Japan Exchange Group Inc. (JPX) and Tokyo Commodity Exchange Inc. said Tuesday they have agreed on a merger to launch the country’s first all-in-one exchange that can handle both stocks and commodity futures.
The bourses hope that the new exchange, to be introduced in summer 2020, will attract more domestic and overseas participants and enhance their competitiveness at a time when Japan is lagging behind the global trend of integrated bourses.
JPX, owner of the Tokyo and Osaka exchanges, will buy the Tokyo Commodity Exchange for ¥5.5 billion ($50 million), aiming to make it a wholly owned subsidiary by Sept. 24.
The merger deal was pushed back from the initial target of June due to differences over the purchase price.
Under the deal, some commodities handled at the Tokyo Commodity Exchange such as gold, agricultural products and rubber will be transferred to the Osaka Exchange.
At an integrated exchange, brokers need only one license to trade both securities and commodities.
Energy-related commodities including crude oil will stay at the Tokyo Commodity Exchange.
The merger has been pushed by the government as the Tokyo Commodity Exchange has posted a net loss for four straight years through March 2019.