TOKYO, Jan 29 (Reuters) - Japan’s Mitsubishi Corporation Futures & Securities is pulling out of the retail domestic commodities broking business, excluding online sales, to focus more on institutional trading, a market source said on Thursday.
The divestment by Mitsubishi Futures, a branch of Japan’s biggest trading house, of the retail business to another commodities broker follows increasing regulatory scrutiny of retail investments in Japan, upping the legal risks if investments turn sour.
Mitsubishi Corp Futures, a unit of Japan’s largest trading firm Mitsubishi Corp (8058.T), will transfer its retail account to another broker, Central Shoji Co. Ltd but maintain its online retail broking business, said the source, who declined to be identified because the information was not yet public.
Mitsubishi Futures wanted to focus its commodities trading on the institutional market, and had notified regulators and retail clients about the change, the source said.
Central Shoji was not immediately available for comment. Mitsubishi Corporation Futures declined to comment.
It was not immediately known how many staff would be affected.
Japan’s commodity trading firms are increasingly focusing on trading with financial institutions and end-users of commodities to bolster the struggling Tokyo commodities markets, which face declining volumes and increasing competition from other Asian centres.
Japan’s market has traditionally been dominated by retail investors.
Tokyo Commodity Exchange Inc, Japan’s biggest commodities market which demutualised in December, has been struggling to boost trading volumes for several years.
The exchange plans to upgrade its trading systems in May in a bid to lure more participants, in particular those specialising in proprietary trading.
Trading volume on the exchange, where gold, platinum, rubber and gasoline futures are among the most heavily traded, fell 10 percent to 41 million contracts last year 2008 and the number of members fell 13 percent to 90. (Reporting by Chikafumi Hodo and Chikako Mogi; Editing by Rodney Joyce and Ben Tan)