Section 4d of the Commodity Exchange Act;
The Division of Clearing and Intermediary Oversight issued a letter granting no-action relief to permit two foreign affiliates of a U.S. futures commission merchant (“US FCM”) to act as an introducing broker (“IB”) so as to introduce institutional U.S. customers to any registered FCM for purposes of trading U.S. exchange-traded futures and options, without registering as an IB under the Commodity Exchange Act (“Act”). Pursuant to Regulation 30.10, the foreign affiliates have been granted an exemption from registration as an FCM for purposes of offering foreign futures and options to U.S. customers. The Regulation 30.10 relief, however, does not extend to any activities related to trading, directly or indirectly, on U.S. exchanges. The relief was predicated upon, among other conditions, an acknowledgment by US FCM that it will be jointly and severally liable for any violations of the Act or the Commission’s regulations committed by the foreign affiliates in connection with the latter’s handling of orders for U.S. customers for trading of futures and options on U.S. exchanges, including those orders executed by a foreign affiliate and given up to another FCM.