CFTC opens access to Indian Futures market for U.S. customers
The Commodity Futures Trading Commission (CFTC) issued an order to the National Stock Exchange of India (NSE) as part of its longstanding program of regulatory deference to foreign regulatory frameworks. Through its Part 30 exemptive program the CFTC provides U.S. customers with increased access to foreign futures markets.
The CFTC began the Part 30 exemptive program nearly three decades ago and has expanded relief to 12 jurisdictions in South America, Europe, Asia and Australia. Currently, over 120 foreign brokers across the globe are authorized to deal directly with U.S. futures customers, resulting in more efficient and less costly transactions.
“I believe the global nature of derivatives markets calls for an international perspective,” said CFTC Chairman J. Christopher Giancarlo. “Regulators must take a cooperative approach to pursuing market integrity and customer protection. And, we must keep in mind that cross-border competition, growth, and innovation are stifled if we impose piecemeal or inconsistent regulatory requirements. That is why the optimal approach to reconcile these considerations is deference to comparable foreign regulatory regimes. Through this order, the CFTC is once again seeking to lead by example, and I look to authorities in other jurisdictions to demonstrate a similar commitment to regulatory deference and support for market-led activity taking place across international markets.”
The order issued to NSE permits its members to accept U.S. customer funds directly for the purpose of trading in futures and options contracts on NSE without the members having to register with the CFTC as a futures commission merchant. The relief is based on the finding by the CFTC that the local laws and regulations in India applicable to NSE members provide a comparable level of customer protection, including licensing standards, minimum financial requirements, and robust compliance programs. Similar to other recipients of relief, NSE must promptly notify the CFTC of any material changes to its local laws and regulations. In support of NSE’s petition for relief, the Securities and Exchange Board of India has committed to providing information to CFTC related to NSE transactions upon request.
The order will be published in the Federal Register and the relief is effective as to each foreign firm upon the filing of certain representations with the National Futures Association.