Commodity futures Option trading being restricted
June 13th, 2007 by 
admin
The METI has decided to restrict the foreign commodity futures option trading by the regulation subject to the Specific Commercial Trading Practices Law.[1][2]
By the regulation, the customer will have a right of cancellation within eight days receiving the contractual document noticed the cancellation right. To the breach of the regulation, the administrative body can issue the business suspension order and impose the criminal sanction; imprisonment up to three yeas or fine up to 3 million yen.
But, it is curious why the METI has a jurisdiction over such financial product trading.
In Japan, the FSA administrates the securities trading. But the definition of security is so limited that it does not include the foreign commodity futures option. On the contrary, the METI administrates a commodity futures trading and a foreign commodity futures trading except currency, therefore the ministry became to have the jurisdiction to the option trading concerning a commodity.
I think it is necessary to simplify the regulation concerning the financial products in the financial products trading law and the administrative authority is concentrated in the FSA. It makes it possible for a consumer to be able to understand the abstract of the regulation. In current situation, a consumer cannot know what law is applied to his financial trading.
[1] METI,
[2] Mainichi Shimbun: April 25, 2007
Posted in Financial Services | 