CFTC revises policy on listing of new futures and option contracts by FBOTs

The notice, which applies to listings that have received staff no-action relief to provide direct access to their automated trading systems from locations in the United States, provides that a FBOT must notify the Division of Market Oversight ten business days prior to offering such contracts, The FBOT can then list the contracts for trading ten business days after the date the Commission receives the notification, unless Commission staff notifies the FBOT that additional time is needed to complete a review of any regulatory issues pertinent to the additional contracts. This includes the need for enhanced market surveillance or additional information sharing.

In its notification, a FBOT need only submit a copy of the initial terms and conditions of the additional contracts and a certification that it is in compliance with the terms and conditions of its no-action letter and that the additional contracts will be traded in accordance with those terms and conditions.

The notification procedure does not apply to futures and option contracts that are covered by section 2(a)(1)(C)(ii) of the Commodity Exchange Act, which delineates jurisdiction between the Securities and Exchange Commission and the Commission for certain products. FBOTs are still required to seek and receive written supplemental no-action relief from Commission staff prior to offering these contracts through US-located trading systems.