The Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight issued an advisory on Aug. 28 clarifying foreign board of trade (FBOT) registration rules for non-US exchanges seeking to provide Americans with direct market access.
Acting Chair Caroline Pham positioned the guidance as a remedy for trading activity that departed during previous enforcement actions.
The advisory reaffirms the CFTC’s framework established in the 1990s, which allows foreign exchanges to register and serve US traders across all asset classes, including digital assets.
Pham stated the guidance provides “regulatory clarity needed to legally onshore trading activity that was driven out of the United States due to the unprecedented regulation by enforcement approach of the past several years.”
The Division of Market Oversight received an increased number of inquiries about FBOT registration requirements and procedures as global derivatives markets expanded into new asset classes and trading platforms.
Recent enforcement actions created confusion about whether non-US exchanges should register as designated contract markets or foreign boards of trade, prompting the clarification.
Path to US markets
The advisory addresses disruption caused by what CFTC describes as novel enforcement interpretations inconsistent with decades of precedent.
American companies forced to establish operations in foreign jurisdictions for crypto asset trading now have a defined path to return to US markets through FBOT registration.
Foreign exchanges must demonstrate comparable regulatory supervision in their home countries and establish information-sharing agreements with US authorities.
Registered FBOTs can provide direct access to eligible US participants, including proprietary traders and registered intermediaries like futures commission merchants.
Universal application
The framework applies universally across traditional and digital asset markets, requiring no distinction between asset classes for registration purposes.
To maintain the highest standards of customer protection, all trades must be cleared through CFTC-registered firms or entities exempt under Regulation 30.10.
Pham characterized the advisory as delivering wins for President Donald Trump’s crypto sprint initiative, stating Americans can now “trade efficiently and safely under CFTC regulations” while opening US markets to global participants.
Notably, the advisory comes one day after the CFTC announced the integration of Nasdaq’s surveillance system, aiming to ramp up the oversight of crypto and derivatives trading.
The guidance builds on earlier initiatives to enable spot crypto trading on designated contract markets. It removes jurisdictional uncertainty that deterred foreign exchanges from serving US markets.
By reaffirming longstanding registration categories, the CFTC provides the “simplest and fastest solution” for non-US platforms seeking compliant access to American traders.