CFTC Grants Exemptions to Foreign Futures and Options Markets

The CFTC granted exemptions to five foreign futures and options markets through its Part 30 ("Foreign Futures and Foreign Options Transactions") program.

In the new Orders, the CFTC granted exemptive relief to the Bombay Stock Exchange ("BSE"), the National Stock Exchange International Financial Service Centre Limited ("NSE IFSC"), the Montreal Exchange ("MX"), NZX Limited ("NZX") and UBS AG ("UBS"). The exemptive relief allows the firms that are members of the relevant markets, as well as UBS, to directly accept U.S. customer funds for margining futures and options contracts without registering as futures commission merchants ("FCMs") with the CFTC.

The CFTC stated that because the foreign firms are subject to comparable customer protection regulations in their respective jurisdictions, the CFTC can grant exemptive relief pursuant to CFTC Rule 30.10 ("Petitions for Exemption").

As described in the BSE, NSE IFSC and NZX Orders, the CFTC granted exemptive relief on behalf of the intermediaries' respective members; as described in the MX Order, the CFTC amended prior exemptive relief to reflect regulatory improvements. The CFTC stated that the UBS Order granting exemptive relief to a Swiss bank is the first issued directly to an FCM.

The CFTC specified that the exemptive relief does not extend to any transaction in swaps, as defined under Section 1a(47) of the CEA.

The Orders will go into effect on the date of their publication in the Federal Register.

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