ARRANGEMENT 

. BETWEEN THE 

UNITED STATES 

COMMODITY FUTURES 

TRADING COMMISSION 

AND 

FORWARD MARKETS 

COMMISSION 

OF INDIA 

REGARDING REGULATORY . 

COOPERATION 

AND TECHNICAL ASSISTANCE 
1. The United States Commodity Futures Trading Commission (CFTC) was created by 

the United States Congress as an independent agency with the mandate to supervise 

and oversee commodity futures and options markets in the United States. 

2. The Forward Markets Commission of India (FMC) is the designated agency under the 

Forward Contracts (Regulation) Act, 1952 for the supervision, surveillance, regulation and 

development of commodity futures and other applicable derivatives trading in India. 

3. The CFTC and the FMC (coll~ctively the Authorities) are jointly committed to 

maintaining open, fair, efficient and sound futures and options markets; recognize that 

the development and maintenance of domestic legal and regulatory structures are 

essential to market integrity and investor protection; believe that international 

cooperation can facilitate the development and effective operation of futures and 

options markets; and desire to establish a mutually acceptable basis for cooperation 

and the provision of technical assistance. The CFTC and the FMC have reached the 

following understanding with respect to cooperation, consultation and the provision of 

technical assistance. 

CLAUSE I -CONSULTATION REGARDING MATTERS OF MUTUAL 

INTEREST 

Section 1. General Principles· 

1. This Arrangement Regarding Regulatory Cooperation ~nd Technical Assistance 

(Arrangement} describes the intent of the Authorities and does not create legally binding 

obligations or supersede domestic law of either Authority. 

2. The Authorities recognize the desirability of providing assistance, 

as set forth in Clauses II and Ill, to each other pursuant to this Arrangement. The 
provision of any such assistance should be consistent with the domestic laws of the 

. Authorities and the availability of resources. If assistance is outside the competency of 

jurisdiction of an Authority then the Authority shall use its best efforts to provide 

assistance. Where the provision of assistance would be contrary to the public interest 

such assistance may be denied. 

3. The Authorities intend to engage in a dialogue on all aspects of futures and 

options regulation related to the development and operation of futures and options 

markets on agricultural commodities and other applicable derivatives trading in India. 

Section 2. Consultation 

The Authorities intend to consult periodically about matters of mutual interest in 

order to promote cooperation and market integrity, and to further the protection of 

futures and options market participants. Such consultation may cover, among other 

things, the development of prudential standards and conduct of business standards for 

the operation of futures businesses (brokers, dealers and markets), the development of 

clearance and settlement and other market systems, market oversight, and the 

administration of the Authorities' futures and options laws, rules, and regulations. The 

purpose of such consultation is to assist in the development of effective approaches to 

strengthening domestic and international futures and options markets. 

Section 3. Information Sharing 

The Authorities intend to share information on each other's laws, rules and 

regulations pertaining to futures markets and options markets, if applicable, and how 

those laws, rules and regulations are implemented and interpreted. 

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CLAUSE II - PROVISION OF TECHNICAL ASSISTANCE 

Section 1. Technical Assistance 

The CFTC intends to consult with and provide capacity building advice and 

assistance to the FMC regulatory programs related to the development, administration, 

and operation of the agricultural futures and options markets in India. Such consultation 

should identify specific types of technical assistance the Authorities believe are 

desirable and reasonable. Technical assistance may include the provision of 

information and advice relating to the development of: 

a. Systems to improve and/or promote the risk management, price 

discovery and hedging functions of markets; 

b. Futures and options products and the basics of designing contracts 

not readily susceptible to manipulation; 

c. Order handling systems; 

d. Trade recording and comparison systems; 

e. Quotation and transaction data transmission systems; 

f. Clearance and settlement mechanisms; 

g. Regulatory requirements and best practices relating to market 

professionals, products and markets; 

h. Systems and related regulatory mechanisms relating to financial 

surveillance; 
i. Systems for effective market surveillance and enforcement 

programs; 

j. Disclosure and other procedures and practices to inform and 

protect futures and options customers and market participants; and 

k. .Information on transparency. 

Section 2.. Specific Technical Assistance 

Specific technical assistance may be provided in the following manner: 

a. Comment by CFTC staff on draft laws and regulations; 

b. Availability of CFTC staff and other relevant experts to provide 

consultation regarding futures and options markets;-

c. General training sessions concerning futures and options 

regulation; and 

d. Internship programs of short duration for FMC personnel at the 

CFTC, conditioned upon the requisite legal authority to do so and 

the entering into of any necessary confidentiality agreements. 

Section 3.. Availability 

The Authorities recognize that specific technical assistance is subject to the 

availability of resources. 

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CLAUSE Ill - COOPERATION 

Each Authority may, subject to Clause IV, Section 4 give assistance as to: 

a. The granting of licenses, waivers, or exemptions for the conduct of 

futures business; 

b. The laws and regulations applicable to futures business; 

c. The laws and regulations applicable to futures exchanges and other 

types of markets; 

d. The oversight of futures exchanges by regulatory and market 

authorities: 

e. The prevention and detection of futures and options fraud and other 

irregularities or unlawful activities in connection with the offer, 

purchase or sale of any futures or options contract; and 

f. The prevention and detection of market manipulation. 

CLAUSE IV - OPERATIONS 

Section 1. Laws, Rules and Requirements 

The Authorities have exchanged general information on the laws, rules and 

requirements applicable to the confidentiality and use of information and intend to abide 

by the same. 

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Section 2. Permissible Uses of Information 

The requesting Authority may use non-public information and non-public 

documents furnished in response to a request for assistance under this arrangement 

solely for: the purposes set forth in the request for assistance, including ensuring 

compliance with the laws, regulations and/or requirements related to the request; and a 

purpose within the general framework of the use stated in the request for assistance, 

including conducting a civil or administrative enforcement proceeding, assisting in a 

criminal prosecution, or conducting any investigation for any general charge applicable 

to the violation of the provision specified in the request where such general charge 

pertains to a violation of the laws, regulations and/or requirements administered by the 

requesting Authority. 

, If a requesting Authority intends to use information furnished under this 

Arrangement for any purpose other than those stated above, it must obtain the consent 

of the requested Authority. 

Section 3. Confidentiality 

Each Authority will keep confidential requests made under this Arrangement, the 

contents of such requests, and any matters arising under this Arrangement, including 

consultations between or among the Authorities, and unsolicited assistance. After 

consultation with the requesting Authority, the requested Authority may disclose the fact 

that the requesting Authority has made the request if such disclosure is required to carry 

out the request. 

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The requesting Authority will not disclose non-public documents and information 

received under this Arrangement, except as contemplated by Clause IV, Section 2, or in 

response to a legally enforceable demand. In the context of a civil or administrative 

enforcement proceeding, disclosure may be made solely in such a proceeding to which 

the requesting Authority or the government of the requesting Authority is a party. In the 

event of a legally enforceable demand, the requesting Authority will notify the requested 

Authority prior to complying with the demand, and will assert such appropriate legal, 

exemptions or privileges with respect to such information ·as may be available. The 

requesting Authority will use its best efforts to protect the confidentiality of non-public 

documents and information received under this Arrangement. 

Section 4. Requests 

Requests for assistance under Clause 111, procedures for making and executing 

such requests, permissible uses of information, confidentiality requirements, costs and 

<?ther matters not explicitly included in this Arrangement will be addressed on a case-bycase basis. 

Section 5. Official Contacts 

To further ensure the effective operation of this Arrangement, and to facilitate 

communication between the Authorities, the Authorities hereby designate the contact 

officials set forth in Attachment A. 

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CLAUSE V - FUTURE ASSURANCES 

1. The Authorities plan to regularly review their· efforts pursuant to this 

Arrangement with a view toward improving communication between them. In this 

regard, when material additions or amendments to United States and/or Indian futures 

and options laws take effect the Authorities intend to consider whether this 

Arrangement should be supplemented or superseded. 

2. The Authorities intend to cooperate to the fullest extent permitted by 

applicable law and where relevant will work toward bringing applicable information 

sharing law into compliance with international benchmarks. 

3. The Authorities intend to move toward more formal information sharing 

arrangements after they have some experience with the operation of this Arrangement. 

4. This Arrangement is not intended to supersede the IOSCO Multilateral 

MOU or any other arrangement to which the Authorities are a party. 

CLAUSE VI - EFFECTIVE DATE AND TERMINATION 

Section 1 ~ Effective Date 

This Arrangement is effective from the date of its signing by the Authorities. 

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Section 2.. Termination 

This Arrangement may be terminated at any time by either Authority giving thirty 

days written notice to the other Authority. If such notice is given, this Arrangement 

continues to have effect with respect to all requests for assistance under Clause Ill that 

are made before the effective date of notification until the requesting Authority 

terminates the matter for which assistance was requested. 

This Arrangement is executed in duplicate in Mumbai, India on 18th October, 

2006. 

FOR THE 

UNITED STATES COMMODITY 

FUTURES TRADING COMMISSION: 

~c REUBEN JEFFERY Ill 

CHAIRMAN 

9 

FOR THE 

FORWARD MARKETS 

COMMISSION OF INDIA: 

S.SUNDARESHAN 

CHAIRMAN 
ATTACHMENT A 

The United States Commodity Futures Trading Commission designates as its contact 

official: 

Director 

Office of International Affairs 

Commodity Futures Trading Commission 

3 Lafayette Centre 

1155 21st Street, NW 

Washington, DC 20581-0001 

USA 

Tel: (202) 418 5645 

Fax: (202) 418 5548 

e-mail: international@cftc.gov 

Office of the Forward Markets Commission designates as its contact official: 

Anupam Mishra 

Director(IR) 

Forward Markets Commission, 

"Everest" 3rd Floor ' ' 100, Marine Drive, 

MUMBAI - 400 002 

INDIA. 

Tel: 91-22-22795307/22026541 

Fax: 91-22-22812086 

e-mail: anupam mishra@hotmail.com 

anupam.fmc@nic.in 

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