[Federal Register Volume 72, Number 170 (Tuesday, September 4, 2007)]
[Rules and Regulations]
[Pages 50645-50647]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-17195]


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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'') is 
issuing an Amended Supplemental Order authorizing members of Singapore 
Derivatives Trading Ltd (``SGX''), formerly known as Singapore 
International Monetary Exchange Ltd (``SIMEX''), to solicit and accept 
orders from U.S. customers for otherwise permitted transactions on all 
non-U.S. exchanges where such members are authorized by the laws of 
Singapore to conduct futures business for customers. The Amended 
Supplemental Order is issued pursuant to Commission Regulation 30.10, 
which permits the Commission to grant an exemption from certain 
provisions of Part 30 of the Commission's regulations, and supersedes 
the Commission's prior Supplemental Order dated September 9, 1999.

EFFECTIVE DATE: September 4, 2007.

FOR FURTHER INFORMATION CONTACT: Lawrence B. Patent, Deputy Director, 
or Andrew Chapin, Special Counsel, Division of Clearing and 
Intermediary Oversight, at (202) 418-5430, Commodity Futures Trading 
Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, 
DC 20581. Electronic mail: [email protected] or [email protected].

SUPPLEMENTARY INFORMATION: The Commission has issued the following 
Order:

Amended Supplemental Order Granting Expanded Relief Pursuant to 
Commission Regulation 30.10 for Otherwise Permitted Transactions on All 
Non-U.S. Exchanges Where Firms Designated by the Singapore Derivatives 
Trading Ltd Are Authorized by Exchange Regulations To Conduct Futures 
Business for Customers, Subject to Certain Conditions

    On December 30, 1988, the Commission issued an Order granting 
relief under Regulation 30.10 authorizing designated members of SGX to 
solicit and accept orders from customers located in the U.S. for 
otherwise permitted transactions on the Exchange.\1\ On September 9, 
1999, the Commission issued a Supplemental Order expanding the relief 
to include otherwise permitted transactions on Eurex Deutschland.\2\ By 
letter dated November 30, 2006, SEL petitioned the Commission on behalf 
of SGX to amend the Supplemental Order to permit members designated by 
SGX to solicit and accept orders from foreign futures and options 
customers \3\ for otherwise permitted transactions on all non-U.S. 
exchanges \4\ where Exchange Members are authorized by Singapore law to 
conduct futures and options business for customers, subject to SGX and 
SGX Members' continued compliance with the terms of the Original Order 
and with certain specified conditions.\5\
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    \1\ 54 FR 806 (January 10, 1989) (``Original Order'').
    \2\ 64 FR 50248 (September 16, 1999) (``Supplemental Order''). 
In December 1999, SIMEX merged with the Stock Exchange of Singapore 
to form a holding company named the Singapore Exchange Limited 
(``SEL''). SIMEX was renamed SGX and currently operates two 
exchanges as a wholly-owned subsidiary of SEL. The first market, 
called SGX-DT, is dedicated to trading financial futures and option 
contracts. The second market, called JADE, is the result of a joint 
venture with the Chicago Board of Trade, Inc., to trade commodity 
futures and option contracts.
    \3\ The term ``foreign futures or foreign options customer'' 
means any person located in the U.S., its territories or 
possessions, who trades in foreign futures or foreign options.
    \4\ The term ``non-U.S. exchange'' refers to a foreign board of 
trade which is defined in Commission Regulation 1.3(ss), 17 CFR 
1.3(ss) as: Any board of trade, exchange or market located outside 
the United States, its territories or possessions, whether 
incorporated or unincorporated, where foreign futures or foreign 
options transactions are entered into. Thus, contracts that are 
traded on a market that has been designated as a contract market 
pursuant to section 5 of the Commodity Exchange Act (``Act'') are 
not within the scope of this Order.
    \5\ Letter dated November 30, 2006, from Arul Ramiah, Head, 
Regulatory Policy for SEL, to Ananda K. Radhakrishnan, Director, 
Division of Clearing and Intermediary Oversight.
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    On occasion, the Commission has issued Regulation 30.10 orders and/
or supplemental orders that permitted members of an exchange with 
confirmation of Regulation 30.10 relief to trade on behalf of U.S. 
customers on other authorized or designated exchanges outside the 
jurisdiction of the Regulation 30.10 recipient.\6\ To ensure that U.S. 
customers receive adequate protection for transactions intermediated by 
non-U.S. persons on or subject to the rules of a foreign exchange 
located outside the jurisdiction of a Regulation 30.10 recipient, the 
Commission requires the jurisdiction to which the Regulation 30.10 
order is directed to demonstrate that such transactions will be 
regulated as if they were executed on an exchange located within the 
recipient's jurisdiction.\7\ To make this demonstration, the Regulation 
30.10 recipient must: (1) Prohibit its regulatees or members from 
intermediating otherwise permitted transactions for U.S. customers on 
unapproved foreign exchanges as set

[[Page 50646]]

forth under local law, and must specify which exchanges are authorized 
by local law; (2) represent that regulatees or member firms with U.S. 
customers will comply with all the terms and conditions of the original 
Regulation 30.10 Order with respect to transactions entered into on or 
subject to the rules of a foreign exchange located outside its 
jurisdiction; and (3) confirm that it has the authority and the ability 
to enforce its laws, rules and/or regulations with respect to those 
transactions to the same extent that it conducts such activities on an 
exchange located within its jurisdiction. The Regulation 30.10 
recipient also should specify in its application if there does not 
exist a specific statute or regulation setting forth a list of 
authorized or recognized exchanges.\8\
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    \6\ See, e.g., 71 FR 40395 (July 17, 2006) (authorizing members 
of the Sydney Futures Exchange (``SFE'') to solicit and accept 
orders from U.S. customers for otherwise permitted transactions on 
all non-U.S. and non-Australian exchanges where such members are 
authorized by the regulations of the SFE to conduct futures business 
for customers).
    \7\ 64 FR at 50251.
    \8\ Id. at n.20. See, e.g., 67 FR 30785 (May 8, 2002) 
(authorizing members of Eurex Deutschland (``Eurex'') to solicit and 
accept orders from U.S. customers for otherwise permitted 
transactions on all non-U.S. exchanges where such members are 
authorized by Eurex regulations and German law to conduct futures 
business for customers).
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    Upon due consideration, the Commission has determined to issue this 
Amended Supplemental Order permitting SGX Members to which Regulation 
30.10 relief has been confirmed by the Commission or by the National 
Futures Association (``NFA'') to solicit and to accept orders from U.S. 
customers for otherwise permitted transactions in commodity futures and 
commodity options (including options on futures) on or subject to the 
rules of any non-U.S. exchange where such members are authorized by the 
laws of Singapore to conduct futures business for customers.
    The expanded Regulation 30.10 relief provided under this Amended 
Supplemental Order, however, is contingent on the SGX members' 
continued compliance with the Original Order, and the SGX's and SGX 
Members' compliance with the following conditions:

    (1) SGX 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 
futures and options business on all non-U.S. exchanges where such 
members are authorized by the laws of Singapore to conduct futures 
business for customers to the same extent that it conducts such 
activities in regard to SGX business;
    (2) SGX will cooperate with the Commission with respect to any 
inquiries concerning any activity which is the subject of this 
Amended Supplemental Order, including sharing the information 
specified in Appendix A to the 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 SGX Member firm 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 SGX rules and laws in effect in Singapore on the same 
basis as set forth in the Original Order;
    (4) SGX members who apply for confirmation of Regulation 30.10 
relief with the National Futures Association must provide and 
maintain a list of the foreign exchanges where they intend to engage 
in transactions on behalf of U.S. customers pursuant to relief 
granted by this Amended Supplemental Order and must agree to abide 
by the terms and conditions of the Original Order; and
    (5) SGX will continue to comply with the terms of the Original 
Order with respect to transactions effected for U.S. customers on 
SGX.

    As set forth in the Commission's September 11, 1997 Order 
delegating to NFA certain responsibilities, the written representations 
set forth above shall be filed with NFA.\9\ Specifically, SGX Members 
applying for confirmation of Regulation 30.10 relief subsequent to the 
issuance of this Amended Supplementary Order must submit 
representations to NFA consistent with condition (3) of this Order, and 
the list of foreign exchanges required by condition (4), as well as 
representations required by the Original Order. SGX 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. Each firm seeking relief hereunder has an 
ongoing obligation to notify NFA should there be a material change to 
any of the representations required in the firm's application for 
relief, including any change in the list of foreign exchanges referred 
to in condition (4).
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    \9\ 62 FR 47792, 47793 (September 11, 1997).
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    The expanded Regulation 30.10 relief provided by this Amended 
Supplemental Order remains subject to the existing product restrictions 
under the Act and Commission regulations thereunder including those 
related to stock indices, foreign government debt and foreign security 
futures products.\10\ The expanded Regulation 30.10 relief provided 
under this Amended Supplemental Order also is contingent upon the 
continued compliance by the Monetary Authority of Singapore (``MAS'') 
with the terms and conditions of the information sharing arrangement 
with the Commission regarding the Regulation 30.10 activities of the 
SGX members.\11\
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    \10\ See, e.g., Sections 2(a)(1)(C), (D) and (E) of the Act.
    \11\ Letter from Neo Boon Sim, Head, Market and Clearing Houses 
Division, MAS, to Ananda K. Radhakrishnan, Director, Division of 
Clearing and Intermediary Oversight, dated June 11, 2007. The 
Commission signed a bilateral Memorandum of Understanding (``MOU'') 
with MAS on May 16, 2000 concerning Consultation, Co-operation and 
the Exchange of Information (concluded jointly with the U.S. 
Securities and Exchange Commission). In addition, MAS also is a 
signatory to the IOSCO Multilateral MOU.
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    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 and Options.

0
Accordingly, 17 CFR part 30 is amended as set forth below:

PART 30--FOREIGN FUTURES AND FOREIGN OPTIONS TRANSACTIONS

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

    Authority: 7 U.S.C. 1a, 2, 4, 6, 6c and 12a, unless otherwise 
noted.

Appendix C to Part 30--Foreign Petitioners Granted Relief From the 
Application of Certain of the Part 30 Rules Pursuant to Sec.  30.10

* * * * *

0
2. The citation ``Firms designated by the Singapore International 
Monetary Exchange Limited'' is to be revised as follows:

    Firms designated by the Singapore Derivatives Trading Limited.
* * * * *
    FR date and citation: [insert date of this release], 72 FR 
[insert number of page on which this release begins].
* * * * *

0
3. The following citations are to be added:
    Firms designated by the Taiwan Futures Exchange.
    FR date and citation: March 28, 2007, 72 FR 14413.
    Firms designated by the Tokyo Commodity Exchange.
    FR date and citation: February 9, 2006, 71 FR 6759.
    Firms designated by the Bolsa de Mercadorias & Futuros.
    FR date and citation: July 8, 2002, 67 FR 45056.
    Firms designated by Eurex Deutschland.
    FR date and citation: May 8, 2002, 67 FR 30785.


[[Page 50647]]


    Issued in Washington, DC on August 24, 2007.
David Stawick,
Secretary of the Commission.
[FR Doc. E7-17195 Filed 8-31-07; 8:45 am]
BILLING CODE 6351-01-P