Medium-Term Management Plan Brief Overview
Tokyo Financial Exchange Inc.
January 2020

Current Market Environment and Key Management Principle
Market conditions
For Interest Rate Futures Business
YCC has dried up trading needs

For Daily Futures BusinessTougher competition with OTC brokers
No direct access from TFX to end-clients

Environments for financial instruments exchange and financial services industry
ITC innovation drives intensified competition with various types of players home and abroad

・Key Management Principle-contribute to the sound development of Japanese financial market
and secure its own profit through this.

-work on each of the individual strategies with ”Think big. Start small” in mind.
Tokyo Financial Exchange Inc.

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Basic Strategies

Promote communication with stakeholders• Be responsive to the needs of market participants/investors• Deliver management plan clearly and timely to wide stakeholders• Make full assessment of its profitability by the Board of Directors before implementing thefollowing individual measures

Management Plan
Planning period : 5 years*, from April 1, 2020 to March 31, 2025
Interim review : the summer of 2022, in 3 years*5-year period synchronizing with the term of current system operation
Tokyo Financial Exchange Inc.

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Individual Measures : Revamp Revenue Structure - short term（１）Retail Business（ⅰ）Expand CFD products offering

・Launch early Equity Index Daily Futures, “Click Kabu 365 with Reset Day”
・Explore new products offering, such as ETF linked to Gold, REIT, etc. that fulfill the following availability:✓ fair and referable price benchmark,✓ eligible market makers✓ good potential trading needs（ⅱ）Attract overseas investors

・Start active marketing to attract new customer flow from Taiwan and Hong Kong when local brokers become eligible（ⅲ）Supply our tools to financial institutions, encouraging their new business creation

・Develop FX or CFD market-linked new products: foreign currency deposit, investment trust, etc.
・Stimulate trading needs from non-interbank players: life insurer, investment trust and advisors, trading firms, etc.

（２）Wholesale Business（ⅰ）Diversify Clearing Business・Investigate the feasibility of new clearing business: NDFs, currency swaps, options, ABS, etc.

Execute all the above strategies promptlyTokyo Financial Exchange Inc.

4Individual Measures : Revamp Revenue Structure - long term（（１）Wholesale business（ⅰ）Offer new tools for credit risk management
・ Consider new tools offering, feasibility, how it should be implemented, with market participants（２）Expand scope of business partners（ⅰ）Develop partnership with overseas firms

・ Facilitate cooperation with overseas firms to support market participation from overseas andtie-up services（ⅱ）Collaborate with non-financial industry

・ Investigate, with non-financial firms, feasibility to provide new financial services

After interim review, get ready for implementation
Tokyo Financial Exchange Inc.

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Individual Measures：Revamp Cost Structure
TFX implements cost saving measures targeting JPY 400 million per year.
（１）Saving Office Rent

（２）Replacing System

Downsize office space

Cutdown on running cost bysystem replacement（３）Overall cost saving

Review and trim down on
personnel and overall costs

Client Oriented Reorganization

Prompt Action

Revise organizational structure, responding toclient attributes of retail and wholesale

Take immediate viable measures to implement
short term individual measures (c.f. P.4)

Set target of constant annual net profit at over JPY 200 million
Tokyo Financial Exchange Inc.

6Interim review and amendment of management plan
FY2020～・ Release Plan
・ Implement
Immediate Measures

2022～

2022
・ Interim Review

・ Amend Plan

・ Implement
Amended Plan

FY2024・ Evaluate the Result（Formulate a New Plan）• Amend the management plan at the interim review period
in three years depending on the following factors:(1) Development on new tools for controlling credit risks(2) Outlook on revision of interest rate benchmarks(3) Expansion of customer base(4) New approach to next system development

Tokyo Financial Exchange Inc.

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