July 14, 2020
CFTC Adopts Final Trade Option Rule - Energy and Natural Resources - United States
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Final Rule Amending Rules Applicable to Trade Options

3/28/ · The Commodity Futures Trading Commission (CFTC or Commission) adopted a final rule effective March 21, , 1 that eliminates the reporting and recordkeeping requirements under the CFTC’s existing trade option exemption for counterparties that are neither swap dealers (SDs) nor major swap participants (MSPs) (these non-SD/MSP counterparties are referred to herein as “commercial end-users”). 2. 3/21/ · The final rule unanimously approved by the CFTC on March 16, significantly reduces the number of rules applicable to trade options under CFTC Rule (c). Below is . The Commodity Options Final Rule contains an IFR that establishes a new "trade option exemption" for certain physical delivery commodity options. Since , CTFC regulations have included a trade option exemption that exempted options offered to commercial end users from the CFTC’s prohibition against off-exchange commodity option transactions.

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3/21/ · The final rule unanimously approved by the CFTC on March 16, significantly reduces the number of rules applicable to trade options under CFTC Rule (c). Below is . 4/30/ · § 4a(a)(1) of the Commodity Exchange Act (CEA). The final trade options rule should make clear that trade options are exempt from position limits. As the Commission recognized in promulgating the interim final rule establishing the trade options exemption, “position limits apply only to speculative positions. CHAPTER I - COMMODITY FUTURES TRADING COMMISSION; PART 32 - REGULATION OF COMMODITY OPTION TRANSACTIONS § Trade options. 17 CFR § - Trade options. CFR ; prev | next § Trade options. (a) Subject to paragraphs (b), (c), and (d) of this section, the provisions of the Act, including any Commission rule.

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Trade Option Background

CHAPTER I - COMMODITY FUTURES TRADING COMMISSION; PART 32 - REGULATION OF COMMODITY OPTION TRANSACTIONS § Trade options. 17 CFR § - Trade options. CFR ; prev | next § Trade options. (a) Subject to paragraphs (b), (c), and (d) of this section, the provisions of the Act, including any Commission rule. 3/18/ · Rule recordkeeping obligations involve End Users keeping certain business records—what CFTC rules refer to as “full, complete and systematic records, together with all pertinent data and memoranda, with respect to each [trade option] in which they are a counterparty.” 5 Existing rules also require End Users to obtain a legal entity identifier (“LEI”) if they transact with an . 3/21/ · The final rule unanimously approved by the CFTC on March 16, significantly reduces the number of rules applicable to trade options under CFTC Rule (c). Below is .

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4/30/ · § 4a(a)(1) of the Commodity Exchange Act (CEA). The final trade options rule should make clear that trade options are exempt from position limits. As the Commission recognized in promulgating the interim final rule establishing the trade options exemption, “position limits apply only to speculative positions. Before entering into an agricultural trade option, the CFTC requires that an ATOM disclose to its customer information about the general risks of agricultural trade options. Disclosures can be printed or electronic. An ATOM must also provide its customers with: a written confirmation of each agricultural trade option contract;. The Commodity Options Final Rule contains an IFR that establishes a new "trade option exemption" for certain physical delivery commodity options. Since , CTFC regulations have included a trade option exemption that exempted options offered to commercial end users from the CFTC’s prohibition against off-exchange commodity option transactions.

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3/21/ · On March 16, , the Commodity Futures Trading Commission ("CFTC") unanimously approved amendments to the rules applicable to certain physically-settled options referred to as "trade options." This final rule substantially reduces the regulatory burdens for end-users entering into trade options by eliminating reporting and recordkeeping blogger.com: Cadwalader, Wickersham & Taft LLP. Before entering into an agricultural trade option, the CFTC requires that an ATOM disclose to its customer information about the general risks of agricultural trade options. Disclosures can be printed or electronic. An ATOM must also provide its customers with: a written confirmation of each agricultural trade option contract;. 9/23/ · The CFTC also stated that “federal speculative position limits should not apply to trade options” and that the matter would be addressed in the context of future position limit rulemaking. CFTC No-Action Letter No. is no longer applicable and was withdrawn as the TO Final Rule took effect. 1 Trade Options, 81 FR (March 21, ).