For Release: August 23, 2007
CFTC Requests Public Comment on Exemption Request for the China Foreign Exchange Trade System
Washington, DC – The Commodity Futures Trading Commission (CFTC) is requesting public comment on a proposal to allow the China Foreign Exchange Trade System and National Interbank Funding Center (CFETS) to clear for customers domiciled in China foreign currency and interest rate futures transactions, at the Chicago Mercantile Exchange.
CFETS is an affiliate of the People’s Bank of China and operates an electronic system for trading in the inter-bank foreign exchange market, Renminbi lending, and trading on the bond market in China. The CME petitioned the CFTC to request the relief on behalf of CFETS.
If the request is granted, CFETS and its members would be exempted from registration as futures commission merchants (FCMs) but would be required to meet certain financial requirements, along with monthly reporting and record keeping requirements and equivalent large trader reporting.
Section 4(c) of the Commodity Exchange Act (CEA) gives the CFTC the ability to promote responsible economic or financial innovation and fair competition by exempting certain transactions and persons from provisions of the CEA – provided that the exemption is consistent with the public interest. The proposal will be open for public comment for 30 days after its publication in the Federal Register.
R. David Gary
Last Updated: August 23, 2007