The Commodity Futures Trading Commission (CFTC) has issued an interpretation clarifying that designated contract markets (DCMs) generally cannot restrict access for otherwise eligible participants based on their location or residence within the United States. Exchanges must address unlawful geographic restrictions in their own access rules and take reasonable steps to ensure intermediaries do not impose such restrictions. Access criteria should be clearly defined, published in advance and applied uniformly, with eligibility based on financial and operational soundness. The interpretation follows the identification of geographic restrictions in some event contract markets. Such restrictions can prevent participants from managing positions or meeting margin calls while traveling. Excluding participants from particular regions can also fragment liquidity, widen spreads and impair hedging and price discovery. DCMs must cease restrictions that violate impartial access requirements within 30 days or explain to the Division of Market Oversight why compliance is not feasible. Within the same period, DCMs should ensure intermediaries comply with and do not impede those requirements, or submit an explanation of why compliance is not feasible.
CFTC directs exchanges to end unlawful US geographic access restrictions within 30 days
The Commodity Futures Trading Commission has clarified that designated contract markets generally cannot exclude otherwise eligible participants because of their location or residence within the United States. Exchanges must remove unlawful geographic restrictions within 30 days or explain why compliance is not feasible. They should also ensure intermediaries comply with impartial access requirements within that period or provide an explanation of infeasibility.