For Release: August 2, 2000
CFTC Adopts Amendments to Part 30 of Its Rules
Significantly the Ability of U.S. Persons to Place Foreign
Futures and Foreign Options Orders
Washington -- The Commodity Futures Trading Commission (Commission) has adopted amendments to Part 30 of its rules governing the offer and sale of foreign futures and options contracts to U.S. customers. The amendments to Part 30 will clarify the circumstances under which an unregistered foreign futures and options broker (FFOB) may accept and execute foreign futures and options contracts placed directly from certain U.S. customers without having to register with the Commission as either a futures commission merchant (FCM) or an introducing broker. The amendments will expand significantly the ability of U.S. persons to place orders directly with FFOBs without having to sacrifice the global clearing services provided by a single U.S. FCM.
Prior to the adoption of rule 30.12 and subject to certain terms and conditions, only foreign affiliates of U.S. FCMs were permitted to accept directly foreign futures and foreign options orders. Under rule 30.12, all FFOBs that either are affiliates of a U.S. FCM or subject to regulation in the jurisdiction in which they are located may accept orders directly from certain sophisticated U.S. customers, known as "authorized customers," provided that the U.S. FCM carrying the authorized customer's account satisfies certain procedural safeguards and remains well-capitalized. Pursuant to the new rule, an authorized customer will be able to place an order directly with an FFOB who either carries the FCM's customer omnibus account, or transfers the trade pursuant to a give-up arrangement to the FFOB that carries the FCM's customer omnibus account, without requiring either FFOB to obtain an exemption from registration under rule 30.10.
In addition to adopting rule 30.12, the Commission adopted amendments to rules 30.1 to include definitions for certain terms cited within rule 30.12. Specifically, rules 30.1(d) and (e) define "foreign futures and options customer omnibus account" and "foreign futures and options broker," respectively.
The final rule and rule amendments were published in the Federal Register on August 2, 2000, and will become effective on September 1, 2000. Copies of the final rule and rule amendments may be obtained by contacting the Commission's Office of the Secretariat, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, (202) 418-5100, or by accessing the Commission's website, http://www.cftc.gov/foia/fedreg00/foi000802a.htm