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(Reference Translation)Introduction of Derivatives Holiday TradingJune 15, 2021Osaka Exchange, Inc.Tokyo Commodity Exchange, Inc.I. PurposeOsaka Exchange, Inc. (OSE) and Tokyo Commodity Exchange, Inc. (TOCOM) (hereinafter collectively referred to as the "Exchange") currently designateSaturdays, Sundays, national holidays and some days over New Year as non-business days. As Japan has relatively more national holidays than other countries,and as derivative exchanges in many countries operate their markets even on national holidays, there are many days where index futures and commodityfutures trading can be carried out on overseas derivative exchanges while the Exchange is closed.In light of this situation, the Exchange will introduce holiday trading in its derivatives market, from the perspective of further convenience for investorsthrough provision of hedging opportunities during national holidays, thereby strengthening the competitiveness of Japan's derivatives markets.1II. OutlineItemDetailsRemarks・ In principle, all current non-business days (excluding Saturdays, Sundays, and・ In addition to Saturdays, Sundays,1. Basic Framework(1) Eligible Holidays andHoliday Trading DaysJanuary 1) will be eligible for holiday trading.and January 1, national holidays・ When the Exchange considers it necessary to use a holiday for the purpose of(and substitute holidays), January 2,large scale system replacement, etc. at Japan Exchange Group, Inc. and itsJanuary 3, and December 31 aresubsidiaries including the Exchange, or considers that a specific holiday shouldcurrently specified as non-businessbe excluded from the point of view of risk management, said holiday will bedays.1In order to conduct detailed study on the rules for derivatives holiday trading, OSE established a "Working Group on Derivatives Holiday Trading" lastyear consisting of market participants, and published a summary of the results of said Working Group's discussions in the form of a report in June 2020."Publication of Report of the Working Group on Derivatives Holiday ws/news-releases/0060/20200630-01.html1
(Reference Translation)ItemDetailsRemarksexcluded from consideration as eligible for holiday trading.(2) Method of・ The planned holiday trading days for the next year shall be announced in・ The schedule for the second half ofAnnouncementFebruary, and the finalized dates for the first half and second half of the next yearthe year will include the plan for theregarding Holidayshall be announced in June and December respectively.first eligible days of the followingTrading Daysyear.・ See the appendix for details of theschedule announcement.(3) Eligible Products・ The eligible products for holiday trading shall be as follows by product category.a.JGB Futures and Options on JGB Futures:eligibility for holiday trading will beNot eligibledecided by the Exchange for eachb. Index Futures and Options:c.・ For new products listed in the future,product with consideration given toEligiblethehandlingofeachproductCommodity Futures and Options on Commodity Futures (including productscategory as described on the left.listed on TOCOM):Eligibled. Securities Options:Not eligible(4) Method ofParticipation・ Any trading participant who participates in holiday trading (hereinafter referredto as a "holiday trading participant") will be required to apply in advance to theExchange (hereinafter referred to as an "application for participation").・ Participation in holiday trading isoptional for trading participants.・ Applications for participation donot need to be made separately foreach holiday trading day.・ Applications for participation shall2
(Reference Translation)ItemDetailsRemarksbe accepted per trading participantand not per market or product.・ If a trading participant chooses notto participate in holiday trading(hereinafter referred to as a"holiday trading non-participant"),they do not need to take any action,but the Exchange will suspend theirability to send orders duringholiday trading.・ If a holiday trading participant chooses not to participate in trading on a specific・ If a holiday trading participantholiday trading day, they will be required to submit to the Exchange in advancesubmits an application for non-a separate application from the application for participation (hereinafter referredparticipation on a specific holiday,to as an "application for non-participation on a specific holiday").the Exchange will suspend theirability to send orders during therelevant holiday trading day.・ If a holiday trading participant wishes to suspend placement of orders from a・ A sub-participant code is a unit ofspecific sub-participant code on a specific holiday trading day, they will betrading participant login IDs for therequired to submit to the Exchange in advance a separate application from bothExchange's derivative tradingthe application for participation and application for non-participation on asystem (J-GATE).specific holiday (hereinafter referred to as an "application for non-participationof a specific sub-participant code").・ If a holiday trading participantsubmits an application for nonparticipation of a specific subparticipant code, the Exchange willsuspend the ability to send ordersfrom that code during the relevant3
(Reference Translation)ItemDetailsRemarksholiday trading day.・ Details of procedures forapplications for participation, nonparticipation on a specific holidayand non-participation of a specificsub-participant code, as well asother advance notifications to berequired by the Exchange, will beannounced later.・ For operational reasons related toderivatives holiday trading,information contained inapplications submitted to theExchange from trading participantswill be managed jointly with JapanSecurities Clearing Corporation(JSCC), which will set the rules forclearing and settlement ofderivatives holiday trading.2. Trading Rules(1) Markets・ Both auction and off-auction (J-NET) markets shall be opened on holidays.(2) Trading Day and・ The "trading day" of derivatives holiday trading shall be the same as that of theTrading Hoursnight session which starts on the business day preceding the holiday tradingday(s) and the day session which starts from the business day following the4
(Reference Translation)ItemDetailsRemarks・ The trading hours for day and night sessions of holiday trading days shall be the・ Trading hours on the J-NET marketholiday trading day(s).same as those for day and night sessions on weekdays.shall also be the same as tradinghours on weekdays.(3) Contract・ The same trading rules as those on weekdays will apply to holiday trading.Months/Strike Prices・ There will be no contract monthsand/or strike prices set only forholiday trading (It will not bepossible to set flexible contractsduring a holiday).(4) Reference Prices・ The reference prices for price limit ranges shall be the same as those in the night・ The reference prices in the daysession of the business day preceding the holiday trading day(s) and will not besession of the business dayupdated based on holiday trading.following the holiday tradingday(s) shall be, as at present, thesame as those in the night sessionof the business day preceding theholiday trading day(s).(5) Tick Sizes/Price Limit・ The same trading rules as those on weekdays will apply to holiday trading.Ranges/Trading Units・ Processes for expanding price limitranges during holidays will be thesame as those on weekdays.・ In cases where a price limit range isexpanded during the holiday,trading in the day session of thebusiness day following the5
(Reference Translation)ItemDetailsRemarksholiday(s) will start with theexpanded price limit range.・ In principle, the same trading rules as those on weekdays will apply to holidaytrading with regard to order types and conditions.・ However, GTC/GTD orders placedby holiday trading non-participantson or before the business daypreceding the holiday trading day(s)will expire between the end of thenight session of the precedingbusiness day and the start ofholiday trading, regardless ofwhether the product is eligible forholiday trading. Also, GTC/GTDorders placed by holiday tradingparticipants will expire between theend of the holiday trading day andthe start of the day session on thefollowing business day.(6) Temporary Trading・ The same trading rules as those on weekdays will apply to holiday trading.・ As described in (5), after the SCB isHalts (Static Circuittriggered, the price limit range willBreaker (SCB))be expanded in the same way as onweekdays.(7) ImmediatelyExecutable Price・ The duration of trading halts after the DCB is triggered will be longer than thaton weekdays.・ The duration of trading halts afterthe DCB is triggered on weekdaysRange (Dynamicis, as a rule, 30 seconds for futures6
(Reference Translation)ItemDetailsCircuit BreakerRemarksand 15 seconds for options.(DCB))・ We will notify trading participantslater on the specific duration oftrading halts during holidays.(8) Strategy Trading・ The same trading rules as those on weekdays will apply to holiday trading.(9) Give-Up Applications for give-up (including give-up correction) and take-up for tradesexecuted during a holiday will not be accepted during the holiday(s).・ Applications for give-up and take-upfor trades executed during theholiday(s) will be accepted on andafter the business day following theholiday(s).(10) Correction of Applications for correction of proprietary/customer accounts and transactions for・ "Business days" for the purpose ofProprietary/Customererror correction will be accepted based on the same schedule as on weekdays,calculating the deadline forAccounts andprovided they are sent by a holiday trading participant.applications will not includeTransactions for Errorholiday trading days.Correction(11) Othera. Market Maker Program・ Holiday trading non-participants (orIn principle, market maker programs will also apply for holiday trading.their final customers) which aredesignated as market makers forproduct(s) eligible for holidaytrading shall not be subject toobligations for quotes, etc. for saidproduct(s) during the holiday(s).7
(Reference Translation)ItemDetailsRemarks・ We will notify trading participantslater with details of performanceobligations and incentives for themarket maker programs related toholiday trading.b. OtherWith regard to the handling of trading rules other than those described above, inprinciple, the same trading rules as those on weekdays will apply to holidaytrading.3. Clearing and SettlementRulesHandling of Clearing and・ Clearing participants contracted by trading participants who participate inSettlement for Holidayholiday trading shall be required to handle clearing and settlement for holidayTradingtrading in compliance with rules stipulated by JSCC. See the outline published by JSCCfor details.2 In cases where holiday tradingreserve needs to be used ascompensation based on JSCC’s LossCompensation Framework for listedderivatives, the plan is for theExchange to make that contribution.4. Trading SystemsAvailable Systems・ Holiday trading shall be conducted on J-GATE.・ The J-NET portal (a service provided by OSE as a system for orders on the J-2"Outlinesrelated to Risk Management Framework associated with Introduction of Derivatives Holiday ・ However, it will not be possible to
(Reference Translation)ItemDetailsNET market) will be also available.Remarksset flexible contracts during aholiday.5. Other(1) Publication of・ Trading volume and other statistics for holiday trading will be published by・ We will not publish tradingStatistics for Holidaytreating the "trading day" for holiday trading as part of the night session of thevolumes andTrading by thebusiness day preceding the holiday trading day(s) and the day session of theopening/high/low/closing pricesExchangebusiness day following the holiday trading day(s).separately for just the holidaytrading day.(2) Other・ Other necessary revisions shall be made.III. Implementation Date (Planned)The start of derivatives holiday trading has been set for around September 2022. Holiday trading days in 2022 will be announced by around the end of2021 using the method described in II-1-(2).DISCLAIMER: This translation may be used for reference purposes only. This English version is not an official translation of the original Japanese document. In cases where any differences occur betweenthe English version and the original Japanese version, the Japanese version shall prevail. This translation is subject to change without notice. Japan Exchange Group, Inc., Osaka Exchange, Inc., TokyoCommodity Exchange, Inc. and/or their affiliates shall individually or jointly accept no responsibility or liability for damage or loss caused by any error, inaccuracy, or misunderstanding with regard to thistranslation.9
Appendix Schedule for Announcement of Holiday Trading Days Generally, the Exchange announces and notifies the schedule for holiday trading based on the following schedule. Holiday trading days (scheduled) for the next year are announced in February every year. Holiday trading days (finalized) for the first half and the second half of the next year are announced in June and Decemberrespectively.Schedule for Announcement of Holiday Trading DaysYear XYear X 1Year X 2Year X 31 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 Notice on annual schedulefor Year X 1Scheduled holiday tradingdays for the year Notice on decisionon Jan.-Jun. datesfor Year X 1Finalized holidaytrading daysfor Jan.-Jun.Scheduled holidaytrading daysfor Jul.-Dec. Notice on decisionon Jul.-Dec. datesfor Year X 1Finalized holidaytrading daysfor Jul.-Dec.The notice on the left includes the schedule for the beginningof the following year. (Same applies to subsequent years.) Notice of annual schedulefor Year X 2Scheduled holiday tradingdays for the year Notice on decisionon Jan.-Jun. datesfor Year X 2Finalized holidaytrading daysfor Jan.-Jun. Notice on decisionon Jul.-Dec. datesfor Year X 2Scheduled holidaytrading daysfor Jul.-Dec.Finalized holidaytrading daysfor Jul.-Dec. Notice of annual schedulefor Year X 3 2021 Japan Exchange Group, Inc.Scheduled holiday tradingdays for the year
holiday trading. A lso, G TC /G TD orders placed by holiday trading participants w ill expire between the end of the holiday trading day and the start of the day session on the follow ing business day. (6) Temporary Trading H alts (S tatic C ircuit B reaker (SCB )) ・ T he same trading ru
