Release: 4909-04
For Release: April 6, 2004

CFTC PROPOSES CHANGES TO REQUIREMENTS FOR FOREIGN FUTURES FIRMS

Washington, D.C. – The Commodity Futures Trading Commission (CFTC) is proposing amendments to Part 30 of its rules to clarify previous interpretative statements and no-action letters. The proposed amendments would affect foreign futures and options brokers (FFOBs); generally that is, non-U.S. firms that engage in transactions on non-U.S. markets on behalf of persons located in the U.S. This is a reproposal of rules first published in 1999.

The CFTC proposes to amend rule 30.4(a) by clarifying that FFOBs are not required to register as futures commission merchants (FCMs) under U.S. law, or to seek exemption from registration under rule 30.10, if they fall generally into one or more of the following categories: (1) those that only carry customer omnibus accounts for U.S. FCMs, which are accounts in the name of the U.S. FCM that include positions of several customers; (2) those that only carry accounts of their U.S. affiliates; and (3) those that only carry accounts that are classified as “proprietary” to a U.S. FCM.

In addition, the Commission is proposing to amend rule 30.10 to clarify that an FFOB may still be eligible to handle transactions for U.S.-located customers on non-U.S. markets without registering under U.S. law even if it has bank branches in the U.S. The major difference between the 1999 proposal and the current one is that where the 1999 proposal required an FFOB to file a specified set of representations with the National Futures Association, this proposal instead lists the representations as conditions for compliance, in order to reduce the required paperwork. The purpose of the proposed amendments is to make these positions, previously set forth in various staff letters, more accessible and more widely understood.

The proposed rule amendments will be published in the Federal Register with a 60-day comment period. Copies may be obtained by contacting the Commission’s Office of the Secretariat, Three Lafayette Centre, 1155 21^st Street, N.W., Washington, D.C. 20581, (202) 418-5100 or by accessing the Commission’s website, www.cftc.gov.

Media Contacts
Alan Sobba (202) 418-5080
R. David Gary (202) 418-5085
Office of External Affairs

Related Document
Federal Register