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Non-US, IFI brokers and CTAs get regulatory relief from CFTC

First Published 6th June 2015

CFTC announces it is issuing no-action relief from introducing broker and commodity trading advisor registration to persons located outside the US engaged in activities on behalf of customers that are international financial institutions.

Community Futures Trading Commission

Community Futures Trading Commission

"...relief is appropriate in light of the unique attributes and status of IFIs, and in consideration of international comity."

The Commodity Futures Trading Commission's Division of Swap Dealer and Intermediary Oversight (DSIO) today announced it will not recommend that the Commission take action for failure to register as an introducing broker or commodity trading advisor against persons located outside the US that facilitate swap transactions for International Financial Institutions (IFIs) that have offices in the US.

In a no-action letter, DSIO took the position that the relief is appropriate in light of the unique attributes and status of IFIs, and in consideration of international comity. In addition, the relief granted today is consistent with the Commission's prior treatment of IFIs for purposes of foreign futures and options transactions, the swap dealer definition, and mandatory clearing.

DSIO has defined IFIs, for purposes of the no-action letter, in accordance with prior Commission policy to be the following institutions and organisations: International Monetary Fund, International Bank for Reconstruction and Development, European Bank for Reconstruction and Development, International Development Association, International Finance Corp., Multilateral Investment Guarantee Agency, African Development Bank, African Development Fund, Asian Development Bank, Inter-American Development Bank, Bank for Economic Cooperation and Development in the Middle East and North Africa, Inter-American Investment Corp., Council of Europe Development Bank, Nordic Investment Bank, Caribbean Development Bank, European Investment Bank and European Investment Fund (International Bank for Reconstruction and Development, International Finance Corp. and Multilateral Investment Guarantee Agency.