On May 17, the Commodity Futures Trading Commission issued an order to the National Stock Exchange of India (NSE) through its Part 30 exemptive program, which affords regulatory deference to foreign regulatory frameworks and provides US customers greater access to certain foreign futures markets. The order allows NSE’s members to directly accept US customer funds to trade in futures and options contracts on NSE without such members being required to register as futures commission merchants with the CFTC, based on substituted compliance with applicable Indian law and the rules of the NSE. The relief is based upon a determination by the CFTC that the local laws and regulations in India relevant to NSE members establish a regulatory framework that is generally comparable to that imposed under the Commodity Exchange Act and CFTC regulations for transactions on US markets. In the event of any material changes to its local laws and regulations, NSE is required to promptly notify the CFTC.
The order will be published in the Federal Register and the relief is effective with respect to each foreign firm upon its filing of certain representations with the National Futures Association (NFA). The CFTC release, together with a link to the order, is available here.