U.S. FUTURES LEADER SEES TOKYO LIBERALIZING
Japan will liberalize rules
restricting their financial institutions' ability to trade
foreign financial futures contracts within the next two years,
Leo Melamed, director of the Chicago Mercantile Exchange's,
CME's, executive committee, said.
    Melamed, also the head of Dellsher Investment Co Inc, told
a press conference yesterday at the Futures Industry
Association convention that within the next year or two the
Japanese government is "going to lift the curtain on their
community of users" of futures markets.
    Currently, government restrictions prevent Japanese
citizens from trading futures or options contracts off-shore
and converting the profits back into yen, according to Richard
Heckinger, CME's vice president for international marketing.
    In addition, Japanese are not allowed to convert yen into
dollars for the purpose of trading futures contracts overseas,
he said.
    Melamed predicted the Nikkei stock average index future --
a price-weighted index future based on 225 Tokyo Stock Exchange
issues which is traded on the Singapore International Monetary
Exchange and mutually offset at the CME -- would do much better
if Japanese financial institutions were able to use it.
    CME is waiting for approval from the Commodity Futures
Trading Commission to begin trading the Nikkei stock index
future in Chicago.
    "We will not do as well with that contract until or unless
the Japanese community, financial institutions, can utilize it
in Chicago," Melamed said.
    Melamed and Heckinger said they had no firm evidence that
Tokyo would liberalize futures trading rules, but sensed from
Japanese inquiries and visits a readiness to change.
    Next month, the CME is to open a Tokyo office to strengthen
the exchange's link to Japan.
    The managing director of the office will be Takeo Arakawa,
formerly of the Ministry of Finance and the Bank of Tokyo.
    Melamed said he hoped Arakawa would help the CME maintain a
competitive edge when Japan launches financial futures trading.
    Next month the Osaka exchange is set to begin trading a
stock index future, Heckinger said.
    "We are not going to let them (the Japanese) do what they
did to the American automobile industry. We want to be partners
with them," Melamed said.
 Reuter
