January 13, 2016
CFTC Orders Otkritie Capital International, Ltd. to Pay a $140,000 Civil Monetary Penalty for Violating a CFTC Registration Regulation
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Otkritie Capital International, Ltd. (OCI), a London-based corporate and institutional financial services company, for violating CFTC Regulation 30.4, by permitting two of its U.S. customers to trade futures and options in foreign markets while not registered as a Futures Commission Merchant (FCM), or pursuant to a Regulation 30.10 exemption.
The CFTC Order requires OCI to pay a $140,000 civil monetary penalty and to cease and desist from further violating CFTC Regulation 30.4, as charged.
As stated in the Order, in 1987, the CFTC adopted Part 30 of the General Regulations Under the Commodity Exchange Act to govern the offer and sale to U.S. persons of futures and options contracts entered into on, or subject to the rules of, a foreign board of trade. Part 30 was promulgated pursuant to Sections 2(a)(1)(A), 4(b), and 4(c) of the Commodity Exchange Act (CEA), which vest the CFTC with exclusive jurisdiction over the offer and sale in the United States of options and futures contracts traded on or subject to the rules of a board of trade, exchange, or market located outside of the United States.
Regulation 30.4(a) provides, in relevant part, that “it shall be unlawful for any person, with respect to a foreign futures or foreign options customer: (a) to solicit or accept orders for or involving any foreign futures contract or foreign options transaction and, in connection therewith, to accept any money…unless such person shall have registered as an FCM. Further, certain foreign futures and options brokers are not required to register as an FCM if they meet the exemptions listed in Regulation 30.10.
The Order finds that from in or about June 2010 to October 2013, OCI solicited and accepted orders, and accepted funds from U.S. firms involving foreign futures contracts or foreign options transactions without being registered as an FCM. Moreover, OCI did not meet the exemptions set out in Regulation 30.10. Thus, OCI violated Regulation 30.4 by permitting two of its U.S. customers to trade futures and options in foreign markets while not registered as an FCM, or pursuant to a Regulation 30.10 exemption.
The Order recognizes OCI’s significant cooperation with the CFTC during the investigation of this matter.
The CFTC Division of Enforcement staff members responsible for this matter are James H. Holl, III, Dan Jordan, and Rick Glaser.
Last Updated: January 13, 2016