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Functionality

Overview

The TOCOM Gateway supports trading and managing of positions through TOCOM Member Accounts and Sub-Accounts. A Member Account is used primarily by the Exchange for tracking margin and settlement, while a Sub-Account is used for trading and managing positions.

Account Setup

A TOCOM member requests and receives an Account from the Exchange. A Member Account is identified and tracked by an Account Number and an Account Type. Each Account Number consists of the prefix “TC” for TOCOM, a member-defined ID, and a Deposit Account number.

Example TOCOM Account Number

TC + Member ID + Deposit Account

TC 1234 19

Each Member Account includes CTI/Origin (customer type identifier and origin) information, which is a two-digit number included as part of the Account Number. This CTI/Origin information is referred to as the Deposit Account. Since it depends in large part on the CTI information, a given Account can have only one Deposit Account. However, because of the CTI, a TOCOM Member can have multiple Accounts.

The Deposit Account consists of the CTI/Origin code and a number generated by the Exchange for the unique identifier of the account. For example, a Deposit Account of 12 indicates a Market Maker account; a Deposit Account of 33 is an Associate Member account, etc.

Example Deposit Account

CTI/Origin (1- exchange, 2 - general broker, 3 - member broker) + a number (0-9) generated by the exchange used as a unique identifier of the account

12 (Market Maker account)

A TOCOM Member Account Type is defined with the prefix “MSA” (Margin & Settlement Accounts), and the Deposit Account number.

Example TOCOM Account Type

MSA + Deposit Account

MSA19

The following figure shows an example of how TOCOM Member Accounts are defined.

Account Types

The following tables show the different Deposit Account and Member Account types.

Deposit Account Types

Deposit Account

Description

11

Exchange

12

Market Maker

19

Temporary

21

Client Commercial

22

Client General

31

Market Member

32

FCM

33

Associate Member

34

General Member

The Member Account types supported by the Gateway are shown in the following table.

Member Account Types

Account Type

Description

MSA11

Exchange

MSA12

Market Maker

MSA19

Temporary

MSA21

Client Commercial

MSA22

Client General

MSA31

Market Member

MSA32

FCM

MSA33

Associate Member

MSA34

General Member

Account Margining and Settlement

The primary use of a Member Account is for tracking margin and settlement. Because margining and P&L calculations are done at the account level, any positions tracked in sub-accounts are aggregated into the Account. All trades performed using the Member Account are aggregated and margined/settled together.

TOCOM determines the commission and margin deposit pricing for the accounts. For each account the calculation results are sent to JCCH (clearing house), where information is totaled in 3 classifications: internal Exchange, general brokerage, and member brokerage.

Sub-Account Setup

Each Member Account can be subdivided further into one or more Sub-Accounts. A member or proxy trader sub-account also is received from the Exchange per TOCOM Member request. All trades and positions are tracked at the Sub-Account level.

The Net Sub-Account type appears as an Account Allocation Setting in the Sub-Account number as “N.”

This setting determines how positions are tracked at the Exchange, and must be specified on the order. If it is not designated at the time of order entry, or if a non-existing sub-account is selected, the trade is stored in a temporary (unallocated) account.

A sub-account is identified and tracked by its Sub-Account Number and Sub-Account Type ID. The Sub-Account number consists of the prefix “TC” for TOCOM, a member-defined ID, Deposit Account, and Account Allocation setting.

Example Sub-Account Number

TC + Member ID + Deposit Account + Account Allocation Setting

TC 1234 11 N

The Sub-Account Type ID consists of the prefix “TPA” (Trading & Position Accounts), the CTI/Origin information, and the Account Allocation Setting.

Example Sub-Account Type ID

TPA + CTI/Origin (1- exchange, 2 - general broker, 3 - member-broker) + Account Allocation Setting

TPA3N

The following figure shows an example of multiple sub-accounts created per TOCOM Member .

Sub-Account Types

The Sub-Account types supported by the TOCOM Gateway are shown in the following table.

Member Account Types

Account Type

Description

TPA12MM

Market Maker

MSA19IA

Temporary

TPA1N

Exchange Net Account

TPA2N

General Broker Net Account

TPA3N

Member Broker Net Account

Net Sub-Account Positions

The quantities of each product you trade are tracked in Net Sub-Accounts. All quantities of contracts you buy and sell are netted together to give you one position. At the end of a trading session, your account is either long or short.

The following example shows how positions are determined in Net Sub-Accounts.

Example Net Sub-Account Position

If you buy 5 and sell 3 December futures contracts, your position in your Net Sub-Account is long 2 December contracts.

When the account is settled at the end of the trading session, the traded quantities of each product are netted together.

The TOCOM Gateway supports risk management and P&L calculations for the netted position in the account.