First developed by Chicago Mercantile Exchange Inc. (CME) in 1988, SPAN is now the margin system of choice in financial capitals worldwide, including Chicago, New York, London, Paris, Oslo, Singapore, Hong Kong, Sydney, Tokyo and Osaka.
“The successful implementation of SPAN is a significant step to streamline and increase the efficiency of the Japanese market,” Tokyo Stock Exchange Managing Director Shigeru Kani commented. “TSE will continue to make every effort to better serve investors worldwide.”
"The Osaka Securities Exchange is very grateful that we could provide additional convenience for our market users by adopting SPAN that is the worldwide standard," said Michio Yoneda, Executive Director of the Osaka Securities Exchange. "We hope that the implementation of SPAN to the OSE can enhance our relations with customers around the world."
“We're pleased that the premier financial markets in Japan have adopted the SPAN margin system," said CME Clearing House President Phupinder Gill. “The system’s flexibility and efficiency have made it the worldwide standard for understanding and managing risk, as well as a vitally important component of the CME's financial safeguards. The exchanges that have adopted SPAN also tell us they value the system’s ease of introduction and use.”
SPAN can be used for the widest possible range of derivative and physical instruments, including futures and options, forwards, equity and debt securities, and physical commodities. SPAN can be used by business-to-business (B2B) marketplaces, just as it can by equities and derivatives exchanges. It is applicable not just to daily margining, but also to real-time risk management, stress testing, and pre- and post-execution credit control systems.
The TSE equity market boasts an average daily trading value of ¥757 billion (1999) and a market capitalization of ¥456 trillion (1999). TSE also maintains a general derivatives market with a full line-up of derivatives products, including JGB futures and options, equity index futures and options, and equity options. The wholly computerized derivatives market accounts for trading contract value of ¥1488 trillion (1999). The OSE is the largest equity derivatives market in Japan. For index futures in Japan, the OSE's share of the contract value of Nikkei 225 Futures in 1999 was about 76 percent (1999). At the same time, for stock index options, the OSE owns about 99 percent of the contract value of Nikkei 225 Options (1999).
The 200 million contracts changing hands at CME in 1999 had an underlying value of more than $138 trillion. The exchange moves approximately $1 billion per day in settlement payments, manages $20 billion in collateral deposits and administers more than $1 billion of letters of credit. Since SPAN was first developed by CME in 1988, it has been adopted by 31 other exchanges and clearing organizations worldwide.
