CFTC approves final rule on foreign boards of trade

The Commodity Futures Trading Commission (CFTC) approved final rules amending part 48 of its regulations that relate to foreign boards of trade (FBOT).

Specifically, the final rule permits a foreign board of trade (FBOT), registered with the CFTC, to provide direct access to its electronic trading and order matching system to an introducing broker (IB), located in the United States and registered with the CFTC.

This would be for the submission of customer orders to the FBOT’s trading system for execution.

The final rules also establish a procedure for an FBOT to request revocation of its registration and remove certain outdated references to “existing no-action relief” in Part 48.

CFTC Commissioner Carolina Pham said the amended regulation promotes access to markets for U.S. participants, competition, and liquidity.

“As a CFTC Commissioner, I have made it clear that I believe in good policy that enables growth, progress, and access to markets. Accordingly, I am pleased to support Commission efforts that take a pragmatic approach to issues that hinder market access and cross-border activity,” Pham said, “I continue to believe that this rulemaking exemplifies policy that ensures a level playing field, and I applaud this step in the right direction for market structure.”

Pham added that FBOTs have been a critical piece of the CFTC’s markets, providing access for U.S. market participants to non-U.S. markets.

“I believe that the FBOT Final Rule will provide more choice in brokers and broker arrangements for U.S. market participants that trade foreign futures and ensure that appropriate customer protections are in place,” Pham said.

The final rules are effective 30 days from the date of publication in the Federal Register.

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