RELEASE Number
7583-17

June 30, 2017

CFTC’s DMO and DCR Issue Conditional No-Action Relief from Reporting Fully Margined/Collateralized Binary Option and Spread Contract Data to Swap Data Repositories

Washington, DC — The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight and Division of Clearing and Risk (Divisions) announced today that they have provided no-action relief to Cantor Futures Exchange, L.P. (CX), a designated contract market (DCM), and Cantor Clearinghouse, L.P. (CC), a derivatives clearing organization (DCO), from reporting to swap data repositories data associated with binary option transactions executed on or subject to the rules of CX and cleared by CC. The no-action relief also exempts CC and CX from retaining most related records.

In addition, the Divisions also announced that they provided similar relief to the North American Derivatives Exchange, Inc. (Nadex), which is a DCM and a DCO, regarding reporting data associated with binary options and spread contracts traded on or subject to Nadex’s DCM rules and cleared by Nadex in its capacity as a DCO.

The relief, announced in separate letters, provides reporting and recordkeeping relief in narrow circumstances to a limited universe of recipients and subject to a number of conditions, including that:

  • all binary options and spread contracts covered by the relief are fully margined or fully collateralized, as those terms are defined and described in CC’s, CX’s, and Nadex’s respective rules and CC’s and Nadex’s DCO Registration Orders;

  • CC continues to clear all of CX’s binary options and spread contracts and clears only the foregoing (and a comparable condition for Nadex binary options);

  • CX and Nadex continue to publish on their respective websites various transaction and position information that they currently publish on their respective websites promptly after execution in the case of certain transaction information;

  • no CX or Nadex participant, respectively, may clear a product covered by the relief through a third party clearing member;

  • CX, CC and Nadex each continue to comply with all applicable swap reporting and recordkeeping requirements (the Required Records); and

  • CX, CC and Nadex continue to keep the Required Records open to inspection upon request by any of several regulators, including the CFTC, and provide copies of such records upon the request of such regulators, at the expense of CX, CC, or Nadex as applicable.

Last Updated: June 30, 2017