BSE, NSE IFSC, and NZX will be allowed to accept US customer funds directly for trading in futures and options contracts without having to register as futures commission merchants.
The CFTC (Commodity Futures Trading Commission) has granted exemptions from having to register as FCMs (futures commission merchants) to five foreign entities, the regulator announced on Monday (2 November).
The orders were issued under the CFTC’s Part 30 exemptive programme of international cooperation and regulatory deference, which has enabled US investors greater access to foreign futures and options markets where foreign intermediaries are subject to comparable customer protection standards in their home jurisdictions.
“These orders further demonstrate the CFTC’s commitment to international regulatory comity and deference,” said CFTC Chairman Heath Tarbert. “Cooperation among jurisdictions with comparable regimes is essential to fostering a vibrant marketplace.”
The exemptions were granted to the BSE (Bombay Stock Exchange), NSE IFSC (National Stock Exchange International Financial Service Centre), NZX (NZX Limited), MX (Montreal Exchange), and UBS AG (UBS).
The orders issued to BSE, NSE IFSC, and NZX grant exemptive relief on behalf of their respective members, allowing them to accept US customer funds directly for trading in futures and options contracts without having to register with the CFTC as FCMs.
“This will open up more channels to market for customers in the US wanting access to our dairy derivatives market to manage risk in globally-traded dairy commodities,” said NZX Head of Derivatives Nick Morris.
Whole Milk Powder, Skim Milk Powder, Anhydrous Milk Fat, Butter and NZ Milk Price derivatives are traded on the NZX dairy derivatives market.
The order issued to MX amends and consolidates prior exemptive relief granted on behalf of its members to reflect regulatory improvements with respect to the protection of US customer funds.
Swiss bank UBS is the first recipient of exemptive relief issued directly to an FCM.
The orders will be published in the Federal Register and the relief granted to each firm will be effective upon the filing of certain representations with the National Futures Association.