March 4, 2020

CFTC Clarifies Cross-Border Regulatory Commitments in Unanimous Vote

Washington, D.C. — The Commodity Futures Trading Commission today announced it unanimously approved amendments to § 30.10 of CFTC regulations to codify the agency’s authority to terminate exemptive relief issued to foreign firms. Part 30 of CFTC regulations governs the offer and sale of foreign futures and options to customers located in the United States. 

“International comity and deference as well as clarity in our supervisory activities are critical for sound regulation. Because they are essential to our global derivatives markets, my commitment to them is ironclad,” said CFTC Chairman Heath P. Tarbert. “A decade after the post-crisis regulatory response, we are increasingly witnessing cross-border derivatives regulation that utilizes comity and deference. But deference is a two-way street. By amending our Part 30 exemptive relief rule, foreign jurisdictions will have additional certainty as to process for withdrawal following a review of an exemption’s appropriateness in light of international comity.”

“I thank my fellow Commissioners for their unanimous support for these amendments,” added Chairman Tarbert. “In clarifying our cross-border regulatory commitments, the CFTC continues to set the global standard for sound derivatives regulation.”

Background on Part 30 Amendments

Through its Part 30 exemptive program, the CFTC has provided foreign entities with increased access to U.S. customers, and U.S. customers with increased access to foreign futures markets, for nearly 30 years by permitting customers to deal directly with foreign brokers subject to comparable regulatory oversight. A foreign regulator or self-regulatory organization that seeks an exemption under § 30.10 on behalf of foreign brokers located in its jurisdiction must set forth, with particularity, the comparable laws and regulations applicable in the jurisdiction in which that person is located.

Within each exemptive order issued under § 30.10, the CFTC reserves the right, among other authority, to terminate the exemptive relief granted on its own motion. The amendments unanimously adopted by the Commission clarify this process by enumerating specific circumstances under which termination could take place, including lack of reciprocal deference by a foreign regulatory regime relating to the execution or clearing of any commodity interest subject to the Commission’s exclusive jurisdiction. To date, the Commission has not terminated any § 30.10 orders providing exemptive relief.

-CFTC-