Markets

NSE gets CFTC exemption for derivatives trades

A guard walks past the NSE (National Stock Exchange) building in Mumbai, India, February 9, 2018. REUTERS/Danish Siddiqui   | Photo Credit: DANISH SIDDIQUI

The National Stock Exchange (NSE) has become the first Indian exchange to get an exemption from the Commodity Futures Trading Commission (CFTC) that will allow members of the Indian bourse to trade in derivatives for U.S. clients.

“The order issued to NSE permits its members to accept U.S. customer funds directly for the purpose of trading in futures and options contracts on NSE without the members having to register with the CFTC as a futures commission merchant,” stated a release by the NSE.

“The [CFTC] issued a Part 30 exemptive order dated May 17, 2018 to the National Stock Exchange of India (NSE) as part of its program of regulatory deference to foreign regulatory frameworks. Part 30 exemptive program of CFTC provides U.S. customers with increased access to foreign futures markets,” the release added.

CFTC is an independent agency of the U.S. government that regulates the futures and options markets and monitors various organisations related to derivatives clearing, futures commission merchants and swap data repositories among others.

SEC recognition for BSE

Incidentally, the development comes just days after the BSE becoming the first Indian exchange to be recognised as a Designated Offshore Securities Market (DOSM) by the U.S. Securities and Exchange Commission (SEC).

The DOSM status allows the sale of securities to U.S. investors through the trading venue of BSE without registration of such securities with the U.S. SEC and thus eases the trades by U.S. investors in India.

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Printable version | May 15, 2021 12:27:24 AM | https://www.thehindu.com/business/markets/nse-gets-cftc-exemption-for-derivatives-trades/article23930246.ece

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