Tokyo Commodity Exchange (TOCOM) officials have decided not to impose higher margins on platinum futures after holding an extraordinary board meeting.

The meeting was held following a surge in global platinum prices which has seen the metal rise by more than 20 per cent on the TOCOM since the beginning of the year.

At a news conference, Kazunari Hayakawa, executive director at TOCOM, said that the TOCOM did not plan to impose higher margins on platinum futures but did warn investors of the rising volatility of the market and didn't rule out action in the future.

Explaining TOCOM's proposed course of action, Mr Hayakawa said: "We've agreed to monitor the market closely with great caution. We are also prepared to take appropriate measures, if necessary, when prices move sharply."

Mr Hayakawa said a hike in margins was not yet needed as TOCOM prices were still moving in line with platinum prices on the New York Mercantile Exchange.

He also allayed fears that the TOCOM market was overheating, pointing to daily turnover in platinum contracts averaging around 40,000 to 50,000 contracts in 2008 and declining open interest.

Fears of supply problems in South Africa have seen platinum prices soaring nearly 30 per cent since the start of the year.

Source:

TOCOM says no need yet for higher platinum margins
http://money.ninemsn.com.au/article.aspx?id=379461

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