U.S. COMMODITY FUTURES TRADING COMMISSION

Three Lafayette Centre 

1155 21st Street, NW, Washington, DC 20581 

Telephone: (202) 418-5260 

Facsimile: (202) 418-5527

Division of 

Market Oversight

CFTC letter No. 06-24 

September 29, 2006 

No-Action 

Division of Market Oversight 

Arthur W. Hahn, Esq. 

KattenMuchinRosenman LLP 

525 W. Monroe Street 

Chicago, IL 60661-3693 

 Re: Euronext Paris N.V.’s Request for Amendment of Commodity Futures Trading 

Commission Staff Letter No. 99-33 (August 10, 1999) 

Dear Mr. Hahn: 

 On August 10, 1999, the Division of Trading and Markets of the Commodity Futures 

Trading Commission (Commission or CFTC)issued a no-action letter in which it confirmed that 

it would not recommend that the Commission institute enforcement action against ParisbourseSBF

SA (Parisbourse) or the members of the Marché à Terme International de France (MATIF) or 

Marché des Options Negociables de Paris (MONEP)1 solely based upon Parisbourse’s failure to 

obtain contract market designation pursuant to Sections 5 and 5a of the Commodity Exchange 

Act (Act) if: (i) MATIF and MONEP members use Parisbourse’s electronic trading and order 

matching system, the Nouveau Systeme de Cotation (NSC), terminals located in the U.S. to trade 

for their proprietary accounts through NSC; (ii) MATIF and MONEP members who are 

registered with the Commission as futures commission merchants (FCM) use NSC terminals 

located in the U.S. to submit orders from U.S. customers for transmission to NSC; and/or (iii) 

MATIF and MONEP members that are registered with the Commission as FCMs or that are 

exempt from such registration pursuant to Rule 30.10 (Rule 30.10 Firms) accept orders through 

U.S. automated order routing systems (AORS) from U.S. customers for submission to NSC.2

 By letter to the Division of Market Oversight (Division) dated August 21, 2006, you 

requested an amendment to the above no-action relief such that current and future Euronext Paris 

members that are registered with the Commission as commodity pool operators (CPO) or 

commodity trading advisors (CTA), or that that are exempt from such registration pursuant to 

Commission Rule 4.13 or 4.14, may enter orders directly into the Exchange’s trading and order 

 

1

 Parisbourse, now known as Euronext Paris N.V. (Euronext Paris or the Exchange), is a component of Euronext 

N.V., a holding company incorporated under Dutch law that operates through local subsidiaries that was formed on 

September 22, 2000, when the exchanges of Amsterdam, Brussels and Paris merged. 

2

 CFTC Staff Letter No. 99-33 (August 10, 1999) (Parisbourse no-action letter).
Arthur W. Hahn, Esq. 

Page 2 of 3 

matching system, LIFFE CONNECT®,3 through terminals located in the U.S. on behalf of the 

pools which they operate or the customer accounts over which they exercise trading discretion, 

respectively. All such trading activity would be cleared through an FCM or Rule 30.10 Firm.4

 You represent that CPOs and CTAs have sought to become Euronext Paris members in 

order to obtain a more favorable fee arrangement or to enjoy the trading immediacy made 

possible by direct access to LIFFE CONNECT®. This would benefit the pools operated by the 

CPO and the U.S. customer accounts for which the CTA has trading discretion. You represent 

that there is an urgent commercial need to provide CPOs and CTAs with the ability to enter 

orders directly into LIFFE CONNECT® terminals located in the U.S. on behalf of the pools 

which they operate or the customer accounts over which they exercise trading discretion. If the 

amendment is granted, Euronext Paris understands and agrees that it will continue to be subject 

to the applicable terms and conditions set forth in the Parisbourse no-action letter.5

 The Division has reviewed the requested amendment and the earlier no-action letter and 

has determined that granting the amendment, subject to the condition below, should not have a 

significant impact on the no-action relief as granted and would not be contrary to public policy. 

Accordingly, the Division confirms that it will not recommend that the Commission institute 

enforcement action against Euronext Paris or its members solely based upon the Exchange’s 

failure to seek designation as a contract market or registration as a derivatives transaction 

execution facility under Sections 5 and 5a of the Act6

 if Euronext Paris members who are 

registered with the CFTC as CPOs or CTAs, or who are exempt from such CPO or CTA 

registration pursuant to Commission Regulation 4.13 or 4.14, enter orders directly into LIFFE 

CONNECT® through terminals located in the U.S. on behalf of the pools which they operate or 

the customer accounts over which they exercise trading discretion, provided that all such trading 

activity is cleared through a registered FCM or a firm that is exempt from registration by the 

Commission pursuant to Rule 30.10. This no-action position is subject to compliance with the 

following condition: 

All orders that are transmitted through LIFFE CONNECT® by a member of Euronext Paris that 

is operating pursuant to the no-action relief provided herein will be solely for the member’s own 

account unless (i) such member is registered with the CFTC as an FCM or is a Rule 30.10 Firm, 

 

3

 LIFFE CONNECT® has replaced NSC as the Exchange’s electronic trading and order matching system. 

4

 You represent that all positions entered into on Euronext Paris by such CPOs and CTAs (and persons exempt 

from registration as such) on behalf of such pools and U.S. customers would be guaranteed by a clearing member of 

Euronext Paris without limitation. 

5

 The Division has issued no-action letters permitting, subject to conditions, CPO and CTA members of Euronext 

Amsterdam and NYMEX Europe Limited to enter orders through trading terminals located in the United States for 

the pools which they operate or the accounts over which they have discretionary authority, respectively. CFTC Staff 

Letters No. 05-16 (August 26, 2005) and No. 05-24 (December 16, 2005). In addition, the Division recently 

amended the no-action relief granted to Eurex Deutschland to include similarly situated CPOs and CTAs. CFTC 

Staff Letter No. 06-08 (April 21, 2006). 

6

 The Parisbourse no-action letter referred only to contract market designation because at that time there was no 

provision in the Act or rules thereunder governing a derivatives transaction execution facility. Because of the 

creation of that category of board of trade under the Commodity Futures Modernization Act, the Division amended 

its relief accordingly. 
Arthur W. Hahn, Esq. 

Page 3 of 3 

or (ii) such member is registered with the CFTC as a CPO or CTA, or is exempt from such 

registration pursuant to Commission Regulation 4.13 or 4.14, provided that an FCM or Rule 

30.10 Firm acts as clearing firm with respect to all activity conducted by such CPO or CTA 

through the submission of orders on LIFFE CONNECT®.7

Except for the now superseded conditions recited in the footnote below, the Division 

notes that its no-action position does not relieve Euronext Paris from compliance with the terms 

and conditions set forth in the Parisbourse no-action letter. As with all no-action letters, the 

Division retains the authority to condition further, modify, suspend, terminate, or otherwise 

restrict the terms of the no-action relief provided herein, in its discretion. The Division 

specifically notes that its no-action position does not alter the general requirement that a firm 

operating pursuant to the no-action relief provided herein must be appropriately registered or 

exempt from such registration to engage in the offer or sale of a foreign futures contract or a 

foreign option transaction for or on behalf of a United States customer. 

The no-action position taken herein is taken by the Division only and does not necessarily 

reflect the views of the Commission or any other unit or member of the Commission’s staff. It is 

based upon the information and representations contained in Euronext Paris’ request for noaction relief and the amendment thereto. Any materially different, changed, or omitted facts or 

circumstances may render this letter void. 

 If you have any questions regarding this correspondence, please contact Duane C. 

Andresen, Special Counsel, Division of Market Oversight, at (202) 418-5492. 

 Very truly yours, 

 Richard A. Shilts 

 Director 

cc: Gregory C. Prusik, Vice-President, Compliance and Registration, NFA 

Branch Chief, Audit and Financial Review Unit, Division of Clearing and Intermediary 

Oversight, Chicago Regional Office 

 

7

 This supersedes the following conditions enumerated in the Parisbourse no-action letter: (i) “All orders that are 

transmitted through NSC by a member of MATIF or MONEP that is operating pursuant to the no-action relief 

provided herein and that is not registered with the Commission as an FCM or that is not a Rule 30.10 Firm will be 

solely for ‘proprietary accounts,’ as defined herein, of such MATIF or MONEP member;” and (ii) “All orders for 

United States customers accepted through an AORS and/or transmitted by MATIF or MONEP members through 

NSC will be intermediated by a MATIF or MONEP member that is either registered with the Commission as an 

FCM or is a Rule 30.10 Firm, to the extent required by Commission regulation.”