CFTC Grants Relief to Trading Platform on Binary Option Contracts
The CFTC issued a supplemental no-action letter that allows a trading platform to clear trading of fully-collateralized binary option contracts through an affiliated clearing organization.
Key provisions of the no-action relief include:
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Reporting and Recordkeeping Exemptions. The trading platform and clearing organization are exempt from certain reporting and recordkeeping requirements under CFTC regulations for the binary option contracts, provided they maintain compliance with other regulatory obligations.
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Transaction Transparency. The trading platform is required to publish trade data for all transactions promptly after execution, including timestamps, contract details, quantity and price.
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Capitalization Requirements. All contracts must be fully collateralized.
The CFTC said the no-action relief remains in effect unless modified or terminated by the CFTC.
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