On August 13, the Hong Kong Securities and Futures Commission (HKSFC) issued a circular describing the application procedure for certain licensed corporations to deal directly with customers in the United States pursuant to Commodity Futures Trading Commission Regulation 30.10. As reported in the March 20 edition of Corporate & Financial Weekly Digest, the CFTC issued an order permitting HKSFC-licensed corporations to deal directly with US customers for trading on any exchange subject to HKSFC’s oversight without having to register with the CFTC as future commission merchants.
To be eligible for the exemption, the licensed corporation must: (1) be licensed by HKSFC for regulated futures activity (Type 2-licensed corporation); (2) trade on behalf of customers in Hong Kong and intend to trade on behalf of customers in the United States; and (3) be located outside of the United States. A licensed corporation interested in obtaining the exemption pursuant to the CFTC Regulation 30.10 order must submit to HKSFC an application letter addressed to the National Futures Association (NFA) and an agency agreement signed by both the licensed corporation and its appointed agent for service of process in the United States. The licensed corporation is also required to provide written representations and certifications to HKSFC and NFA. Upon receipt of the application, HKSFC will notify the CFTC and forward the application package to NFA. Pending NFA’s approval, HKSFC will notify the licensed corporation of exemptive relief.
Licensed corporations granted relief pursuant to the CFTC Regulation 30.10 order are required to notify HKSFC and NFA of any material changes to any of the representations made in or in support of the application for exemptive relief.
HKSFC’s circular, which includes templates for certain application materials, is available here.