Published On: Fri, Jun 3rd, 2016

CFTC Permits Cleartrade Trading By Direct Access from the US

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Peter Reitz, CEO, EEX Cleartrade

Peter Reitz, CEO, EEX Cleartrade

The U.S. Commodity Futures Trading Commission (CFTC) today issued Orders of Registration to the following Foreign Boards of Trade (FBOT):
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros (BVMF), an FBOT located in São Paulo, Brazil; and

Cleartrade Exchange Pte. Limited (Cleartrade), an FBOT registered in Singapore with offices in Singapore and London. Under their respective Orders, BVMF and Cleartrade are permitted to provide their identified members or other participants located in the U.S. with direct access to their electronic order entry and trade matching system.

The CFTC issued the Orders in accordance with Part 48 of the CFTC’s regulations, which provides that such Orders may be issued to a foreign board of trade that possesses, among other things, the attributes of an established, organized exchange and that is subject to continued oversight by a regulator that provides comprehensive supervision and regulation that is comparable to the supervision and regulation exercised by the CFTC.

BVMF will offer direct access for futures and options contracts based on interest rates, foreign exchange, securities and inflation indices, government bonds, physical commodities and energy. Cleartrade will offer direct access for futures and options on futures contracts on freight, container, iron ore, steel, coal, and fertilizer.

BVMF and Cleartrade submitted applications for registration that included, among other things, representations that their respective regulatory regimes satisfy the requirements for registration in CFTC regulation 48.7. BVMF previously offered direct access pursuant to a no-action letter issued by CFTC staff. Pursuant to CFTC regulation 48.6, this no-action letter was automatically withdrawn upon issuance of BVMF’s Order of Registration.

Upon review of the respective applications, the CFTC has determined that BVMF and Cleartrade have separately demonstrated their ability to comply with the requirements of the applicable CFTC regulations. The terms and conditions applicable to each Order include, among others, that each entity shall comply with CFTC regulation 48.8, Conditions of Registration, and any additional conditions that the CFTC deems necessary and may impose, after appropriate notice and opportunity to respond. Each entity shall also continue to fulfill each of the representations they made in support of their applications for registration.

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