CFTC Clarifies Access Standards for Designated Contract Markets

Transparency in Trading

In a significant move on transparency in trading, the Commodity Futures Trading Commission (CFTC) today announced its latest interpretation regarding the necessity for designated contract markets (DCMs) to maintain equitable access for all members and trading participants. This clarification elaborates on the constraints set forth under Commission Regulation 38.151(b), known as the Impartial Access Requirements.

Chairman's Statement

Chairman Michael S. Selig emphasized the importance of uniform access to derivatives markets across the nation, asserting that such accessibility is vital to fulfilling the objectives specified in the Commodity Exchange Act. He pointed out that restrictions based on geography contradict these goals and the Act's commitment to impartial access.

New Directive for DCMs

The new directive gives DCMs a time frame of 30 days to eliminate any domestic geographic barriers that breach these access requirements. Should they find compliance difficult, they are required to present a justification to the Division of Market Oversight. Additionally, DCMs must also ensure that any intermediaries engaging with their markets are adhering to these access standards.

Failure to comply will necessitate an explanation from the DCMs regarding the challenges faced in achieving conformity.

Future Evaluations

The CFTC has stated that it will take into account the unique circumstances surrounding each case when evaluating potential actions going forward.