Release: #3893-96

For Release: March 4, 1996

CFTC's Trading & Markets Division Authorizes the DTB to Install and Utilize Computer Terminals in the United States

WASHINGTON -- In the Commodity Futures Trading Commission's (CFTC) first consideration of a request to place computer terminals of an off-shore exchange in the United States, the CFTC's Division of Trading & Markets (Division) on February 29th issued a no-action letter which authorizes the Deutsche Terminbrse (DTB) to install and utilize DTB computer terminals in the United States in connection with the purchase and sale of certain futures and options contracts.

The DTB is an automated futures and options exchange located in Frankfurt, Germany, and has been in operation since 1990. It is currently the seventh largest futures and options exchange in the world in terms of volume and the second largest futures and options exchange in Europe.

Initially, the use of the DTB terminals in U.S. locations will be limited to placement of principal trades on behalf of DTB members. The Division's authorization also permits any DTB member who registers with the CFTC as a futures commission merchant to use the terminals in order to place trades on DTB products on behalf of U.S. customers, so long as the DTB products are authorized for sale to U.S. persons.

In the no-action position, the Division stated that the CFTC has taken the view that the mere presence of terminals in the United States would not cause the Commission to deem any bona fide foreign exchange for which products are listed through that system to be a domestic exchange. In making a determination on the particular facts and circumstances presented, the Division took into consideration various factors, including the fact that the DTB is subject to oversight by German regulatory agencies, and the existence of relevant information sharing agreements between the BAWe and the CFTC.

Moreover, the Division's authorization is subject to numerous conditions, including provisions that permit the CFTC and National Futures Association (NFA) to obtain prompt access to the books and records of DTB members with terminals in the United States, a requirement that DTB members taking advantage of the Division's authorization identify themselves to the CFTC and the NFA, and that the DTB would provide the CFTC with information reflecting the volume of trades originating from U.S.-based computer terminals.

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