The Tokyo Commodity Exchange, Inc. (TOCOM) announced Precious Metals Market rule changes for Declared Delivery and Customized Delivery. The new rules allow settlement through the delivery of bars instead of warehouse receipts where there is consent between buyer and seller. In conjunction with these rule changes, TOCOM accepted Brink’s Japan Limited as a newly approved warehouse operator, which will increase delivery options.


The Tokyo Commodity Exchange, Inc. (TOCOM) announced Precious Metals Market rule changes for Declared Delivery and Customized Delivery. The new rules allow settlement through the delivery of bars instead of warehouse receipts where there is consent between buyer and seller. The updated rules took effect on August 1 and are applicable to the August 2017 contracts onward.

TOCOM had stipulated, as a general rule, that Precious Metals Market futures were settled by delivery of warehouse receipt from a TOCOM’s approved warehouse for bullion the manufacturer refined and held in their storage themselves.

This rule controls and maintains the quality of deliverable goods in an open marketplace where anonymous participants can trade and conveniently distribute bullion.

Recently, an increasing number of market participants, particularly those from abroad, requested that the Exchange permit settlement by the delivery of precious metal bars.

In response, TOCOM adjusted the rules for Declared Delivery and Customized Delivery. The adjustment defines the requirements for counterparties who wish to deliver through mutual consent.

The updated rules substantially ease restrictions imposed on the precious metals’ commercial participants and the financial institutions, which do not have warehouse receipt issuance qualifications, when they wish to deliver bullion on the TOCOM market.

For example, a local precious metals processor may use gold bars purchased from an international vendor for delivery without having to have a warehouse receipt issued. Other participants may use bars purchased from an overseas financial institution for delivery by transferring ownership at a warehouse.

In conjunction with these rule changes, TOCOM accepted Brink’s Japan Limited as a newly approved warehouse operator, which will increase delivery options. Brink’s Japan is a subsidiary of Brink’s Incorporated, a U.S.-based company providing security services including global transportation and storage for high-value goods.

They operate globally and are experienced in custom-house businesses. Their services are expected to contribute to improving TOCOM’s market convenience for the wider trading community.

To develop a comprehensive commodity market, TOCOM is working to meet the various needs of a diverse set of market participants. This includes not only futures but physical transactions. TOCOM continues to make efforts improve usability and liquidity of the market.