CFTC Grants Reporting Exemption To Binary Options Exchanges

The CFTC Divisions of Market Oversight and of Clearing and Risk (collectively, the "Divisions") granted no-action relief to two binary options exchanges from swap data reporting requirements. In separate letters, the Divisions granted relief to (i) Cantor Futures Exchange, a designated contract market ("DCM"), and Cantor Clearinghouse (collectively, "Cantor"), a derivatives clearing organization ("DCO"), and (ii) the North American Derivatives Exchange ("NADEX"), a DCM and DCO.

The relief exempts Cantor and NADEX from the requirement that binary options trade data must be reported to swap data repositories. It also exempts NADEX and Cantor from most associated recordkeeping requirements. To qualify for the relief, "all binary options and spread contracts [must be] either fully margined or fully collateralized." The Divisions explained that the exchanges must publish transactional data on their respective websites in a timely manner. Additionally, no transactions covered by the exemption can be cleared through a third party.