Pursuant to Part 48 of the Commission’s regulations, foreign boards of trade that wish to permit identified members and other participants located in the U.S. with direct access to their electronic trading and order matching system must apply for and receive an Order of Registration pursuant to the procedures contained in Part 48. Application forms for an Order of Registration for the foreign board of trade and its associated clearing organization may be found here: Application forms. Applications for registration must be filed electronically with the Secretary of the Commission at FBOTapplications@cftc.gov.
A foreign board of trade must apply for registration and be registered to permit members and other participants of the foreign board of trade that are located in the U.S. to enter trades directly into the trading and order matching system of the foreign board of trade. A registered foreign board of trade may permit members or other participants to enter orders by direct access to the extent such members and other participants are:
1. Entering orders for the member’s or other participant’s proprietary accounts;
2. Registered with the Commission as futures commission merchants and submitting customer orders to the trading system for execution; or
3. Registered with the Commission as a commodity pool operator or commodity trading advisor, or exempt from such registration pursuant to Commission regulation 4.13 or 4.14, and submitting orders for execution on behalf of a U.S. pool that the member or other participant operates or an account of a U.S. customer for which the member or other participant has discretionary authority, respectively, provided that a futures commission merchant or a firm exempt from such registration pursuant to Commission regulation 30.10 acts as clearing firm and guarantees, without limitation, all such trades of the commodity pool operator or commodity trading advisor effected through submission of orders to the trading system.
In reviewing an application for registration, Commission staff examines, among other things, whether the foreign board of trade and its clearing organization are subject to comprehensive supervision and regulation by the appropriate governmental authorities in their home country or countries that is comparable to the comprehensive supervision and regulation to which designated contract markets and derivatives clearing organizations are respectively subject under the Act, Commission regulations, and other applicable U.S. laws and regulations, if any. Commission staff also reviews information included in the application about the foreign board of trade generally, as well as detailed information submitted to demonstrate compliance with the registration requirements contained in Commission regulation 48.7 with respect to:
1. foreign board of trade and clearing membership;
2. the automated trading system;
3. the terms and conditions of contracts proposed to be made available in the U.S.;
4. settlement and clearing;
5. the regulatory regime governing the foreign board of trade and the clearing organization;
6. the rules of the foreign board of trade and clearing organization and enforcement thereof; and
7. information sharing agreements among the Commission, the foreign board of trade, and the foreign board of trade’s regulatory authority.
When issued, an Order of Registration requires that the registered foreign board of trade and clearing organization continue to comply with the registration requirements and with applicable conditions of registration described in Commission regulation 48.8.
For further information, contact the Division of Market Oversight.