Release Number 8382-21

CFTC Staff Issues Conditional Relief from Reporting Fully Collateralized Binary Option Data to Swap Data Repositories

April 22, 2021

Washington, DC — The Commodity Futures Trading Commission today announced that the Division of Data, the Division of Market Oversight, and the Division of Clearing and Risk have provided no-action relief to KalshiEX LLC, a designated contract market, and LedgerX, LLC, a derivatives clearing organization, from reporting to swap data repositories, data for binary option transactions executed on or subject to the rules of Kalshi and cleared by LedgerX. The no-action relief also exempts Kalshi and LedgerX from certain related recordkeeping requirements, and is consistent with staff-level relief previously provided to other similarly situated designated contract markets and derivatives clearing organizations.

The relief 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 covered by the relief are fully collateralized, as the term is defined in CFTC regulations;
  • Kalshi clears all binary options through LedgerX and LedgerX clears all of Kalshi’s binary options;
  • Kalshi publishes on its website certain transaction information promptly after execution;
  • Kalshi provides the CFTC with all transaction information as required in CFTC Regulation 16.02;
  • Kalshi and LedgerX each comply with all remaining applicable reporting and recordkeeping requirements;
  • No Kalshi participant clears a product covered by the relief through a third-party clearing member; and
  • Kalshi and LedgerX continue to keep records not included in the relief open to inspection upon request by any of several regulators, including the CFTC, and provide copies of such records on the request of such regulators, at the expense of Kalshi or LedgerX, as applicable.