CFTC Interpretation Requires DCMs to Eliminate Domestic Geographic Access Restrictions
The CFTC interpreted Regulation 38.151(b) to bar domestic geographic restrictions by DCMs, citing conflict with the Commodity Exchange Act. Chairman Selig stressed uniform national operation. Markets and intermediaries have 30 days to comply or explain why they cannot.
SCCG Take — DCMs face immediate operational realignment to national access standards. The Commission’s case-by-case review will shape enforcement and market entry.
The Commodity Futures Trading Commission issued an interpretation of Commission Regulation 38.151(b), which requires designated contract markets to provide competitive, open, fair, and impartial access to members and persons with trading privileges.
“Derivatives markets must operate on a uniform basis at a national scale in order to achieve the purposes set out in the Commodity Exchange Act,” said CFTC Chairman Michael S. Selig. “Geographic access restrictions are inconsistent with those purposes and the Act’s impartial access requirements.”
Compliance Obligations for DCMs
DCMs must cease domestic geographic restrictions that violate the Impartial Access Requirements within 30 days. They may instead submit to the Division of Market Oversight an explanation for why such compliance is not feasible.
The same 30-day timeline applies to ensuring intermediaries accessing the markets are not impeding and are complying with the DCM’s Impartial Access Requirements. An explanation of infeasibility must be submitted if that standard cannot be met.
Enforcement Outlook
The Commission will consider the facts and circumstances of any particular case in connection with potential Commission action. This interpretation enforces national uniformity across derivatives markets without exception for geographic limits.
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