Implementation Of GIVE-UP Functions And Half-Tick Pricing On Tokyo International Financial Futures Exchange

It has been decided that The Tokyo International Financial Futures Exchange (TIFFE) will start Give-up functions and Half-tick pricing by the Board. Both of the new functions are planned to be started from October 26th. Give-ups allow customers to divide execution and clearing on futures trading, which means a customer may instruct one member to execute an order and another to clear the trade respectively. With Give-ups, customers are able to manage margin deposits more effectively and improve risk management. In addition to enhancing customer protection, Give-ups may reduce margin requirements, thus making transactions more convenient for customers. Merits of using Give-ups are, 1) concentration of clearing 2) diversification of execution 3) diversified management of trades and positions. Half-tick pricing will halve the minimum fluctuation for trading and daily settlement prices to 0.5 tick (tick value JPY1,250), which are currently 1 tick (tick value JPY2,500). Moreover the final settlement price will be calculated to the third decimal; 0.1 tick. From these, more accuracy for hedge and arbitrage trades should be achieved. With Give-up functions and Half-tick pricing, TIFFE makes another big step to keeping up with global standards.