CFTC Proposes Amending Registration Exemptions For Certain Foreign Entities

The CFTC proposed amendments to regulations that concern the conditions under which certain non-U.S. entities acting in the capacity of futures commission merchants ("FCMs"), introducing brokers, commodity trading advisors and commodity pool operators (collectively "Foreign Intermediaries") may qualify for exemptions from registration with the CFTC. In particular, the CFTC proposed amendments to Regulation 3.10(c) that would exempt such persons from registration when they act only on behalf of foreign-located persons or international financial institutions (e.g., the World Bank).

Under current requirements, foreign intermediaries must satisfy the condition that relevant transactions are submitted for clearing through a registered FCM. The CFTC eliminated this requirement in the amendments, noting that many commodity interest transactions are not subject to a clearing requirement and/or are not available for clearing by a CFTC-registered derivatives