The U.S. Commodity Futures Trading Commission (CFTC) announced Monday that it approved a proposed rule that would provide an alternative to fingerprinting for foreign nationals seeking CFTC registration.
Instead of submitting fingerprints, the proposal would allow firms to complete a criminal background check.
Currently, the U.S. industry self-regulatory organization, the National Futures Association (NFA), along with law enforcement agencies, uses the fingerprints submitted by prospective registrants to conduct background checks as part of the process of determining their fitness for registration.
However, in response to concerns raised by industry participants that these requirements are “unduly burdensome”, the CFTC is now proposing to allow firms to carry out these checks instead. Under the proposal, the fingerprint requirements would be deemed satisfied if firms certify that they have carried out a criminal background check, and that those checks do not turn up anything that would disqualify an individual for registration. These certifications must meet certain standards, too.
In its proposals, the CFTC says that it believes the proposal would provide certainty to firms, and will make the derivatives markets that it oversees “more liquid, competitive, and accessible” by enabling foreigners to demonstrate that they qualify for registration without undue burden. “The alternative to fingerprinting proposed will remove an impediment to participation in United States’ markets by persons located outside of the United States while also ensuring the continued protection of market participants and the public,” it says.
Comments on the proposal are due within 30 days.