[Federal Register Volume 71, Number 136 (Monday, July 17, 2006)]
[Rules and Regulations]
[Pages 40395-40397]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-11152]


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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 30


Foreign Futures and Options Transactions

AGENCY: Commodity Futures Trading Commission.

ACTION: Amended Supplemental Order for Expanded Relief.

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SUMMARY: The Commodity Futures Trading Commission (``Commission or 
CFTC'') is issuing an Amended Supplemental Order for expanded relief, 
authorizing members of the Sydney Futures Exchange (``Exchange or 
SFE'') to solicit and accept orders from U.S. customers for otherwise 
permitted transactions on all non-U.S. and non-Australian exchanges 
(``foreign exchanges'') where such members are authorized by the 
regulations of the SFE to conduct futures business for customers. The 
Amended Supplemental Order supercedes the prior Supplemental Orders, 
relating to expanded relief, issued to SFE in 1997 and 1993. This 
Amended Supplemental Order is issued pursuant to Commission

[[Page 40396]]

Regulation 30.10, which permits the Commission to grant an exemption 
from certain provisions of Part 30 of the Commission's regulations, and 
the Commission's Order to SFE dated November 1, 1988 (Original Order), 
granting relief under Regulation 30.10 to designated members of the 
Exchange.

DATES: Effective Date: July 17, 2006.

FOR FURTHER INFORMATION CONTACT: Lawrence B. Patent, Esq., Deputy 
Director, or Susan A. Elliott, Esq., Special Counsel, Division of 
Clearing and Intermediary Oversight, Commodity Futures Trading 
Commission, 1155 21st Street, NW., Washington, DC 20581. Telephone: 
(202) 418-5430.

SUPPLEMENTARY INFORMATION: The Commission has issued the following 
Order: Amended Supplemental Order Under CFTC Regulation 30.10 Exempting 
Firms Designated by the Sydney Futures Exchange From the Application of 
Certain of the Foreign Futures and Option Regulations for Trading on 
Certain Non-U.S. and non-Australian Exchanges (``Foreign Exchanges''), 
After Filing of Consents by Such Firms and the Sydney Futures Exchange, 
as Appropriate, to the Terms and Conditions of the Order Herein.
    On November 1, 1988, the Commission issued an Order under 
Regulation 30.10 authorizing designated members of the SFE to offer or 
sell certain futures and option contracts traded on the Exchange to 
persons located in the United States.\1\ The Original Order limited the 
scope of permissible brokerage activities undertaken by designated SFE 
members on behalf of U.S. customers to transactions ``on or subject to 
the rules of the Exchange.''\2\ Subsequently, the Commission issued 
Regulation 30.10 orders which did not include this limitation (expanded 
relief), including such orders to SFE.\3\
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    \1\ 53 FR 44856 (November 7, 1988).
    \2\ 53 FR at 44857.
    \3\ 58 FR 19209 (April 13, 1993), hereafter 1993 Supplemental 
Order, and 62 FR 10445 (March 7, 1997), hereafter 1997 Supplemental 
Order. The 1997 Supplemental Order clarified certain depository 
requirements later adopted as Regulation 30.7, 17 CFR 30.7 (2006).
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    A condition of the Commission's grant of expanded relief in 1993 is 
that SFE carry out its compliance, surveillance and rule enforcement 
activities with respect to solicitations and acceptance of orders by 
designated SFE members of U.S. customers for futures business on 
Recognized Futures Exchanges, as defined in Section 9(b) of the 
Australian Corporations Law (ACL), other than a contract market 
designated as such pursuant to section 5a of the Commodity Exchange Act 
(Act), to the same extent that it conducts such activities with regard 
to SFE business.
    The passage of the Financial Services Reform Act (FSRA) in 
Australia in March 2002 eliminated the list of Recognized Futures 
Exchanges as defined in the ACL. A condition for the granting of Part 
30 Expanded Relief to SFE in 1993 was that a foreign exchange be 
included on that list. This Amended Supplemental Order eliminates this 
condition, and substitutes the condition that SFE must identify in its 
rules the foreign exchanges on which its members handle transactions on 
behalf of U.S. customers.\4\ SFE has submitted a proposal to its 
regulator, the Australian Securities and Investments Commission 
(ASIC),\5\ representing that it will identify in its rules the foreign 
exchanges on which its members may handle transactions on behalf of 
U.S. customers, pursuant to its expanded relief. SFE will make the rule 
effective on August 1, 2006.
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    \4\ Relief under this Amended Supplemental Order extends only to 
those products falling within the jurisdiction of the Act and 
remains subject to existing product restrictions under the Act and 
Commission regulations thereunder related to stock indices and 
foreign government debt (see Section 2(a)(1)(B)(v) of the Act and 
Securities and Exchange Commission Regulation 3a12-8, 17 CFR 
240.3a12-8 (2006)).
    \5\ Letter of April 3, 2006 from Barbara Jones, Senior Legal 
Counsel, SFE, to Ms. Tracey Lyons, Director, Markets Regulation, 
ASIC.
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    The relief provided under this Amended Supplemental Order, however, 
is contingent on the SFE's Exchange Members' continued compliance with 
the Original Order and the Exchange's and Exchange Members' compliance 
with the following conditions:
    (1) The SFE will carry out its compliance, surveillance and rule 
enforcement activities with respect to solicitations and acceptance of 
orders by designated Exchange Members of U.S. customers for options and 
futures business on all non-U.S. exchanges listed in Rule 2.2.30(a) of 
the Exchange rules to the same extent that it conducts such activities 
in regard to Exchange business;
    (2) The SFE will cooperate with the Commission with respect to any 
inquiries concerning any activity that is the subject of this Amended 
Supplemental Order, including sharing the information specified in 
Appendix A to the Commission's part 30 regulations, 17 CFR part 30, on 
an ``as needed'' basis on the same basis as set forth in the Original 
Order;
    (3) Each SFE Member confirmed for relief under the Original Order 
seeking to engage in activities that are the subject of this Amended 
Supplemental Order must agree to provide the books and records related 
to such activities required to be maintained under the applicable laws 
and regulations now in effect in Australia and Exchange regulations on 
the same basis as set forth in the Original Order; \6\
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    \6\ SFE member firms that currently operate under the Original 
Order will be deemed to have consented to condition (3) by effecting 
transactions pursuant to this Amended Supplemental Order. Exchange 
members who apply for confirmation of Regulation 30.10 relief 
subsequent to the issuance of this Amended Supplemental Order must 
submit representations to the National Futures Association 
consistent with condition (3) of this Order, and the list of foreign 
exchanges required by condition (4), as well as the representations 
required by the Original Order.
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    (4) Foreign futures and options exchanges on which each SFE Member 
firm may engage in transactions on behalf of U.S. customers are those 
foreign exchanges identified in Rule 2.2.30(a) of the Exchange rules, 
provided however, that Exchange Members may not engage in any 
transactions on behalf of U.S. customers on an exchange designated as a 
contract market under section 5 of the Act;
    (5) SFE Members who apply for confirmation of Regulation 30.10 
relief with National Futures Association must provide a list of the 
foreign exchanges where they intend to engage in transactions on behalf 
of U.S. customers pursuant to the SFE Expanded Relief granted in this 
order and must agree to abide by the Original Order; and
    (6) The SFE will continue to comply with the terms of the Original 
Order with respect to transactions effected for U.S. customers on the 
SFE.
    This Amended Supplemental Order is issued based on the information 
provided to the Commission and its staff. Any changes or material 
omissions may require the Commission to reconsider the authorization 
granted in this Amended Supplemental Order.

List of Subjects in 17 CFR Part 30

    Commodity futures, Commodity options, Foreign futures.


0
Accordingly, the Commission hereby amends Chapter I of Title 17 of the 
Code of Federal Regulations as follows:

PART 30--FOREIGN FUTURES AND FOREIGN OPTION TRANSACTIONS

0
1. The authority citation for part 30 continues to read as follows:

    Authority: Secs. 1a, 2(a)(1)(A), 4, 4c, and 8a of the Commodity 
Exchange Act, 7 U.S.C. 1a, 2, 6, 6c and 12a.

Appendix C to Part 30--[Amended]

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2. Appendix C to Part 30--Foreign Petitioners Granted Relief from the

[[Page 40397]]

Application of Certain of the Part 30 Rules. The following citation is 
added:
    Firms designated by the Sydney Futures Exchange Limited.
* * * * *
    FR date and citation: 70 FR [insert number of page on which this 
release begins] July 17, 2006.
* * * * *

    Issued in Washington, DC, on July 11, 2006.
Eileen A. Donovan,
Acting Secretary of the Commission.
[FR Doc. E6-11152 Filed 7-14-06; 8:45 am]
BILLING CODE 6351-01-P