SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING 

This SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING ("MOU") by and 

between the COMMODITY FUTURES TRADING COMMISSION ("CFTC") and the 

COMMISSION£ NAZJONALE PERLE SOC/ETA E LA BORSA ("Consob"'), complements and 

supplements the Memorandum of Understanding Between the Commodity Futures Trading 

Commission and the Commissione Nazionale per le Societa e Ia Borsa on Consultation and 

Mutual Assistance for the Exchange of Information dated 22 June 1995 (the "1995 MOU"), as 

follows: 

RECITALS: 

WHEREAS, the CFfC is an independent regulatory agency established pursuant to the United 

States Commodity Exchange Act, 7 USC § 1, et seq. ("USCEA ") with jurisdiction over 

commodity ·futures and options markets and certain financial service providers in the United 

States; 

WHEREAS,. the Consob is an independent agency, instituted in 1974, entrusted by Italian law 

with competence over both cash and derivatives markets and the provision of investment 

services in general; 

WHEREAS, regulated markets established in the jurisdiction of one Authority (hereinafter 

defined) may admit members or permit access by frrms which are established in the jurisdiction 

of the other Authority subject to the laws and regulations and any recognition order or noaction relief applicable to the relevant markets, and such cross-border access is conditional 

upon the Authorities being able to share information and assist and cooperate with one another 

adequately to carry out' their regulatory, supervisory and/or oversight responsibilities; 

WHEREAS, a market regulated in the jurisdiction of one Authority that is recognized by the 

other Authority may provide within both jurisdictions, the facilities necessary for market 

participants in the jurisdiction of the other Authority to trade on such regulated market via 

remote membership; 

WHEREAS, the CFTC and Consob recognize their murual interest in developing a framework 

for information sharing, assistance and cooperation in the performance of their respective 

regulatory, supervisory and oversight responsibilities with respect to authorized or registered 

firms or persons that are remote members of and/or have access to regulated markets in their 

respective jurisdictions; 
WHEREAS, admission to membership of a regulated market (and continued membership 

thereof) is subject to compliance with the rules of the market relating to its constitution and 

administration and with the laws, rules, regulations, and procedures relating to (i) transactions 

on the market (which include transparency and reporting requirements), (ii) the professional 

standards applicable to persons operating or participating in the market, and (iii) clearing and 

settlement; 

WHEREAS, a recognized market has the power to condition admission to membership or 

access (and continued membership or access) to the market upon the applicant submitting itself 

to its investigative powers relating to compliance with market regulations concerning the 

adequacy of the technological system to be used by the applicant for trading and related 

activities and the compatibility of the applicant's system with the technological system of the 

recognized market; 

WHEREAS, each Authority intends to admit, or not to take action with respect to a regulated 

market's decision to admit, as a remote member a firm or person authorized by or registered 

with the other Authority, and in good standing with the other Authority, provided that 

information required to be shared with respect to a proposed remote member does not include 

facts that would otherwise prohibit admission of such proposed remote member as a member of 

that market, and further provided that additional registration, licensing, or authorization 

requirements may be applicable if the remote member intends to accept orders from customers 

located in the jurisdiction of the admitting Authority; 

UNDER STAND I N G S: 

ACCORDINGLY, the CFTC and the Consob have reached the following understandings 

regarding their respective intentions to share information, to provide assistance, and to 

cooperate with one another, as follows: 

I. Definitions. The following terms will have the respective meanings set out below: 

"Authority" or "Authorities" means the CFTC and/or the Consob, individually or 

collectively, as the context requires. 

"Italian Authorized Firms" means legal persons which are established in Italy and are 

authorized by the Consob to provide investment services in Italy under Italian Legislative 

Decree 5811998 or credit institutions which are established in Italy and are authorized to 

provide investment services by the· Bank: of Italy. 

"Italian Regulated Markets" means all derivatives markets which are authorized in Italy as 

regulated markets, and regulated by laws, rules, and regulations which are in conformity 

with European Community law and sufficient to ensure the transparency of the markets, the 

orderly conduct of trading, and the protection of investors. 

2 
"Laws" means the laws, rules, regulations .. and the terms of any recognition order or no. 

action position which govern or are applicable to Regulated and/or Recognized Markets and 

to the members, including Remote Members, of the Regulated and/or Recognized Markets 

that are subject to the jurisdiction of each of the Authorities, respectively. 

"NFA" means the National Futures Association, a registered futures assoCiation with selfregulatory responsibilities, as well as certain authority delegated to it by the CFrC, under 

the USCEA. 

"Principal" means persons for whom the respective Authority maintains fitness 

information. With respect to the intentions of the CFfC, the term "principal" means 

"principal" as defined in CFfC Rule 3.1 (a), 17 CFR § 3.l(a), as amended or superseded 

from time to time. With respect to the intentions of the Consob, the term "principal" means 

a person performing administrative, managerial or control functions in an investment firm 

(including a bank engaged in investment business) as defined in the Decree of the Mimster 

of the Treasury No. 468 of November 11, 1998, or in the Decree of the Minister of the 

Treasury No. 144 of March 18, 1998, respectively, as amended or superseded from time to 

time. 

"Recognized Market" or "Recognized Markets" means Recognized Italian Markets and/or 

Recognized US Markets, individually or collectively, as the context requires. 

"Recognized Italian Market" means any Italian Regulated Market which, consistent with 

permission from Consob, has placed and/or is operating, directly or indirectly, 

technological facilities within the United States through which US Registrants or other 

market participants established or domiciled in the United States can obtain access to the 

Italian Regulated Market in compliance with applicable United States Laws or pursuant to 

no--action relief issued by the CFfC. 

"Recognized US Market" means any US Regulated Market which has been authorized by 

the Consob to grant remote membership in, or remote access to, Italian Authorized Firms 

through technological facilities located within Italy. 

"Remote Italian Member" means a US Registrant which is admitted as a member of or has 

access to a Recognized Italian Market from a location in the United States. 

"Remote Member" means a natura) or legal person that is domiciled or established in the 

jurisdiction of one Authority which is a member of or has access to a Regulated Market 

located in the jurisdiction of the other Authority. 

"Remote US Member" means an Italian Authorized Firm which is admitted as a member 

of, or has access to, a Recognized US Market from a location in Italy. 

3 
"Regulated Market" or "Regulated Markets" means Italian Regulated Markets and/or US 

Regulated Markets, individually or collectively, as the context requires. 

"Requested Authority" means the Authority to whom a request for information or 

· assistance is directed. 

"Requesting Authority" means the Authority requesting information or assistance. 

"US Registrant" means a natural or legal person, or a Principal thereof, who is registered 

or otherwise subject to a fitness/propriety review under the USCEA, including, among 

others, futures commission merchants who solicit or accept orders for futures and options 

transactions and who are subject to minimum financial requirements. 

"US Regulated Market" means a derivatives market designated as a contract market or 

other United States derivatives market which is subject to oversight by the CFfC under the 

USCEA and applicable regulations, as amended or superseded from time to time. 

2. General Principles. 

2.1. Scope of MOU. This MOU is intended to be applicable with respect to all Regulated 

Markets recognized from time to time by the respective Authorities and to all Remote 

Members of any such Regulated Markets subject to the jurisdiction of the Authorities. 

2.2. Other Powers. The Authorities have various powers to obtain information in the 

exercise of their regulatory, supervisory and oversight functions other than pursuant to 

this MOU. Nothing in this MOU is intended to affect the exercise of such powers or 

the operation of any other arrangement relevant to the sharing of information between 

the Authorities, unless otherwise stated herein. 

2.3. No Third Party Beneficiaries. The provisions of this MOU are not intended to give 

rise to a right on the part of any third party, directly or indirectly, to obtain, suppress 

or exclude any information that is the subject of this MOU or to challenge the 

execution of a request for information or assistance under this MOU. 

2.4. Reciprocity. Information sharing, cooperation and assistance between the Authorities 

pursuant to this MOU are intended to be effectuated on a reciprocal basis. 

2.5. Consistency With Laws. Information sharing, cooperation and assistance between the 

Authorities pursuant to this MOU are intended to be effectuated consistent with the 

Laws and the provisions on confidentiality and use of information contained herein and 

in the 1995 MOU, consistent with the powers granted pursuant to the Laws. 

4 
2.6. Adequacy of Laws. Each Authority understands that the Laws of the other Authority 

governing markets and intermediaries are intended to provide an adequate level of 

protection of investors and provide for an appropriate degree of information, 

supervision, and oversight. The CFTC and Consob intend to exchange or to facilitate 

the exchange of information made a condition of a CFTC rule or staff no-action letter 

for a Regulated Italian Market relating to placement of technological facilities of a 

Recognized Italian Market in the United States or a Consob decision recognizing a US 

Regulated Market as a Recognized US Market. 

3. Responsibilities of the Consob. 

3.1. Consob Authority. The Consob exercises authority over the Italian Regulated Markets 

and their respective members. 

3.2. Lists of Remote Members. The Consob intends to keep, or cause each Recognized 

US Market to keep, a list of the Italian Authorized Firms that are Remo~e US 

Members of such Recognized US Market. The Consob intends to furnish, or cause the 

Recognized US Market to furnish, a copy of such list to the CFTC upon request. By 

order of the Consob, the Recognized US Market will be required to inform forthwith 

the Consob upon receipt of any application for membership by an Italian Authorized 

Firm. Upon request from the CFTC, the Consob will confirm the list of US 

Registrants which are Remote Italian Members. 

3.3. Fitness/Propriety of Italian Authorized Firms that are Remote US Members. The 

Consob' intends with respect to Italian Authorized Firms who are or apply to become 

Remote US Members of Recognized US Markets to use its best efforts to provide, or 

to cooperate with other Italian public authorities to provide, to the CFfC objective 

information which, in the judgment of the Consob, adversely affects the fitness or 

propriety to conduct investment business or the financial capacity of the Remote US 

Member, or the fitness and propriety of its chief executive officer or executive 

directors and any other Principal of the Remote US Member, including: 

3.3.1. Initially, upon request by the CFTC or, subject to Section 6.3, to confirm 

information to a Recognized US Market, with respect to an application by an 

Italian Authorized Firm for membership in or access rights to a Recognized US 

Market, the following information: 

a. the names of all Principals; 

5 
b. a statement by the Consob regarding the authorization status of the Italian 

Authorized Firm and material adverse information in the possession of 

Consob regarding the Italian Authorized· Finil and each of its Principals, 

such as information on past convictions under Italian laws, and judicial or 

administrative fmdings of Italian administrative courts which may affect 

the propriety of these persons; 

c. the appointment of an administrator for administrative liquidation for any 

applicant within the last 10 years; 

d. the amount of regulatory capital of the applicant as of the application date; 

and 

e. any other objective information in the possession of Consob materially 

adversely affecting the ability of the proposed Remote US Member to 

perform its functions honestly or fairly. 

3.3.2. On an on-going basis and in a timely manner, any information or adverse 

records on Italian Authorized Firms that are Remote US Members of 

Recognized US Markets, such as: 

a. material adverse actions taken by the Consob, an Italian Regulated Market 

or the clearing organization for an Italian Regulated Market, such as 

actions commenced regarding suspected manipulative or abusive activities 

engaged in by such Remote US Member in relation to trading on an Italian 

Regulated Market or a Recognized US Market; 

b. material sanctions assessed or levied by the Consob or an Italian Regulated 

Market and, to the extent known to the Consob, by any other Italian or 

other relevant financial regulatory authority. such as sanctions that would 

revoke, suspend, condition, or limit the authorization or trading rights of 

the Remote US Member on an Italian Regulated Market; 

c. any additions or deletions of Principals; 

d. any material event or development of which the Consob is aware that has 

or is likely to have a significant detrimental effect on a Recognized US 

Market and/or a Remote US Member, such as: 

(i) the failure of a Remote US Member to meet financial 

requirements imposed upon the Remote US Member pursuant to 

Italian Laws or a likely future breach by a Remote US Member of 

such financial requirements; 

6 
(ii) the suspension or default of a Remote US Member on any Italian 

Regulated Market or any other market to which it has access; 

(iii) serious organizational, financial or operational difficulties at a 

Remote US Member; or 

(iv) the appointment of an administrator for administrative liquidation 

for the Remote US Member; and 

e. any other objective information in the possession of the Consob materially 

adversely affecting the fitness to conduct investment business of, or the 

fmancial capacity of, the Remote US Member. 

3.3.3. The Authorities intend that the information described in Section 3.3.2 above be 

provided in an appropriate time frame corresponding to the· severity of the 

conduct or actions of the Remote Member, the materiality of the information to 

the fitness of the Remote Member to operate on a Recognized Market, and the 

significance of the conduct or actions to the fulfillment of the responsibilities of 

the Authorities. 

3.3.4. Upon request by the CFTC: 

a. fitness/propriety information with respect to a Remote US Member or its 

Principals; and 

b. information as to whether a Remote US Member is in compliance with 

relevant Italian financial and/or operational requirements. 

3.4. Propriety Information on Italian Authorized Finns with Non ... Jtalian Owners. With 

respect to information on Italian Authorized Firms owned by non-Italian persons which 

are or apply to become Remote US Members~ the Consob intends to use its best efforts 

to obtain relevant information as to the propriety of such owners from regulators in 

other jurisdictions, as appropriate, and to transmit such information to the CFTC. 

3.5. Use of Fitness/Propriety Information. The CFTC may use the fitness/propriety 

information provided hereunder regarding an Italian Authorized Firm that is or has 

applied to be a Remote US Member, among other purposes, to refuse or suspend 

7 
access by such Italian Authorized Firm or Remote US Member to US Regulated 

Markets, subject to applicable United States Laws!' and/or may, subject to Section 6.3 

of this MOU, transmit such information to a US Regulated Market on which that 

Italian Authorized Firm trades or to the NFA. Where the Consob has notified the 

CFTC of material adverse information regarding a Remote US Member, the Consob 

intends to take further appropriate action to provide assistance to the CFTC to allow 

the CFTC to take actions necessary to protect both investors and US Regulated 

Markets. 

3.6. Application by US Regulated Markets to Be Recognized in Italy. The Consob 

intends immediately to inform the CFTC on receipt by Consob of an application by a 

US Regulated Market to become a Recognized US Market. 

3. 7. Infonnation Regarding Recognized Italian Markets. The Consob intends promptly 

to inform the CFfC if it determines that the systems and procedures of any Italian 

Regulated Market that is a Recognized Italian Market for producing price transparency 

have failed or are in imminent danger of failing. 

3.8. Information Regarding Remote Italian Members. The Consob intends promptly to 

inform the CFfC regarding any disciplinary actions or access denial decisions 

regarding Remote Italian Members of Recognized Italian Markets that are taken by 

Consob or are reported by an Italian Regulated Market to Consob. 

4. Responsibilities of the CFfC. 

4.1. CFTC Authority. The CFTC exercises certain regulatory, supervisory or oversight 

authority over US Regulated Markets and US Registrants. 

4.2. Lists of Remote Members. The CFTC intends to keep, or cause each Recognized. 

Italian Market to keep, a list of the US Registrants that are Remote Italian Members of 

such Recognized Italian Market. The CFTC intends to furnish, or cause the 

Recognized Italian Market to furnish, a copy of such Jist to the Consob upon request. 

Upon request from the Consob, the CFTC will confirm the list of Italian Authorized 

Firms which are Remote US Members. 

4.3. Fitness/Propriety of US Registrants that are Remote Italian Members. The CFTC 

intends with respect to US Registrants who are or who apply to become Remote Italian 

Members of Recognized Italian Markets to use its best efforts to provide, or to 

cooperate with other United States public, professional or self-regulatory authorities to 

provide, to the Consob objective information which, in the judgment of the. CFTC, 

adversely affects the fitness or propriety to conduct investment business of, or the 

financial capacity ofy the Remote Italian Member, or the fitness and propriety of its 

8 
chief executive officer and executive directors or any other Principal of the Remote 

Italian Member, including: 

4.3.1. Initially, upon request by Consob or, subject to Section 6.3, to confirm 

information to a Recognized Italian Market, with respect to an application by a 

US Registrant for membership in or access to a Recognized Italian Market, the 

following information: 

a. the names of all Principals; 

b. a statement by the CFTC of the registration status of the US Registrant, 

and material adverse information in the possession of the CFTC regarding 

the US Registrant and each of its Principals, such as complaints, 

administrative proceedings, or other actions or sanctions in effect, received 

or initiated or taken by the CFTC or the NF A; 

c. the commencement of a bankruptcy or insolvency proceeding with respect 

to any Principal within the last 10 years; 

d. with respect to introducing brokers and futures commission merchants, the 

amount of regulatory capital of the applicant as ·of the most recent date 

such information was filed with the CFfC; and 

e. any other objective information in the possession of the CFTC materially 

adversely affecting the ability of the proposed Remote Italian Member to 

perform its functions honestly or fairly. 

4.3.2. On· an on-going basis and in a tunely manner, any information or adverse 

records on US Registrants that are Remote Italian Members of Recognized 

Italian Markets, such as: 

a. material adverse actions taken by, the CFTC, NFA, a US Regulated 

Market, or a clearing organization for a US Regulated Market against a 

Remote Italian Member, such as: (i) the ftling of a complaint by the CFfC 

against a Remote Italian Member alleging suspected manipulative or 

abusive activities engaged in by such Remote Italian Member in relation to 

trading on a US Regulated Market or a Recognized Italian Market., or (ii) 

an action by NFA, or an action by a US Regulated Market or a clearing 

organization for a US Regulated Market which is reported to NFA, 

commenced against such Remote Italian Member in relation to trading on a 

US Regulated Market or a Recognized Italian Market which could lead to 

9 
the revocation, suspension. conditioning or limitation of "the trading rights 

of the Remote Italian Member on a US Regulated Market; 

b. material sanctions assessed or levied by the CFTC, the NFA, or a US 

Regulated Market, and,. to the extent known to the CFfC, by any other 

United States or other relevant financial regulatory authority, such as 

sanctions that would revoke, suspend, condition, or limit the registration 

status or trading rights of the Remote Italian Member on a US Regulated 

Market; 

c. any additions or deletions of Principals; 

d. any material event or development of which the CFTC is aware that has or 

is likely to have a significant detrimental effect on a Recognized Italian 

Market and/or a Remote Italian Member, such as, in the case of a futures 

commission merchant: 

(i) the receipt by the CFTC of a CFTC Rule 1.12 (early warning) 

notice as to capital, segregation or inadequacies in internal 

controls filed by the Remote Italian Member with its designated 

United States self-regulatory organization and the CFfC, with 

respect to a deficiency in its required adjusted net capital, where 

the inadequacy identified in such notice is not promptly corrected 

by the US Registrant, 

(ii) information regarding any suspension of a Remote Italian 

Member from carrying customer positions or its suspension or 

default on a US Regulated Market or any other market subject to 

CFTC oversight, or 

{iii) the entry of an Order for Relief in a proceeding in bankruptcy 

with respect to a Remote Italian Member or any of its Principals; 

and 

e. any other objective information in the possession of the CFfC materially 

adversely affecting the fitness to conduct investment business of, or the 

financial capacity of, the Remote Italian Member. 

4.3.3. The Authorities intend that the information described in Section 4.3.2 above be 

provided in an appropriate time frame corresponding to the severity of the 

conduct or actions of the Remote Member, the materiality of the information to 

the fitness pf the Remote Member to operate on a Recognized Market, and the 

significance of the conduct or actions to the fulfillment of the responsibilities of 

the Authorities. 

10 
4.3.4. Upon request by the Consob: 

a. fitness/propriety information with respect to a Remote Italian Member or 

its Principals or employees; and 

b. information as to whether a Remote Italian Member is in compliance with 

relevant United States capital and/or operational requirements. 

4.4. Fitness Information on US Registrants with Non-US Owners. With respect to 

information on US Registrants owned by non-United States persons which are or apply 

to become Remote Italian Members, the CFfC intends to use its best efforts to obtain 

relevant fitness/propriety information from regulators in other jurisdictions, as 

appropriate, and to transmit such information to Consob. 

4 .. 5. Use of Fitness/Propriety Information. The Consob may use fitness/propriety 

information provided hereunder regarding a US Registrant that is or has applied to be a 

Remote Italian Member to refuse or suspend access by such US Registrant or Remote 

Italian Member to Italian Regulated Markets and/or Recognized Italian Markets, 

subject to applicable Italian law, and/or may, subject to Section 6.3 of this MOU, 

transmit such information to an Italian Regulated Market and/or Recognized Italian 

Markets on which the US Registrant trades. Where the CFfC has notified the Consob 

of material adverse information regarding a Remote Italian Member, the CFfC intends 

to take further appropriate action to provide assistance to the Consob to allow the 

Consob to take actions necessary to protect both investors and the Italian Regulated 

Markets. 

4.6. Delegation of Functions. Subject to the consent of the Consob, the CFfC may 

delegate the performance of certain of its intentions under this MOU to the NF A or 

another United States self-regulatory organization. 

4.7. Application by Italian Regulated Markets to Be Recognized in the United States. 

The CFTC intends immediately to inform the Consob on receipt by the CFTC of an 

application by an Italian Regulated Market to become a Recognized Italian Market. 

11 
4.8. Information Regarding Recognized US Markets. The CFTC intends promptly to 

inform the Consob if it determines that the systems and procedures of any US 

Regulated Market that is a Recognized US Market for producing price transparency 

have failed or are in imminent danger of failing. 

4.9. Information Regarding Remote US Members. The CFfC intends promptly to 

inform the Consob regarding any disciplinary actions or access denial decisions 

regarding Remote US Members of Recognized US Markets that are taken by the 

CFfC or are reported by a US Regulated Market to the NFA under Part 9 of the 

CFTC Rules pursuant to a CFTC delegation order. 

5. Other Assistance. 

5.1. Assistance in Obtaining Information. The Authorities intend to provide each other, 

upon request and consistent with the Laws, assistance in obtaining infonnation and/or 

documents (or copies thereof) located or available in their respective jurisdictions 

concerning the business activities of Remote Members related to their activities on 

Regulated Markets. Such assistance may include, subject to the discretion of the 

Requested Authority: 

5.1.1. cooperation and consultation in the review, interpretation, and analysis of books 

and records; and 

5.1.2. to the extent authorized by the Laws, the taking of statements to obtain 

information. Any statements taken pursuant to this MOU are intended to be 

taken in accordance with the Laws of the country of the Requested Authority. 

5.2. On-site Inspections. 

5.2.1. Each Authority may take steps to carry out inspections on behalf of the other 

Authority upon request, subject to the discretion of the Requested Authority and 

subject to any limitations under applicable Laws. 

5.2.2. In the event the Requested Authority conducts an on-site inspection in the 

offices of a Remote Member in the Requested Authority's jurisdiction, the 

Requested Authority, subject to any limitations under applicable Laws, may 

· permit the Requesting Authority to accompany the Requested Authority on such 

on-site inspection as an observer on a case by case basis with respect to an issue 

which may affect the responsibility of the Requesting Authority with respect to 

the operations or status of the Recognized Market in its jurisdiction. 

12 
6. Use and Confidentiality of lnfonnation. 

6.1. Limitations on Use. Information received under this MOU is intended to be used 

solely for carrying out the respective regulatory, supervisory or oversight 

responsibilities, which include enforcement responsibilities, of the Authorities. Such 

information is not intended to be used contrary to conditions relating to the use of that 

information imposed by the Requested Authority to give effect to Laws in force in the 

Requested Authority's jurisdiction or the 1995 MOU. 

6.2. Confidentiality. Any information or written materials obtained or viewed pursuant to 

the provisions of this MOU will. be subject to the Laws and the confidentiality 

provisions of the 1995 MOU. The Laws of each Authority regarding the use and 

confidentiality of information shared pursuant to this MOU are set out in Appendix 

"A." 

6.3. Dissemination of Information. Information provided by one Authority to the other 

may be further provided, with the consent of the Requested Authority, to the Regulated 

Markets and/or Recognized Markets of which the Remote Member is a member or to 

another self-regulatory organization. In such a case, each of the Authorities 

respectively intends, to the extent that it is within its power, to assure that all such 

persons with access to such information have consented to be bound by, and comply 

with, confidentiality standards at least equal to those set out in the 1995 MOU. In the 

event information shared under the MOU is passed by an Authority to one of its 

Regulated Markets and/or self-regulatory organizations, each of the Authorities, 

respectively, further confirms that, in the event of a breach or a threatened breach by 

such Regulated Market and/or self·regulatory organizations or any of its directors, 

officers, members, or employees of its or their obligations or undertakings regarding 

the confidentiality or use of information received pursuant to this MOU, the Authority 

intends to take such action as may be appropriate to cause such obligations or 

undertakings to be effected or otherwise to remedy or sanction such breach consistent 

with its powers. The Consob further consents to the provision by the CFfC of 

information exchanged with the Consob under the MOU to any US Regulated Market 

that has delivered to the CFfC undertakings in the form set out as Appendix "B" and 

to the NFA which has delivered similar undertakings to the CFfC. 

7. Effect of Termination. The termination gf this MOU does not affect either the intentions 

of the Authorities or the obligations of all other parties receiving information provided or 

exchanged pursuant to this MOU to maintain the confidentiality of such information. 

8. Direct Requests for Information. Without prejudice to the provisions of this MOU or any 

other information sharing arrangement between the Authorities or an Authority and another 

financial regulatory authority in the jurisdiction of the other Authority, nothing herein is 

intended (i) · to prevent the Consob and the CFTC, respectively, from requesting 

information regarding a transaction consummated on one of its Regulated Markets directly 

from any Remote Member of that market, wherever such Remote Member may be located, 

including information aimed at identifying the beneficial owner of any transactions 

13 
consummated through such Remote Member on the Regulated Market or (ii) to extinguish 

any direct reporting obligation of such Remote Member. 

9. Consultation. The Authorities intend to consult periodically on the operation of this MOU 

in order to determine whether any adjustments to this arrangement ar~ necessary. 

10. Contact Persons. The contact persons of each Authority regarding the · exchange of 

information and assistance under this MOU are set forth in Appendix "C." 

Executed and effective this lllh day of September, 2000 in Rome. 

COMMODITY FUTURES TRADING COMMISSION 

By: MJI!i::r~D 

COMMISSIONE NAZIONALE PERLE SOCIETA E LA BORSA 

By: _L_' ~-F-· ~~lf----'Lc.::......ll!C.\9:::=--..t. ,-....__.._1/}......____ 

Luigi Sj}aven&~ Chairman 

14 
APPENDIX "A" 

The Consob and CFfC have advised each other of the relevant laws concerning the 

confidentiality of infonnation, in particular: 

Italian Laws 

Article 4(3) of Legislative Decree 5811998 ("TUF") (ability of Consob to share non-public 

information with a foreign authority); 

Article 4( 4) TUF (protection from compelled disclosure for confidential information received 

from foreign authorities); and · 

Article 4(12) TUF (imposing professional secrecy on Consob employees with regard to nonpublic information). 

US Laws 

Section 8(e) of the Commodity Exchange Act, 7 U.S.C. Section 12(e) (ability of the CFTC to 

share non-public infonnation with a foreign futures authority); 

Section 8(a)(1) of the CEA, 7 U.S.C. Section 12(a)(l) (protection from compelled disclosure 

for confidential information received from foreign futures authorities); 

Section 8a (6) of the CEA, 7 U.S.C. Section 12a (6) (regarding the confidentiality obligations 

imposed on a contract market or self-regulatory organization which receives information from 

the CFTC); 

Section 12 (f) of the CEA, 7 U.S.C. Section 16 (f) (regarding investigative assistance to 

foreign futures authorities); 

CFTC Rule 1.59 (17 CFR § 1.59) (requirements regarding exchange rules and/or rules of 

other self-regulatory organizations to maintain the confidentiality of information available to 

U.S. regulated markets or other self-regulatory organizations); 

CFTC Rule 140.72 (17 CFR § 140.72) (delegation to specified CFTC employees of authority 

to. disclose confidential information to a contract market, registered futures association or selfregulatory organization); and 

Sections 9(c) and 9 (d) of the Commodity Exchange Act (making it a criminal violation for 

CFTC officials or employees to trade contracts regulated by the Commission or to misuse or 

improperly disclose non-public information). 

15 
APPENDIX "B" 

[EXCHANGE LETIERHEAD] 

William J. Rainer 

Chairman 

Commodity Futures Trading Commission 

Three Lafayette Center 

1155 21sa Street, NW 

Washington, DC 20581 

Dear Mr. Rainer: 

[ ] 2000 

This letter is to support the recognition of the [ 1 Exchange ("[Exchange]") by the Italian 

Commissione Nazionale perle Societa e Ia Borsa ("Consob") and to support the passing of 

information by the CFfC to the [Exchange] of information the CFfC has obtained from the 

Consob. 

Background 

The [Exchange], a regulated futures market in the United States designated by the Commodity 

Futures Trading Commission ("CFfC") under the Commodity Exchange Act ("CEA "), has 

applied to the Consob for recognition as a recognized market in Italy. 

The [Exchange] understands .that (i) pursuant to Italian law, under specified circumstances, 

Consob may disclose to the CFTC for further transmittal to the [Exchange] fitness information 

regarding (a} Italian authorized firms that apply to become remote members of the [Exchange] 

("Applicants") and/or (b) Italian authorized firms that have become remote members of the 

[Exchange] ("Remote Members"), and (ii) the CFTC and Consob intend to create a conduit 

arrangement pursuant to which the CFTC can furnish to the [Exchange] information regarding 

such Applicants and Remote Members. 

[Exchange]' Undertakings 

[Exchange] undertakes, in support of its recognition by the Italian Consob and to facilitate the 

forwarding to the [Exchange] of fitness information obtained by the CFTC from Consob: 

(i) to maintain the confidentiality of the information obtained by the CFTC from Consob and 

furnished by the CFfC to the [Exchange]; 

(ii) to use such information only for the purposes of assessing the initial and on-going fitness of 

the Applicants and Remote Members and of fulfilling its self-regulatory responsibilities under 

the CEA, the regulations promulgated thereunder, and its own internal rules; 

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(iii) to limit distribution of such infonnation to directors, officers, members, and employees 

that are directly responsible for assessing the fitness of members of [Exchange] and for the 

fulfillment of its self-regulatory responsibilities and to refrain from the further transmittal of 

such information to· another exchange, self-regulatory organization, or third party (even if 

otherwise permitted to do so by the CEA, the regulations promulgated thereunder, or its 

internal rules), unless the transmittal of such information is specifi~ally approved in writing by 

Consob; and 

(iv) in the event [Exchange] learns of a breach or threatened breach of its confidentiality or use 

obligations or undertakings, to take appropriate action to redress or otherwise remedy such 

breach, to sanction appropriately any such breach, and/or to refer such matter as relevant to 

the CFrC for appropriate action. · 

[Exchange]' Acknowledgements 

[Exchange] further acknowledges that: 

(i) its undertakings regarding the confidentiality and use of information set out above and the 

fulfillment of its obligations under the CEA, the regulations promulgated thereunder? and its 

internal rules regarding the confidentiality of information are subject to oversight by the 

CFfC; and 

(ii) in the event of a breach or a threatened breach of its confidentiality or use obligations or 

undertakings by the [Exchange] or any of its directors, officers, members, or employees, the 

CFfC intends to take such action as may be appropriate to cause such obligations .or 

undertakings to be effected or otherwise to remedy or sanction such breach. 

Procedure 

To implement the information sharing arrangements between the CFTC and Consob, 

information received from Consob by the CFTC should be routed and directed to me (or my 

designee as [Exchange]' General Counsel) to assure that the distribution of the information 

obtained is restricted to the directors, officers, members, and employees of the exchange as 

specified above. 

Very truly yours, 

[General Counsel or other authorized officer] 

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APPENDIX "C" 

CONTACT PERSONS 

Consob 

The following person(s) at the Consob should be contacted for information under this MOU: 

Director t International Relations Office 

CITC 

The following person(s) at the CFfC should be contacted for information under this MOU: 

Director t Office of International Affairs; or 

Director, Division of Enforcement 

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