Federal Register: Registration of Foreign Boards of Trade
|FINAL RULE: This page refers to the proposed rulemaking on Foreign Boards of Trade (FBOTs). The CFTC final rule was issued at its December 5, 2011 open meeting.|
|Final Rule Issue||Effective Date||Compliance Date|
|December 23, 2011||February 21, 2012||August 20, 2012|
On November 10, 2010, the Commodity Futures Trading Commission (CFTC) held its fourth in the series of open meetings to consider the issuance of proposed rulemakings under the Dodd-Frank Act. One of the agenda items was a proposed rule regarding the registration of foreign boards of trade.<ref>Open Meeting on Fourth Series of Proposed Rules under the Dodd-Frank Act. CFTC. Retrieved on March 7, 2011.</ref>
Prior to this rulemaking, Foreign Boards of Trade (FBOTs)-- non-U.S. based financial entities involved in the listing, clearing, and other activities traditionally associated with exchanges -- have been allowed to seek relief from registering with the CFTC. The process involves applying to commission staff to receive a "No Action" letter. The requirements and conditions have been developed through experience gained from reviewing applications to determine, in general, if the regulators in the FBOT's home country "supports and enforces regulatory objectives that are substantially equivalent to those supported and enforced by the CFTC."
The Dodd-Frank Act permits the commission to issue rules requiring registration of FBOTs, especially FBOTs seeking "direct access" to their trading platforms from the U.S.
This proposed rule:
- Replaces the "no-action" letter process with a mandatory registration system;
- Details the necessary criteria to be met for registration, including trading system, contracts, settlement and clearing, regulatory authorities, rules and rule enforcement, and information sharing.
- Details the conditions for annual retention of registration, including real time, quarterly and annual reporting obligations;
- Identifies the types of entities to which a registered FBOT could grant direct access, such as members with proprietary accounts, futures commission merchants (FCMs), commodity trading advisors (CTAs), and commodity pool operators (CPOs); and
- Identifies reasons for which and FBOT's registration could be revoked.
Related Documents: Fact Sheet, Q&A, and Rule Proposal as it Appeared in the Federal Register