CFTC issues exemption to the HKSFC permitting US customers to deal directly with HK brokers
The US Commodity Futures Trading Commission (CFTC) has issued an order to Hong Kong Securities and Futures Commission (HKSFC) permitting US customers to deal directly with HKSFC-licensed brokers.
The exemption, which follows similar exemptions granted to other foreign exchanges or foreign regulators pursuant to Commission Regulation 30.10, means that licensed brokers will no longer need to register with the CFTC as futures commission merchants (FCMs).
The order has been submitted to the Federal Register to be published and the relief is effective as to each foreign firm upon the filing of certain representations with the National Futures Association.
Orders issued by the Commission pursuant to Regulation 30.10 allow firms located in certain foreign jurisdictions to deal directly with US customers on non-US markets without having to comply with certain requirements set forth in the Commodity Exchange Act and CFTC regulations, including the requirement to register with the Commission as a FCM. These foreign firms are permitted to do so because they are subject to comparable customer protection standards in their home jurisdiction. The criteria for the CFTC’s review of foreign standards are set forth in an Interpretative Statement contained in Appendix A to Part 30 of the CFTC’s regulations.