Speaking to FOW at last month’s China derivatives forum, he said that the exchange had been in discussions regarding a merger but there were huge regulatory hurdles to overcome.

He said that it is important the government removes the hurdles, which includes the complexity of the regulatory regime in Japan where each underlying asset class *(eg commodities, FX) has a separate regulator, to enable the exchanges to realise the economies of scale that come with mergers.

“Mergers should be a matter for the exchanges, not the government,” he said. “It should be a business decision.”

Ezaki said that Tocom was considering a flotation either as an independent entity or through a merger with a listed exchange.

He did not elaborate on any specific targets.

Japan was once the global powerhouse of derivatives, but trading on Japanese exchanges has fallen substantially over the past decade due to stringent regulation and competition from other countries in the region, notable Singapore.

Tocom has been taking steps to arrest the decline with the implementation of the Nasdaq technology platform and the extension of opening hours to attract more international traders.