Special Notice To Foreign Brokers and Foreign Traders
The Commodity Futures Trading Commission (“CFTC”) has issued regulations that require the designation of an agent in the United States for accepting certain communications and legal process for foreign brokers and foreign traders and which provide for the issuance by the CFTC of “special calls” for information from foreign brokers and traders. E*TRADE Futures LLC ("E*TRADE Futures") is required to notify all foreign brokers and traders of the requirements of these regulations.
- CFTC Regulation 15.05 provides that when a futures commission merchant, such as E*TRADE Futures, executes commodity interest transactions on a United States contract market for the account of a foreign trader or foreign broker, this futures commission merchant will be considered to be an agent of the foreign trader or foreign broker, as well as of customers of the foreign broker who have positions in the foreign broker’s accounts carried by the futures commission merchant, for purposes of accepting delivery and service of communications, including legal process, issued by or on behalf of the CFTC. E*TRADE Futures is required under that Regulation to retransmit any such communications or legal process to you. You should be aware that Regulation 15.05 also permits you to designate an agent other than E*TRADE Futures. Such alternative designation must be evidenced by a written agreement which you must provide to E*TRADE Futures, attention: E*TRADE Futures, 10 S. Riverside Plaza, Suite 500, Chicago, IL 60606, and which E*TRADE Futures, in turn, must forward to the CFTC. If you wish to designate an agent other than E*TRADE Futures, please contact the E*TRADE Futures Operations Group at the address above. If you do not designate another agent, E*TRADE Futures will be your designated agent for CFTC communications. You should consult CFTC Regulation 15.05 for a more complete explanation of the foregoing.
- CFTC Regulation 21.03 requires futures commission merchants, foreign brokers and foreign traders to respond to special calls by the CFTC for information regarding their futures and options trading. E*TRADE Futures is similarly required by this Regulation to notify all foreign brokers and foreign traders of the requirements thereof. Regulation 21.03 provides for the issuance of a special call by the CFTC for information from foreign brokers or traders for whom a futures commission merchant, such as E*TRADE Futures, makes or causes to be made a futures or options on futures transaction, that, such special calls generally are limited to instances where the CFTC needs information and where books and records of the futures commission merchant, trader or foreign broker upon whom the special call is made are not open at all times to inspection in the United States by any representative of the CFTC. For the purposes of this Regulation, E*TRADE Futures will be required to transmit such special calls to you by facsimile or other means of electronic communication, unless you have designated someone else to act as your agent as discussed above. Foreign brokers and traders are required to provide the CFTC with all information specified in a special call. Regulation 21.03 also permits the CFTC to prohibit you from further trading in the contract market and in the delivery months or options expiration dates specified in the call, except for liquidation trading, if the special call is not responded to at the place and within the time required by the CFTC. The special call shall be limited to information relating to futures or options positions of the foreign broker and foreign trader in the United States. Please consult CFTC Regulation 21.03 for a more complete description of the foregoing.
- E*TRADE Futures also would like to bring to your attention certain additional regulations affecting futures commission merchants, foreign brokers and foreign traders. The CFTC has, in Regulation 15.03, established specified reportable position levels for all futures contracts and options on futures contracts. Exchanges have similar requirements. These contract quantities are subject to change at any time.
E*TRADE Futures would be pleased to furnish you with a copy of these CFTC Regulations on request.