CFTC Press Release 4595-02

Release: 4595-02
For Release: January 14, 2002

CFTC Recognizes Norwegian Clearinghouse for OTC Derivatives

Washington, D.C. -- The Commodity Futures Trading Commission (CFTC) has determined that the multilateral clearing activities of NOS Clearing ASA (NOS) are subject to appropriate foreign supervision. NOS is a Norwegian clearinghouse which clears and settles trades on the International Maritime Exchange (IMAREX), an electronic trading facility for cash-settled futures contracts for the transportation of maritime freight. The Commission’s Order permits NOS to now clear and settle trades by U.S. persons on IMAREX.

IMAREX operates pursuant to an exemption provided by the Commodity Exchange Act (CEA) for electronically-executed principal-to-principal trades in certain commodities among eligible commercial entities. This exemption, set forth in new section 2(h)(3), was added to the CEA by the Commodity Futures Modernization Act of 2000 (CFMA).

This Order is the first action taken pursuant to new section 409 of the Federal Deposit Insurance Corporation Improvement Act, which was added by the CFMA. Section 409 provides that a multilateral clearing organization for over-the-counter derivative instruments (MCO) such as NOS may operate in the U.S. if, among other alternatives, the MCO is supervised by a foreign financial regulator that the Commission, or one of several other U.S. financial regulators, has determined satisfies appropriate standards.

NOS’s clearing activities are supervised by the Norwegian Banking, Insurance and Securities Commission (BISC). The Commission reviewed BISC’s oversight in view of both internationally-accepted standards developed by the International Organization of Securities Commissions and the fourteen core principles set forth in the CEA, as amended by the CFMA, for firms registered with the Commission as derivatives clearing organizations. BISC has represented that it will share with the Commission information on NOS’s clearing activities.

Copies of the Order may be obtained from the Commission's Office of the Secretariat at Three Lafayette Centre, 1155 21^st Street, N.W., Washington, D.C. 20581, (202) 418-5100.

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