FIA “Strongly Supports” Proposed CFTC Exemption for Foreign Brokers

by Futures Industry Associations 27 Feb 20:29

Washington—Feb. 27, 2008—The FIA has filed a comment letter with the Commodity Futures Trading Commission saying it “strongly supports” a proposed exemption from the CFTC’s registration requirements for foreign brokers that are affiliated with U.S. futures commission merchants. The proposed exemption, which was requested by the FIA Law & Compliance Division, “has become increasingly important to FCMs and their affiliates as their institutional customers extend their trading activities to a growing number of international markets,” the FIA letter said. As explained in the letter, the proposed exemption would codify several no-action letters adopted by the CFTC’s Division of Clearing and Intermediary Oversight, “pursuant to which foreign affiliates of certain U.S. FCMs have been authorized to accept orders from U.S. institutional customers for execution on U.S. designated contract markets notwithstanding that such affiliates are not registered with the commission as introducing brokers.” The exemption would be limited to foreign firms that are affiliated with a registered FCM and that already have obtained exemptive relief from the CFTC pursuant to Regulation 30.10. In addition, the foreign firm would not be permitted to solicit any U.S. customers for trading on U.S. markets nor handle any U.S. customer funds for trading on U.S. markets.