As part of the agreement, the Tokyo Grain Exchange (TGE) will use Patsystems’ exchange systems technology as a platform to integrate its existing session-style trading with continuous trading. The program will include Patsystems’ J-Trader front-end, an order management system and a matching engine.
The two companies expect the contract to generate revenues of GBP 4 million over five years, including an element of sourced hardware at a small margin and ongoing license revenue for the use of J-Trader based on the number of users, which is likely to begin at the turn of the year 2005/2006.
It is also hoped that the deal will enable further development to integrate continuous and session markets from a single trading screen with a single clearing and settlement system, which according to the companies will be the first system in the world to accommodate both continuous and session-style trading on a single platform.
We are looking to develop a state of the art system that will have an open architecture to provide access to overseas participants through volume contributors such as independent software vendors (ISVs), said Takao Morisane, chairman of the TGE. Through this new initiative we are expecting to be able to offer our members a more diverse environment and a wider range of products.
Patsystems said the contract builds upon its existing relationship with Japan, who has utilized the company since 1996 to supply four of its five electronic commodity exchanges (including the TGE) with session-based trading technology.
