trade option exemption

CFTC Approves Final Rule to Amend the Trade Option Exemption by Eliminating Certain Reporting and Recordkeeping Requirements for End-Users

On March 16, the U.S. Commodity Futures Trading Commission approved a final rule that eliminated certain requirements “for trade option counterparties that are neither swap dealers nor major swap participants[.]”  Release.

CFTC No-Action Letter on Trade Option Exemption

On August 15, the CFTC issued a no-action letter providing that, for a limited time, market participants can rely on the trade option exemption in CFTC regulation 32.3 without complying with specified provisions.  The no-action letter is effective until the earlier of December 31 and the effective date of any final action taken by the CFTC on the trade option exemption interim final rules.  CFTC Release.    

CFTC Final Rule and Interim Final Rule on Commodity Options

On April 18, pursuant to Section 721 of the Dodd-Frank Act, the CFTC adopted a final rule authorizing commodity options to transact subject to the same rules applicable to other swaps. In addition, the CFTC adopted an interim final rule providing a trade option exemption for certain physically delivered commodity options used by commercial market participants. The final rule and the interim final rule will be effective 60 days after publication in the Federal Register. The compliance date for the final rule and the interim final rule will be 60 days after further definition of the term “swap” by the CFTC and the SEC. CFTC Fact Sheet. CFTC Q&A.