session“Evening session” is a trading session from 15:30
to 20:00 (Tokyo Time) of each business day, andall trades made during an evening session are
regarded as the trades on the next business day
for the purpose of clearing (including calculationof margins and except FX Daily Futures contracts
and Equity Index Daily Futures contracts). A
trade made between 15:30 and 20:00 on April 1
is treated as the trade on April 2. In the TFX
trading system, the day session and the evening
session are indicated as “1” and “2” respectively.
Exercise“Exercise” is the process by which an option
buyer (holder) exercises his/her right to sell or
buy the asset underlying the option contract at a
strike price. For example, if an option buyer
exercises its call option at the strike price of¥100, the option buyer can buy the underlying
asset at ¥100, regardless of the then market
price.
I
ITA Wave“ITA Wave” is the information providing service tomake available full market depth and daily pricedata to the members and non-member investors
either directly by TFX or through information
vendors.
M
MarginA “daily settlement price” is a price used formark-to-market and other clearing operations
and is determined by TFX after the day sessionof each business day (except FX Daily Futurescontracts and Equity Index Daily Futurescontracts).

“Margin”
is the amount of cash or cash
equivalents deposited with TFX as collateral
securities for performance of obligations underfinancial futures contracts. TFX adopts SPAN® tocalculate the requisite margin amounts (except
FX Daily Futures contracts and Equity Index
Daily Futures contracts).

Derivatives

Mark-to-market“Derivatives” are futures, options, swaps or otherfinancial products based on and derivative fromtheir underlying financial assets. Derivatives
consist of exchange listed derivatives and OTC(over-the-counter) derivatives.

All positions are revaluated based on daily
settlement prices prescribed by TFX, according
to the then market values. The profit or loss
calculated by such revaluation is paid between
TFX and the concerned member regarding
Interest Rate Futures contracts, while the profit
and loss is added or subtracted from deposited
margin regarding Daily Futures contracts. Daily
mark-to-market contributes to preventing
accumulation of losses.

E
Euroyen“Euroyen” is the Japanese Yen deposited or
funded in foreign banks or overseas branches of

33

Japanese Banks located outside of Japan.
Euroyen is traded in off-shore accounts also inTokyo.

P
Price and time priority
This is a rule that the highest bid and the lowest
offer are given a priority for matching. If morethan one order are placed at the same price, theearlier order is given a priority.
S
Speculation“Speculation” is a trading style that an investor
dares to take position at its own risk based on its
own market perspective, in order to seek the
profit generated by price fluctuation.
Strike price
A “strike price” is a price at which an option buyer(holder) has the right to sell or buy a specified
volume of the underlying asset. For example, if
an option buyer exercises a call option at the
strike price of ¥100, the option buyer canpurchase the underlying asset at ¥100,
regardless of the market price.
T
Trading Member
A“Trading Member” is a TFX market participantthat has been approved Trading Qualifica-tions
from TFX, and trades financial futures contracts
on the TFX market. Trading Members can directly
trade on TFX without the brokerage of anotherparty.
U
Underlying asset“Underlying asset” is the asset on which an
options or futures contract is based. In the caseof Option on Three-month Euroyen Futures, forexample, the underlying asset is one Threemonth Euroyen Futures contract.

34

Tokyo Financial Exchange Inc.
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1-8-2 Marunouchi, Chiyoda-ku, Tokyo 100-0005
TEL : +81 3 4578 2400 FAX : +81 3 3212 5780
URL : https://www.tfx.co.jp/en/

AccessTwo minute walk from JR Tokyo Station
Six minute walk from Tokyo Subway Station
Two minute walk from Otemachi Subway Station
Three minute walk from Nihombashi Subway Station©TFX 2021.3.22
The copyright of this publication is held by the Tokyo Financial Exchange Inc. (TFX).
This publication has been compiled by TFX for general informational purpose only. Although every attempt has been made toensure the accuracy of the information, TFX assumes no responsibility for any errors or omissions. All matters pertaining torules and procedures herein are made subject to and are superseded by the official rules of TFX.
The descriptions in this publication are only for commentary purposes and do not whatsoever intend to provide advice on
investment or asset management. The statements and calculations herein contain examples for illustration purpose and TFX
will assume no responsibility for their use. This publication is not intended to provide all information that brokers are required
to disclose to their customers pursuant to the laws and regulations applicable to the brokers. TFX reserves the right to change
the contents of this publication without prior notice.