The U.S. Commodity Futures Trading Commission (CFTC) issued a Statement of Policy that:
- affirms the use of the staff no-action process for foreign boards of trade (FBOT) that seek to provide direct access to their electronic trading systems;
- provides transparency and guidance with regard to the scope of review; and,
- adds certain enhancements concerning information sharing and the appropriate response to trading that may adversely affect U.S. markets or the CFTC’s supervisory responsibilities.
CFTC Chairman Reuben Jeffery III stated:
By issuing this Statement of Policy, the CFTC makes clear its continuing commitment to policies that foster customer and market protection objectives, while responding flexibly to the demands by market users for access to global markets and products.
Such a pragmatic and dynamic approach is particularly appropriate during a period of intense global competition, technological innovation, and changing ownership structures.
The issuance of the Statement of Policy follows a recent public hearing (see 71 FR 30665, May 30, 2006; corrected at 71 FR 32059, June 2, 2006) and request for comment (see 71 FR 34070, June 13, 2006) that considered the advisability of developing threshold criteria that might be used to define whether the board of trade was located outside the United States and thereby eligible for issuance of a no-action letter. The CFTC intends that its Statement of Policy will ensure the consistent treatment of requests and the application of an appropriate degree of review, while maintaining the ability to respond flexibly to the individual factual circumstances raised by particular requests by FBOTs to provide direct access to their trading systems.
