CFTC Permits Transfer of U.S. Customer Collateral to Foreign FCM for Foreign Futures

The CFTC Division of Swap Dealer and Intermediary Oversight granted relief from the requirements of CFTC Rule 30.7 to two subsidiaries of holding companies. The relief allows the transfer of customer-owned securities by a U.S. futures commission merchant to a foreign broker where the securities were to be used to margin customers' positions in foreign futures and options cleared through a foreign clearinghouse subject to regulation in the UK. The relief also permits the foreign broker to deposit the securities in an individual client account established with an EU central counterparty. The Division determined that the transfer of the assets, under the strict conditions established in the letter, was consistent with CFTC policy and would provide the U.S. customers with material protection from credit risk to the foreign broker.