Part 30 of the Commission's regulations governs the offer and sale of foreign futures and options contracts to customers located in the U.S. These regulations are designed to carry out Congress’s intent that foreign futures and foreign options products offered or sold in the U.S. be subject to regulatory safeguards comparable to those applicable to domestic transactions.
As set forth in CFTC Regulation 30.4, any domestic or foreign person engaged in activities like those of a futures commission merchant (FCM), introducing broker (IB), commodity pool operator (CPO), or commodity trading advisor (CTA) must register in the appropriate capacity or seek an exemption from registration under CFTC Regulation 30.5 or CFTC Regulation 30.10.
Regardless of any relief from the registration requirement, all persons are subject to the antifraud provisions of CFTC Regulation 30.9.
CFTC Regulation 30.5 provides an exemption for registration for any person located outside of the U.S. who is required to be registered with the Commission under Part 30 other than a person required to be registered as a FCM.
CFTC Regulation 30.5 generally requires a firm seeking an exemption to file a petition for relief with the National Futures Association (NFA) through the NFA’s Online Registration System. The petitioner must, among other things, provide background and fitness information, consent to the jurisdiction of the U.S. courts and the CFTC with respect to its dealings with U.S. customers, and engage in all transactions subject to regulation under Part 30 through a registered FCM or foreign broker who has received confirmation of exemption from registration as a FCM under CFTC Regulation 30.10.
Notwithstanding any relief granted pursuant to CFTC Regulation 30.5, all non-U.S. persons acting in a manner similar to CTAs and CPOs must provide U.S. customers with the risk disclosures set forth in CFTC Regulation 30.6.
CFTC Regulation 30.10 permits a person affected by any of the requirements contained in Part 30 of the Commission’s regulations to petition the Commission for an exemption from such requirements. A petition for exemption pursuant to CFTC Regulation 30.10 is typically filed on behalf of persons located and doing business outside the U.S. that seek access to U.S. customers by:
1. a governmental agency responsible for implementing and enforcing the foreign regulatory program; or
2. a self-regulatory organization (SRO) of which such persons are members.
If the CFTC determines that compliance with the foreign jurisdiction’s regulatory program would offer comparable protection to persons located in the U.S. as would be the case if the foreign firm complied with the U.S. regulatory system, and there is an information sharing agreement between the Commission and the firm’s home country regulator, the CFTC will issue an order to the foreign regulator or SRO granting general relief, subject to certain conditions.
Individual firms seeking confirmation of that relief must then make certain representations set forth in the CFTC Regulation 30.10 order issued to the foreign regulator or SRO. A more detailed discussion of the CFTC Regulation 30.10 application process and its required representations and conditions, as well as guidance from the Division of Clearing and Intermediary Oversight (DCIO) on the materials and information to be provided, is found in:
Unless they are granted relief granted pursuant to CFTC Regulation 30.10, domestic and foreign persons acting in a manner similar to FCMs generally must comply with the secured amount requirement under CFTC Regulation 30.7. CFTC Regulation 30.7 requires FCMs who accept money, securities, or property from U.S. customers to maintain in a separate account or accounts such money, securities, and property in an amount at least sufficient to cover or satisfy all of its current obligations to those customers. A more detailed discussion of the CFTC Regulation 30.7 secured amount requirement is found in Appendix B to Part 30.
The CFTC delegated to the National Futures Association the authority to confirm relief for firms applying for relief pursuant to CFTC Regulation 30.10, 70 Fed. Reg. 2621 (Jan. 14, 2005).
For information on how to apply for Part 30 relief, contact DSIO. For information on firms that are exempt from registration, or for firms seeking confirmation that CFTC Regulation 30.10 relief applies to the firm, contact the NFA Information Center, between 8 a.m. and 5 p.m. CST at 800-621-3570 or 312-781-1410, or by email.