CFTC makes further changes to terms with ICE Futures Europe
The US Commodity Futures Trading Commission announced further amendments on Aug. 20 to terms under which ICE Futures Europe may make its electronic trading and order matching system available to exchange members in the United States.
It said that the new conditions were designed to enhance the US commodities trading regulator’s ability to conduct market surveillance and oversight. The InterContinental Exchange division lists cash-settled natural gas contracts for trading which settle based on prices of contracts trading on the New York Mercantile Exchange (NYMEX), which the CFTC regulates. The conditions will apply to any ICE Futures Europe contracts currently linked to a CFTC-regulated exchange contract and those listed in the future, the CFTC said.
Under the conditions, it continued, ICE Futures Europe will be required within 120 days to provide the CFTC’s staff with trade execution and audit trail data for the US regulator’s trade surveillance system for all of ICE Futures Europe’s linked contracts; on-site visits to oversee the exchange’s ongoing compliance with its no-action relief; advance copies of all rules, rule amendments, circulars, and other notices which it publishes; and copies of all disciplinary notices involving its linked contracts upon closure of the action.
The CFTC added that in the event that it directs NYMEX to take emergency action with respect to a linked contract, ICE Futures Europe would be required to take similar action with respect to the linked contract on its exchange. The moves followed the CFTC’s July 30 announcement that it would begin to integrate ICE Futures Europe’s large trader data into the regulator’s commitment of traders report.
The US commodities regulator said that the new actions, which were embodied in a revised “no-action letter,” supplemented a June 17 amendment to ICE Futures Europe’s no-action relief which added conditions including requirements to report large trader positions, publish daily trading information in the linked contracts, and establish position limits or accountability levels comparable to the ones for the counterpart linked NYMEX contracts.
The new conditions also built on a November 2006 memorandum of understanding between the CFTC and its British counterpart, the Financial Services Authority, which concerns consultation, cooperation and the exchange of information related to market oversight and the detection of potential abusive or manipulative trading practices that involve trading in related contracts on British and US derivatives exchanges. The two regulatory agencies agreed on Aug. 20 to strengthen that agreement.
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