[Federal Register: September 4, 2007 (Volume 72, Number 170)]
[Rules and Regulations]
[Page 50645-50647]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04se07-3]
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COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 30
Foreign Futures and Options Transactions
AGENCY: Commodity Futures Trading Commission.
ACTION: Amended Supplemental Order for Expanded Relief.
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SUMMARY: The Commodity Futures Trading Commission (``Commission'') is
issuing an Amended Supplemental Order authorizing members of Singapore
Derivatives Trading Ltd (``SGX''), formerly known as Singapore
International Monetary Exchange Ltd (``SIMEX''), to solicit and accept
orders from U.S. customers for otherwise permitted transactions on all
non-U.S. exchanges where such members are authorized by the laws of
Singapore to conduct futures business for customers. The Amended
Supplemental Order is issued pursuant to Commission Regulation 30.10,
which permits the Commission to grant an exemption from certain
provisions of Part 30 of the Commission's regulations, and supersedes
the Commission's prior Supplemental Order dated September 9, 1999.
EFFECTIVE DATE: September 4, 2007.
FOR FURTHER INFORMATION CONTACT: Lawrence B. Patent, Deputy Director,
or Andrew Chapin, Special Counsel, Division of Clearing and
Intermediary Oversight, at (202) 418-5430, Commodity Futures Trading
Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington,
DC 20581. Electronic mail: lpatent@cftc.gov or achapin@cftc.gov.
SUPPLEMENTARY INFORMATION: The Commission has issued the following
Order:
Amended Supplemental Order Granting Expanded Relief Pursuant to
Commission Regulation 30.10 for Otherwise Permitted Transactions on All
Non-U.S. Exchanges Where Firms Designated by the Singapore Derivatives
Trading Ltd Are Authorized by Exchange Regulations To Conduct Futures
Business for Customers, Subject to Certain Conditions
On December 30, 1988, the Commission issued an Order granting
relief under Regulation 30.10 authorizing designated members of SGX to
solicit and accept orders from customers located in the U.S. for
otherwise permitted transactions on the Exchange.\1\ On September 9,
1999, the Commission issued a Supplemental Order expanding the relief
to include otherwise permitted transactions on Eurex Deutschland.\2\ By
letter dated November 30, 2006, SEL petitioned the Commission on behalf
of SGX to amend the Supplemental Order to permit members designated by
SGX to solicit and accept orders from foreign futures and options
customers \3\ for otherwise permitted transactions on all non-U.S.
exchanges \4\ where Exchange Members are authorized by Singapore law to
conduct futures and options business for customers, subject to SGX and
SGX Members' continued compliance with the terms of the Original Order
and with certain specified conditions.\5\
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\1\ 54 FR 806 (January 10, 1989) (``Original Order'').
\2\ 64 FR 50248 (September 16, 1999) (``Supplemental Order'').
In December 1999, SIMEX merged with the Stock Exchange of Singapore
to form a holding company named the Singapore Exchange Limited
(``SEL''). SIMEX was renamed SGX and currently operates two
exchanges as a wholly-owned subsidiary of SEL. The first market,
called SGX-DT, is dedicated to trading financial futures and option
contracts. The second market, called JADE, is the result of a joint
venture with the Chicago Board of Trade, Inc., to trade commodity
futures and option contracts.
\3\ The term ``foreign futures or foreign options customer''
means any person located in the U.S., its territories or
possessions, who trades in foreign futures or foreign options.
\4\ The term ``non-U.S. exchange'' refers to a foreign board of
trade which is defined in Commission Regulation 1.3(ss), 17 CFR
1.3(ss) as: Any board of trade, exchange or market located outside
the United States, its territories or possessions, whether
incorporated or unincorporated, where foreign futures or foreign
options transactions are entered into. Thus, contracts that are
traded on a market that has been designated as a contract market
pursuant to section 5 of the Commodity Exchange Act (``Act'') are
not within the scope of this Order.
\5\ Letter dated November 30, 2006, from Arul Ramiah, Head,
Regulatory Policy for SEL, to Ananda K. Radhakrishnan, Director,
Division of Clearing and Intermediary Oversight.
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On occasion, the Commission has issued Regulation 30.10 orders and/
or supplemental orders that permitted members of an exchange with
confirmation of Regulation 30.10 relief to trade on behalf of U.S.
customers on other authorized or designated exchanges outside the
jurisdiction of the Regulation 30.10 recipient.\6\ To ensure that U.S.
customers receive adequate protection for transactions intermediated by
non-U.S. persons on or subject to the rules of a foreign exchange
located outside the jurisdiction of a Regulation 30.10 recipient, the
Commission requires the jurisdiction to which the Regulation 30.10
order is directed to demonstrate that such transactions will be
regulated as if they were executed on an exchange located within the
recipient's jurisdiction.\7\ To make this demonstration, the Regulation
30.10 recipient must: (1) Prohibit its regulatees or members from
intermediating otherwise permitted transactions for U.S. customers on
unapproved foreign exchanges as set
[[Page 50646]]
forth under local law, and must specify which exchanges are authorized
by local law; (2) represent that regulatees or member firms with U.S.
customers will comply with all the terms and conditions of the original
Regulation 30.10 Order with respect to transactions entered into on or
subject to the rules of a foreign exchange located outside its
jurisdiction; and (3) confirm that it has the authority and the ability
to enforce its laws, rules and/or regulations with respect to those
transactions to the same extent that it conducts such activities on an
exchange located within its jurisdiction. The Regulation 30.10
recipient also should specify in its application if there does not
exist a specific statute or regulation setting forth a list of
authorized or recognized exchanges.\8\
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\6\ See, e.g., 71 FR 40395 (July 17, 2006) (authorizing members
of the Sydney Futures Exchange (``SFE'') to solicit and accept
orders from U.S. customers for otherwise permitted transactions on
all non-U.S. and non-Australian exchanges where such members are
authorized by the regulations of the SFE to conduct futures business
for customers).
\7\ 64 FR at 50251.
\8\ Id. at n.20. See, e.g., 67 FR 30785 (May 8, 2002)
(authorizing members of Eurex Deutschland (``Eurex'') to solicit and
accept orders from U.S. customers for otherwise permitted
transactions on all non-U.S. exchanges where such members are
authorized by Eurex regulations and German law to conduct futures
business for customers).
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Upon due consideration, the Commission has determined to issue this
Amended Supplemental Order permitting SGX Members to which Regulation
30.10 relief has been confirmed by the Commission or by the National
Futures Association (``NFA'') to solicit and to accept orders from U.S.
customers for otherwise permitted transactions in commodity futures and
commodity options (including options on futures) on or subject to the
rules of any non-U.S. exchange where such members are authorized by the
laws of Singapore to conduct futures business for customers.
The expanded Regulation 30.10 relief provided under this Amended
Supplemental Order, however, is contingent on the SGX members'
continued compliance with the Original Order, and the SGX's and SGX
Members' compliance with the following conditions:
(1) SGX will carry out its compliance, surveillance and rule
enforcement activities with respect to solicitations and acceptance
of orders by designated Exchange Members of U.S. customers for
futures and options business on all non-U.S. exchanges where such
members are authorized by the laws of Singapore to conduct futures
business for customers to the same extent that it conducts such
activities in regard to SGX business;
(2) SGX will cooperate with the Commission with respect to any
inquiries concerning any activity which is the subject of this
Amended Supplemental Order, including sharing the information
specified in Appendix A to the Part 30 regulations, 17 CFR Part 30,
on an ``as needed basis,'' on the same basis as set forth in the
Original Order;
(3) Each SGX Member firm confirmed for relief under the Original
Order seeking to engage in activities that are the subject of this
Amended Supplemental Order must agree to provide the books and
records related to such activities required to be maintained under
the applicable SGX rules and laws in effect in Singapore on the same
basis as set forth in the Original Order;
(4) SGX members who apply for confirmation of Regulation 30.10
relief with the National Futures Association must provide and
maintain a list of the foreign exchanges where they intend to engage
in transactions on behalf of U.S. customers pursuant to relief
granted by this Amended Supplemental Order and must agree to abide
by the terms and conditions of the Original Order; and
(5) SGX will continue to comply with the terms of the Original
Order with respect to transactions effected for U.S. customers on
SGX.
As set forth in the Commission's September 11, 1997 Order
delegating to NFA certain responsibilities, the written representations
set forth above shall be filed with NFA.\9\ Specifically, SGX Members
applying for confirmation of Regulation 30.10 relief subsequent to the
issuance of this Amended Supplementary Order must submit
representations to NFA consistent with condition (3) of this Order, and
the list of foreign exchanges required by condition (4), as well as
representations required by the Original Order. SGX Member firms that
currently operate under the Original Order will be deemed to have
consented to condition (3) by effecting transactions pursuant to this
Amended Supplemental Order. Each firm seeking relief hereunder has an
ongoing obligation to notify NFA should there be a material change to
any of the representations required in the firm's application for
relief, including any change in the list of foreign exchanges referred
to in condition (4).
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\9\ 62 FR 47792, 47793 (September 11, 1997).
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The expanded Regulation 30.10 relief provided by this Amended
Supplemental Order remains subject to the existing product restrictions
under the Act and Commission regulations thereunder including those
related to stock indices, foreign government debt and foreign security
futures products.\10\ The expanded Regulation 30.10 relief provided
under this Amended Supplemental Order also is contingent upon the
continued compliance by the Monetary Authority of Singapore (``MAS'')
with the terms and conditions of the information sharing arrangement
with the Commission regarding the Regulation 30.10 activities of the
SGX members.\11\
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\10\ See, e.g., Sections 2(a)(1)(C), (D) and (E) of the Act.
\11\ Letter from Neo Boon Sim, Head, Market and Clearing Houses
Division, MAS, to Ananda K. Radhakrishnan, Director, Division of
Clearing and Intermediary Oversight, dated June 11, 2007. The
Commission signed a bilateral Memorandum of Understanding (``MOU'')
with MAS on May 16, 2000 concerning Consultation, Co-operation and
the Exchange of Information (concluded jointly with the U.S.
Securities and Exchange Commission). In addition, MAS also is a
signatory to the IOSCO Multilateral MOU.
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This Amended Supplemental Order is issued based on the information
provided to the Commission and its staff. Any changes or material
omissions may require the Commission to reconsider the authorization
granted in this Amended Supplemental Order.
List of Subjects in 17 CFR Part 30
Commodity Futures, Commodity Options, Foreign Futures and Options.
0
Accordingly, 17 CFR part 30 is amended as set forth below:
PART 30--FOREIGN FUTURES AND FOREIGN OPTIONS TRANSACTIONS
0
1. The authority citation for part 30 continues to read as follows:
Authority: 7 U.S.C. 1a, 2, 4, 6, 6c and 12a, unless otherwise
noted.
Appendix C to Part 30--Foreign Petitioners Granted Relief From the
Application of Certain of the Part 30 Rules Pursuant to Sec. 30.10
* * * * *
0
2. The citation ``Firms designated by the Singapore International
Monetary Exchange Limited'' is to be revised as follows:
Firms designated by the Singapore Derivatives Trading Limited.
* * * * *
FR date and citation: [insert date of this release], 72 FR
[insert number of page on which this release begins].
* * * * *
0
3. The following citations are to be added:
Firms designated by the Taiwan Futures Exchange.
FR date and citation: March 28, 2007, 72 FR 14413.
Firms designated by the Tokyo Commodity Exchange.
FR date and citation: February 9, 2006, 71 FR 6759.
Firms designated by the Bolsa de Mercadorias & Futuros.
FR date and citation: July 8, 2002, 67 FR 45056.
Firms designated by Eurex Deutschland.
FR date and citation: May 8, 2002, 67 FR 30785.
[[Page 50647]]
Issued in Washington, DC on August 24, 2007.
David Stawick,
Secretary of the Commission.
[FR Doc. E7-17195 Filed 8-31-07; 8:45 am]
BILLING CODE 6351-01-P