The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") granted temporary no-action relief to the wholly owned subsidiary (Shorcan, Inc., or "Shorcan") of a futures exchange (Intercontinental Exchange, Inc., or "ICE") from certain registration requirements for introducing brokers ("IBs") and the associated persons of introducing brokers ("APs"). The relief was granted in connection with the planned transition of certain contracts from ICE Futures Europe to ICE Futures U.S. The planned transition date was February 19, 2018.
ICE represented that certain parties may be required to register as IBs or APs solely as a result of the transitioning contracts. According to ICE, without a registration exemption, Shorcan may experience business disruptions and the potential loss of customers, as they would be forced to seek the service of other brokers. The DSIO elected to grant the relief request for Shorcan, subject to certain conditions, including:
- Shorcan files an IB registration application (sufficient to be designated in "pending" status) with the National Futures Association ("NFA") before the transition date, and Shorcan files a guarantee agreement;
- Any Shorcan AP files a registration application (sufficient to be designated in "pending" status) with the NFA before the date they engage in AP activity; and
- Applicants are subject to and make a good faith effort to comply with the CEA and CFTC rules.
The relief will expire on the earliest of (i) August 19, 2018, (ii) the date on which the NFA grants IB or AP registration, or (iii) the date five days after the NFA provides notice to an applicant that they may be disqualified from registration.
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