[Federal Register: July 17, 2006 (Volume 71, Number 136)]
[Rules and Regulations]
[Page 40395-40397]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17jy06-6]
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 30
Foreign Futures and Options Transactions
AGENCY: Commodity Futures Trading Commission.
ACTION: Amended Supplemental Order for Expanded Relief.
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SUMMARY: The Commodity Futures Trading Commission ("Commission or
CFTC") is issuing an Amended Supplemental Order for expanded relief,
authorizing members of the Sydney Futures Exchange ("Exchange or
SFE") to solicit and accept orders from U.S. customers for otherwise
permitted transactions on all non-U.S. and non-Australian exchanges
("foreign exchanges") where such members are authorized by the
regulations of the SFE to conduct futures business for customers. The
Amended Supplemental Order supercedes the prior Supplemental Orders,
relating to expanded relief, issued to SFE in 1997 and 1993. This
Amended Supplemental Order is issued pursuant to Commission
[[Page 40396]]
Regulation 30.10, which permits the Commission to grant an exemption
from certain provisions of Part 30 of the Commission's regulations, and
the Commission's Order to SFE dated November 1, 1988 (Original Order),
granting relief under Regulation 30.10 to designated members of the
Exchange.
DATES: Effective Date: July 17, 2006.
FOR FURTHER INFORMATION CONTACT: Lawrence B. Patent, Esq., Deputy
Director, or Susan A. Elliott, Esq., Special Counsel, Division of
Clearing and Intermediary Oversight, Commodity Futures Trading
Commission, 1155 21st Street, NW., Washington, DC 20581. Telephone:
(202) 418-5430.
SUPPLEMENTARY INFORMATION: The Commission has issued the following
Order: Amended Supplemental Order Under CFTC Regulation 30.10 Exempting
Firms Designated by the Sydney Futures Exchange From the Application of
Certain of the Foreign Futures and Option Regulations for Trading on
Certain Non-U.S. and non-Australian Exchanges ("Foreign Exchanges"),
After Filing of Consents by Such Firms and the Sydney Futures Exchange,
as Appropriate, to the Terms and Conditions of the Order Herein.
On November 1, 1988, the Commission issued an Order under
Regulation 30.10 authorizing designated members of the SFE to offer or
sell certain futures and option contracts traded on the Exchange to
persons located in the United States.\1\ The Original Order limited the
scope of permissible brokerage activities undertaken by designated SFE
members on behalf of U.S. customers to transactions "on or subject to
the rules of the Exchange."\2\ Subsequently, the Commission issued
Regulation 30.10 orders which did not include this limitation (expanded
relief), including such orders to SFE.\3\
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\1\ 53 FR 44856 (November 7, 1988).
\2\ 53 FR at 44857.
\3\ 58 FR 19209 (April 13, 1993), hereafter 1993 Supplemental
Order, and 62 FR 10445 (March 7, 1997), hereafter 1997 Supplemental
Order. The 1997 Supplemental Order clarified certain depository
requirements later adopted as Regulation 30.7, 17 CFR 30.7 (2006).
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A condition of the Commission's grant of expanded relief in 1993 is
that SFE carry out its compliance, surveillance and rule enforcement
activities with respect to solicitations and acceptance of orders by
designated SFE members of U.S. customers for futures business on
Recognized Futures Exchanges, as defined in Section 9(b) of the
Australian Corporations Law (ACL), other than a contract market
designated as such pursuant to section 5a of the Commodity Exchange Act
(Act), to the same extent that it conducts such activities with regard
to SFE business.
The passage of the Financial Services Reform Act (FSRA) in
Australia in March 2002 eliminated the list of Recognized Futures
Exchanges as defined in the ACL. A condition for the granting of Part
30 Expanded Relief to SFE in 1993 was that a foreign exchange be
included on that list. This Amended Supplemental Order eliminates this
condition, and substitutes the condition that SFE must identify in its
rules the foreign exchanges on which its members handle transactions on
behalf of U.S. customers.\4\ SFE has submitted a proposal to its
regulator, the Australian Securities and Investments Commission
(ASIC),\5\ representing that it will identify in its rules the foreign
exchanges on which its members may handle transactions on behalf of
U.S. customers, pursuant to its expanded relief. SFE will make the rule
effective on August 1, 2006.
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\4\ Relief under this Amended Supplemental Order extends only to
those products falling within the jurisdiction of the Act and
remains subject to existing product restrictions under the Act and
Commission regulations thereunder related to stock indices and
foreign government debt (see Section 2(a)(1)(B)(v) of the Act and
Securities and Exchange Commission Regulation 3a12-8, 17 CFR
240.3a12-8 (2006)).
\5\ Letter of April 3, 2006 from Barbara Jones, Senior Legal
Counsel, SFE, to Ms. Tracey Lyons, Director, Markets Regulation,
ASIC.
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The relief provided under this Amended Supplemental Order, however,
is contingent on the SFE's Exchange Members' continued compliance with
the Original Order and the Exchange's and Exchange Members' compliance
with the following conditions:
(1) The SFE will carry out its compliance, surveillance and rule
enforcement activities with respect to solicitations and acceptance of
orders by designated Exchange Members of U.S. customers for options and
futures business on all non-U.S. exchanges listed in Rule 2.2.30(a) of
the Exchange rules to the same extent that it conducts such activities
in regard to Exchange business;
(2) The SFE will cooperate with the Commission with respect to any
inquiries concerning any activity that is the subject of this Amended
Supplemental Order, including sharing the information specified in
Appendix A to the Commission's part 30 regulations, 17 CFR part 30, on
an "as needed" basis on the same basis as set forth in the Original
Order;
(3) Each SFE Member confirmed for relief under the Original Order
seeking to engage in activities that are the subject of this Amended
Supplemental Order must agree to provide the books and records related
to such activities required to be maintained under the applicable laws
and regulations now in effect in Australia and Exchange regulations on
the same basis as set forth in the Original Order; \6\
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\6\ SFE member firms that currently operate under the Original
Order will be deemed to have consented to condition (3) by effecting
transactions pursuant to this Amended Supplemental Order. Exchange
members who apply for confirmation of Regulation 30.10 relief
subsequent to the issuance of this Amended Supplemental Order must
submit representations to the National Futures Association
consistent with condition (3) of this Order, and the list of foreign
exchanges required by condition (4), as well as the representations
required by the Original Order.
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(4) Foreign futures and options exchanges on which each SFE Member
firm may engage in transactions on behalf of U.S. customers are those
foreign exchanges identified in Rule 2.2.30(a) of the Exchange rules,
provided however, that Exchange Members may not engage in any
transactions on behalf of U.S. customers on an exchange designated as a
contract market under section 5 of the Act;
(5) SFE Members who apply for confirmation of Regulation 30.10
relief with National Futures Association must provide a list of the
foreign exchanges where they intend to engage in transactions on behalf
of U.S. customers pursuant to the SFE Expanded Relief granted in this
order and must agree to abide by the Original Order; and
(6) The SFE will continue to comply with the terms of the Original
Order with respect to transactions effected for U.S. customers on the
SFE.
This Amended Supplemental Order is issued based on the information
provided to the Commission and its staff. Any changes or material
omissions may require the Commission to reconsider the authorization
granted in this Amended Supplemental Order.
List of Subjects in 17 CFR Part 30
Commodity futures, Commodity options, Foreign futures.
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Accordingly, the Commission hereby amends Chapter I of Title 17 of the
Code of Federal Regulations as follows:
PART 30--FOREIGN FUTURES AND FOREIGN OPTION TRANSACTIONS
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1. The authority citation for part 30 continues to read as follows:
Authority: Secs. 1a, 2(a)(1)(A), 4, 4c, and 8a of the Commodity
Exchange Act, 7 U.S.C. 1a, 2, 6, 6c and 12a.
Appendix C to Part 30--[Amended]
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2. Appendix C to Part 30--Foreign Petitioners Granted Relief from the
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Application of Certain of the Part 30 Rules. The following citation is
added:
Firms designated by the Sydney Futures Exchange Limited.
* * * * *
FR date and citation: 70 FR [insert number of page on which this
release begins] July 17, 2006.
* * * * *
Issued in Washington, DC, on July 11, 2006.
Eileen A. Donovan,
Acting Secretary of the Commission.
[FR Doc. E6-11152 Filed 7-14-06; 8:45 am]
BILLING CODE 6351-01-P