On May 17, the Commodity Futures Trading Commission issued an order granting a Part 30 exemption to the National Stock Exchange of India. The order allows NSE members to accept U.S. customer funds for trading futures and options listed on that exchange without having to register as futures commission merchants with the CFTC. The CFTC decision was based on a finding that the local laws and regulations in India applicable to NSE members provide a "comparable level" of customer protection.
“Regulators must take a cooperative approach to pursuing market integrity and customer protection,” said CFTC Chairman Chris Giancarlo in a statement issued with the order. He added that the "optimal approach" to promoting cross-border trading is through "deference to comparable foreign regulatory regimes.”
For NSE, the announcement marks the culmination of more than 10 years of work. The Indian exchange, one of the largest derivatives exchanges in Asia-Pacific, filed its first petition for an exemption in August 2007 and updated the petition several times thereafter. In reaching its decision, the CFTC cited seven areas where the regulatory framework governing NSE members meets the criteria for "comparable" protections, including qualification requirements, financial requirements, sales practice standards and audit procedures.