CFTC Approves Amendments to Part 30.10 of the CFTC Regulations

The Commodity Futures Trading Commission (CFTC) has confirmed an amendment to part 30.10 of the CFTC regulations which oversees the sale of non-US based futures and options contracts to customers located within the United States.

For over 30 years the CFTC has provided the platform for foreign based participants to gain access to U.S. customers through direct access, providing there is an equivalent or comparable regulatory oversight. If, however, a foreign regulator was to request exemption under part 30.10 on behalf of its foreign broker(s) located within its jurisdiction, then they must “set forth, with particularity, the comparable laws and regulations applicable in the jurisdiction in which that person is located”.

Subsequently, following a unanimous vote, the CFTC has the right to terminate the exemptive relief where it believes necessary. This may be due to asymmetrical or a deficiency in reciprocal deference by a foreign regulator (or regulatory regime) in relation to the execution or clearing of any particular commodity interest within the CFTC’s jurisdiction.

CFTC Chairman Heath P. Tarbert said: “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,

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