CFTC Announces Reporting Relief for Certain Binary Option Transactions

The US commodity regulator today provided no-action relief to its authorised binary options exchanges, Cantor Futures Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term and North American Derivatives Exchange (Nadex), from reporting their transactions data to swap data repositories. The no-action relief also exempts Cantor and Nadex from retaining most related records.

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The CFTC said that both binary options operators must continue to publish transaction and position information on their websites promptly after Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term.

The conditional no-action relief applies to binary options and spread contracts accepted for clearing by the exchanges’ respective clearing subsidiaries, provided that those transactions are fully margined or fully collateralized.

In requesting the relief, Cantor and Nadex confirmed their compliance with all applicable swap reporting and recordkeeping requirements. In addition, all transactions are subject to mandatory clearing by entities determined by the regulator since the relief doesn’t allow the exchanges’ participants to clear a covered product through a third party clearing member.

The relief, announced in separate letters, also requires the two binary option marketplaces to keep their records open to inspection and to provide copies of such records upon request by any regulator.

Cantor and Nadex are each a regulated US derivatives exchange which most US investors use to trade binary options.

In the United States, all binary options have to be traded on a regulated exchange since the watchdog banned OTC brokers from the continent.