CFTC enhances international oversight

The Commodity Futures Trading Commission (CFTC) has revised ICE Futures Europe's permission to operate in the US as part of a wider effort to increase international regulatory co-operation.

ICE Futures Europe lists cash-settled contracts for trading that settle based upon the price of contracts traded on the New York Mercantile Exchange (NYMEX), a CFTC-regulated designated contract market. The conditions will apply to any ICE Futures Europe contracts currently linked to a CFTC-regulated exchange contract and those listed in the future.

Under the revised rules, within 120 days ICE Futures Europe must:

- Provide CFTC staff with trade execution and audit trail data for the CFTC's Trade Surveillance System for all of ICE Futures Europe's linked contracts;

- Allow CFTC staff to conduct on-site visits to oversee ongoing compliance with no-action relief;

- Provide CFTC staff with advance copies of all rules, rule amendments, circulars and other notices published by the exchange;

- Provide CFTC staff with copies of all Disciplinary Notices involving linked contracts upon closure of the action;

- Promptly follow any action Nymex is directed to take by the CFTC under its Commodity Exchange Act Section 8a(9) emergency powers authority.

The US Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler and U.K. Financial Services Authority (FSA) Chairman Lord Turner also jointly announced steps today to strengthen cross-border supervision of energy futures markets.

Strengthened surveillance over linked energy contracts will include enhanced access to trade execution and audit trail data, mutual on-site exchange visits, sharing of exchange regulations and notices. The two regulators will also work to develop a framework for emergency action co-ordination.

This will build upon the ongoing information sharing agreement made in November 2006. The CFTC and FSA signed a Memorandum of Understanding at this time to share necessary information for detecting potential abusive or manipulative trading practices in related contracts on UK and US derivatives exchanges.