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CFTC rejects OCC’s FX proposal

09 August 2010

The Commodity Futures Trading Commission has rejected a rule amendment proposed by the Options Clearing Corporation.

Read more: CFTC OCC Commodity Futures Trading Commission Options Clearing Corporation

It would have allowed the OCC to treat foreign currency contracts as securities options, allowing them to be traded and cleared as such, in cases where the exercise price was fixed at a nominal amount, such as one cent.

But the OCC only planned to do this if the CFTC agreed. The regulator found that the contracts were “the economic and functional equivalents of foreign currency futures contracts and not bona fide options”.