The Commodity Futures Trading Commission is proposing to expand its registration exemption for foreign firms.

The CFTC announced that it has proposed a rule that would permit certain foreign firms to introduce institutional U.S. customers to registered Futures Commission Merchants in connection with trading on U.S. exchanges, without having to register as an introducing broker.

The IB registration exemption would be limited to those foreign firms that are affiliated with a registered FCM and that have already obtained exemptive relief from the commission. The exempt foreign affiliate would not be permitted to solicit any U.S. customers for trading on U.S. markets nor handle any U.S. customer funds for trading on U.S. markets.

In addition, any participating FCM would be required to acknowledge that it would be liable for any violations of the Commodity Exchange Act or the commission’s regulations committed by the foreign affiliate in connection with those activities, even if another FCM ultimately submitted the trade for clearing.

The commission recently adopted amendments to provide an exemption from registration to any foreign person acting in the capacity as an FCM, IB, commodity trading advisor or commodity pool operator provided that: it limits its customers to persons located outside the U.S.; and, all transactions executed on U.S. exchanges are submitted for clearing on an omnibus basis through a registered FCM.

The latest proposed amendment will be published for comment shortly. Comment on the proposed regulation must be received within 30 days.