Modification of no-action position with respect to Part 43 and 45 reporting, as well as related sections of Parts 38 and 39, for binary options executed on or pursuant to the rules of MIAXdx and cleared through MIAXdx.

Summary: Modification of no-action position with respect to Part 43 and 45 reporting, as well as related sections of Parts 38 and 39, for binary options executed on or pursuant to the rules of MIAXdx and cleared through MIAXdx.

CFTC LETTER NO. 25-45 NO-ACTION DECEMBER 11, 2025

1

Division of Market Oversight

Division of Clearing and Risk

Re:

Supplemental Staff Letter Regarding No-Action Position with Respect to

Commission Regulations 38.8(b), 38.10, 38.951 (in Part), 39.20(b)(2), and Parts 43

and 45, for MIAXdx Contracts

Introduction

The Division of Market Oversight (“DMO”) and the Division of Clearing and Risk (“DCR”

and, together with DMO, the “Divisions”) of the Commodity Futures Trading Commission

(“CFTC” or “Commission”) are issuing this letter in response to a request (the “Request”) from

LedgerX LLC d/b/a MIAX Derivatives Exchange LLC (“MIAXdx”).1 MIAXdx requested, on its

own behalf and on behalf of its participants, to amend Staff Letter 24-12.2 Staff Letter 24-12

granted MIAXdx’s request for a no-action position from the swap data reporting and

recordkeeping requirements of sections 38.8(b), 38.10, 38.951 (to the extent that regulation 38.951

requires compliance with Part 45 of the Commission’s regulations), 39.20(b)(2), and Parts 43 and

45 of the Commission’s regulations (collectively, the “Relevant Regulations”). MIAXdx has now

requested that the Divisions modify the no-action position granted in Staff Letter 24-12 to remove

condition 6,3 which provides that “[n]o MIAXdx participant clears a MIAXdx Contract through a

third-party clearing member.”4

Background

MIAXdx is a designated contract market (“DCM”) and a derivatives clearing organization

(“DCO”).5 MIAXdx lists for trade “binary options on the outcomes of various economic or

commercial events” (the “MIAXdx Contracts”).6 MIAXdx Contracts “settle at expiration by the

payment of an absolute amount to the holder of one side of the option and no payment to the

1 Letter from M. Bailey to R

MIAXdx is a designated contract market (“DCM”) and a derivatives clearing organization

(“DCO”).5 MIAXdx lists for trade “binary options on the outcomes of various economic or

commercial events” (the “MIAXdx Contracts”).6 MIAXdx Contracts “settle at expiration by the

payment of an absolute amount to the holder of one side of the option and no payment to the

1 Letter from M. Bailey to R. Varma and R. Haynes re: Request for Amended No-Action Relief from Certain Swap

Data Reporting and Recordkeeping Requirements (July 1, 2025).

2 CFTC Letter No. 24-12 (Sept. 3, 2024), available at https://www.cftc.gov/csl/24-12/download.

3 Request at 1.

4 CFTC Letter No. 24-12 at 5.

5 MIAXdx is also registered as a swap execution facility (“SEF”), but it has not requested a no-action position on

behalf of its SEF in the Request.

6 Request at 2. MIAXdx stated that it has “listed cash-settled binary options on cryptocurrencies,” but “expects to

offer other types of binary options in the future.” Request at 2 n.5.

CFTC Logo

U.S. COMMODITY FUTURES TRADING COMMISSION

Three Lafayette Centre

1155 21st Street, NW, Washington, DC 20581

Telephone: (202) 418-5000

www.cftc.gov

2

counterparty, depending on the occurrence or non-occurrence of the event that is the subject of the

contract.”7

As options, binary options fall within the Commission’s plenary options authority under

Commodity Exchange Act (“CEA”) section 4c(b).8 CEA section 4c(b), in relevant part, prohibits

any person from offering, entering into, or confirming the execution of a transaction involving any

commodity regulated under the CEA that “is of the character of, or is commonly known to the

trade as, an ‘option’ . . .” contrary to any Commission rule prohibiting the transaction or allowing

it pursuant to specified terms and conditions. When promulgating Commission regulation 32.2,

the Commission stated that “the swap definition . . . includes options . .

on of a transaction involving any

commodity regulated under the CEA that “is of the character of, or is commonly known to the

trade as, an ‘option’ . . .” contrary to any Commission rule prohibiting the transaction or allowing

it pursuant to specified terms and conditions. When promulgating Commission regulation 32.2,

the Commission stated that “the swap definition . . . includes options . . . (whether or not traded on

a DCM).”9 Commission regulation 32.2 states, in relevant part, that commodity option

transactions must be conducted in compliance with the CEA and the Commission’s regulations

related to swaps.10

The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”)11

amended the CEA by adding a definition of “swap.”12 The Dodd-Frank Act required the

Commission and the Securities and Exchange Commission to further define jointly the term

“swap.” In jointly adopting such further definition, the Commissions stated that “the statutory

swap definition explicitly provides that commodity options are swaps[.]”13 MIAXdx represents

that its binary options “are swaps within the meaning of the [Commodity Exchange Act (‘CEA’)]”

because “Section 1a(47) of the CEA expressly defines ‘swaps’ to include options as well as any

contract that provides for any purchase, sale, payment, or delivery that is dependent on the

occurrence, non-occurrence, or the extent of the occurrence of an event or contingency associated

with a potential financial, economic, or commercial consequence.”14

Pursuant to the Dodd-Frank Act, the Commission promulgated various regulations

applicable to swaps, including the Relevant Regulations. The Relevant Regulations apply swap

reporting and recordkeeping obligations to DCMs, DCOs, and other market participants

r the extent of the occurrence of an event or contingency associated

with a potential financial, economic, or commercial consequence.”14

Pursuant to the Dodd-Frank Act, the Commission promulgated various regulations

applicable to swaps, including the Relevant Regulations. The Relevant Regulations apply swap

reporting and recordkeeping obligations to DCMs, DCOs, and other market participants. In

particular, Parts 43 and 45 require, respectively, real-time reporting of swap transaction and pricing

data to swap data repositories (“SDRs”) for purposes of public dissemination and reporting of

broader swap data to SDRs for the CFTC’s use in fulfilling its surveillance and market analysis

missions.

On September 3, 2024, the Divisions issued Staff Letter 24-12, which provided MIAXdx

a no-action position related to swap data reporting and recordkeeping requirements under the

7 Id. at 2.

8 7 U.S.C. § 6c(b).

9 Commodity Options, 77 Fed. Reg. 25320, 25321 n.6 (Apr. 27, 2012).

10 17 C.F.R. § 32.2.

11 Public Law 111–203, 124 Stat. 1376 (2010).

12 7 U.S.C. § 1a(47).

13 Further Definition of “Swap,” “Security-Based Swap,” and “Security-Based Swap Agreement;” Mixed Swaps;

Security-Based Swap Agreement Recordkeeping, 77 Fed. Reg. 48207, 48236 (Aug. 13, 2012). See also In re:

Blockratize, Inc. d/b/a Polymarket.com, CFTC Dkt. No. 22-09, at 2, 7 (Jan. 3, 2022) (“binary options . . . constitute

swaps under the CFTC’s jurisdiction, and therefore can only be offered on a registered exchange in accordance with

the Act and Regulations”).

14 Request at 2; see also 7 U.S.C. § 1(a)(47)(A)(i)-(ii).

ent Recordkeeping, 77 Fed. Reg. 48207, 48236 (Aug. 13, 2012). See also In re:

Blockratize, Inc. d/b/a Polymarket.com, CFTC Dkt. No. 22-09, at 2, 7 (Jan. 3, 2022) (“binary options . . . constitute

swaps under the CFTC’s jurisdiction, and therefore can only be offered on a registered exchange in accordance with

the Act and Regulations”).

14 Request at 2; see also 7 U.S.C. § 1(a)(47)(A)(i)-(ii).

3

Relevant Regulations for the MIAXdx Contracts.15 In granting that request, the Divisions noted

that the no-action position taken in Staff Letter 24-12 was similar to and consistent with previous

no-action positions taken with respect to reporting certain binary options transactions.16 The no-

action position taken in Staff Letter 24-12 contained several conditions, including condition 6,

which conditions the no-action position on MIAXdx prohibiting futures commission merchants

(“FCMs”) from intermediating clearing for MIAXdx Contracts.17

No-Action Position Requested

MIAXdx requested that the Divisions modify the no-action position granted in Staff Letter

24-12 to remove condition 6, which specifically provides that “[n]o Participants shall clear

MIAXdx Contracts through any third-party clearing member.”18

Condition 6 ties back to MIAXdx’s Order of Designation as a DCM, which states that

“[MIAXdx] shall not permit any FCM to clear trades executed on, or pursuant to the rules of, the

contract market on behalf of third-party customers, unless [MIAXdx] first notifies the Commission

of its intent to do so and submits any applicable rule changes pursuant to 17 C.F.R

ird-party clearing member.”18

Condition 6 ties back to MIAXdx’s Order of Designation as a DCM, which states that

“[MIAXdx] shall not permit any FCM to clear trades executed on, or pursuant to the rules of, the

contract market on behalf of third-party customers, unless [MIAXdx] first notifies the Commission

of its intent to do so and submits any applicable rule changes pursuant to 17 C.F.R. Part 40.”19 At

the time the Divisions issued Staff Letter 24-12, MIAXdx’s rulebook did not authorize FCMs to

intermediate clearing of MIAXdx Contracts.20 On May 30, 2025, MIAXdx submitted rulebook

amendments to the Commission that set out rules and procedures for FCMs to clear trades executed

on or pursuant to the rules of MIAXdx.21 In connection with those rulebook amendments,

MIAXdx has now requested that the Divisions modify the no-action position granted in Staff Letter

24-12 to remove condition 6.22 The requested modification would enable MIAXdx to rely on the

no-action position taken in Staff Letter 24-12 when reporting MIAXdx contracts that MIAXdx

participants and customers clear through third-party clearing members.

MIAXdx stated that the Divisions have previously granted similar no-action positions with

respect to the Relevant Regulations for similar contracts, without including a non-intermediation

condition prohibiting FCMs from clearing the contracts subject to the no-action position.23

MIAXdx also stated that, following its rulebook amendments to set its rules and procedures for

15 See CFTC Letter No. 24-12.

16 See id. at 4; see also CFTC Letter No. 17-31 (Jun. 30, 2017), available at https://www.cftc.gov/csl/17-31/download;

CFTC Letter No. 17-32 (Jun. 30, 2017), available at https://www.cftc.gov/csl/17-32/download; CFTC Letter No. 21-

11 (Apr. 22, 2021), available at https://www.cftc.gov/csl/21-11/download; CFTC Letter No. 24-09 (July 12, 2024),

available at https://www.cftc.gov/csl/24-09/download; CFTC Letter No. 24-12 (Sept

TC Letter No. 17-31 (Jun. 30, 2017), available at https://www.cftc.gov/csl/17-31/download;

CFTC Letter No. 17-32 (Jun. 30, 2017), available at https://www.cftc.gov/csl/17-32/download; CFTC Letter No. 21-

11 (Apr. 22, 2021), available at https://www.cftc.gov/csl/21-11/download; CFTC Letter No. 24-09 (July 12, 2024),

available at https://www.cftc.gov/csl/24-09/download; CFTC Letter No. 24-12 (Sept. 3, 2024), available at

https://www.cftc.gov/csl/24-12/download;

CFTC

Letter

No.

24-15

(Oct.

4,

2024),

available

at

https://www.cftc.gov/csl/24-15/download;

CFTC

Letter

No.

25-02

(Jan.

31,

2025),

available

at

https://www.cftc.gov/csl/25-02/download.

17 CFTC Letter No. 24-12 at 5.

18 Request at 1, 4.

19 In the Matter of the Application of LedgerX LLC for Designation as a Contract Market, Order of Designation (June

24,

2019),

available

at

https://www.cftc.gov/sites/default/files/filings/documents/2019/orgledgerxdcmorder190624.pdf.

20 See Request at 1.

21 See Letter from M. Bailey to C. Kirkpatrick re: Commission Regulation 40.6(a) – Rule Certification, LedgerX LLC

Submission No. 25-20 (May 30, 2025).

22 Request at 1.

23 See Request at 1; see also CFTC Letter No. 24-09 (July 12, 2024), available at https://www.cftc.gov/csl/24-

09/download and CFTC Letter No. 25-02 (Jan. 31, 2025), available at https://www.cftc.gov/csl/25-02/download.

4

FCMs to clear trades executed on or pursuant to the rules of MIAXdx, removing condition 6 from

the no-action position would be consistent with MIAXdx’s Order of Designation as a DCM and

Order of Registration as a DCO, which permit FCM intermediation of clearing if appropriate

rulebook amendments and other changes are made to facilitate such intermediation.24 In support

of their request, MIAXdx also reiterated representations made in its request for the no-action

position granted in Staff Letter 24-12, excluding its representation that no participants shall clear

MIAXdx Contracts through any third party clearing member:

• MIAXdx will require

ring if appropriate

rulebook amendments and other changes are made to facilitate such intermediation.24 In support

of their request, MIAXdx also reiterated representations made in its request for the no-action

position granted in Staff Letter 24-12, excluding its representation that no participants shall clear

MIAXdx Contracts through any third party clearing member:

• MIAXdx will require that all MIAXdx Contracts be fully collateralized;

• MIAXdx will clear the MIAXdx Contracts solely through MIAXdx;

• MIAXdx will publish on its website the following time and sales data for all MIAXdx

Contracts transactions promptly after execution thereof – trade timestamp, contract,

quantity, and price (in USD);

• MIAXdx shall provide DMO with transactional information as described in Commission

regulation 16.02;

• MIAXdx shall continue to comply with all SDR and recordkeeping requirements of the

CEA and Commission regulations, other than the Relevant Regulations, including (without

limitation) the applicable requirements of Parts 38 and 39 of the CFTC’s regulations (the

records described in this Undertaking 5 are referred to below as the “Required Records”);

• MIAXdx shall keep the Required Records open to inspection upon request by any

representative of the Commission, the United States Department of Justice, or the

Securities and Exchange Commission, or by any representative of a prudential regulator as

authorized by the Commission. Copies of all such records shall be provided at the expense

of MIAXdx to any representative of the Commission upon request. MIAXdx shall provide

copies of the Required Records either by electronic means, in hard copy, or both, as

requested by the Commission, with the sole exception that copies of records originally

created and exclusively maintained in paper form may be provided in hard copy only

es of all such records shall be provided at the expense

of MIAXdx to any representative of the Commission upon request. MIAXdx shall provide

copies of the Required Records either by electronic means, in hard copy, or both, as

requested by the Commission, with the sole exception that copies of records originally

created and exclusively maintained in paper form may be provided in hard copy only.

No-Action Position and Related Conditions

The Divisions have decided to take a no-action position consistent with MIAXdx’s

Request, subject to certain conditions described below, based largely on MIAXdx’s

representations and statements in support of the Request, because the Divisions believe, based on

MIAXdx’s representations, that the justifications underlying Staff Letter 24-12 continue to apply.

Given that MIAXdx has made rulebook amendments to allow FCM participation in clearing

intermediation, consistent with the requirements of its DCM Order of Designation and DCO Order

of Registration, the Divisions have determined it is appropriate to remove the corresponding

condition in Staff Letter 24-12, condition 6, prohibiting third-party clearing by participants. The

Divisions also believe that removing condition 6 is consistent with the approach taken in Staff

Letters 24-09 and 25-02, which do not contain a condition prohibiting third-party clearing by

24 Request at 1-2.

5

participants.25 The Divisions will not recommend that the Commission initiate an enforcement

action against MIAXdx or its participants for failure to comply with Commission regulations

38.8(b), 38.10, 38.951 (only to the extent that regulation 38.951 requires compliance with Part 45

of the Commission’s regulations), 39.20(b)(2), as well as the applicable provisions of Parts 43 and

45 of the Commission’s regulations, or the requirements of the relevant CEA provisions pursuant

to which the Relevant Regulations were promulgated, with respect to MIAXdx Contracts, subject

to the following conditions:26

1)

MIAXdx will

that regulation 38.951 requires compliance with Part 45

of the Commission’s regulations), 39.20(b)(2), as well as the applicable provisions of Parts 43 and

45 of the Commission’s regulations, or the requirements of the relevant CEA provisions pursuant

to which the Relevant Regulations were promulgated, with respect to MIAXdx Contracts, subject

to the following conditions:26

1)

MIAXdx will require all MIAXdx Contracts to be fully collateralized positions, as

defined by Commission regulation 39.2;27

2)

MIAXdx will clear all MIAXdx Contracts through MIAXdx and MIAXdx will

clear all MIAXdx Contracts;

3)

MIAXdx will publish on its website the following information for all MIAXdx

transactions promptly after execution thereof: trade timestamp, contract quantity,

and price;

4)

MIAXdx will provide the Commission with all transactional information as

described in Commission regulation 16.02;

5)

MIAXdx will comply with all reporting and recordkeeping requirements of the

CEA and CFTC regulations applicable to it in its respective capacities as a DCM

and a DCO, other than the Relevant Regulations, including, but not limited to, the

applicable requirements of Parts 38 and 39 of the Commission’s regulations (the

records required to be retained by this condition (5) are referred to below as the

“Required Records”);

6)

MIAXdx keeps the Required Records open to inspection upon request by any

representative of the Commission, the United States Department of Justice, or the

Securities and Exchange Commission, or by any representative of a prudential

regulator as authorized by the Commission. Copies of all such records shall be

provided, at the expense of MIAXdx, as applicable, to any representative of the

Commission upon request. MIAXdx, as applicable, shall provide copies of the

Required Records either by electronic means, in hard copy, or both, as requested

25 See CFTC Letter No. 24-09 (July 12, 2024), available at https://www.cftc.gov/csl/24-09/download and CFTC Letter

No

Copies of all such records shall be

provided, at the expense of MIAXdx, as applicable, to any representative of the

Commission upon request. MIAXdx, as applicable, shall provide copies of the

Required Records either by electronic means, in hard copy, or both, as requested

25 See CFTC Letter No. 24-09 (July 12, 2024), available at https://www.cftc.gov/csl/24-09/download and CFTC Letter

No. 25-02 (Jan. 31, 2025), available at https://www.cftc.gov/csl/25-02/download.

26 Some of these conditions regarding the no-action position may constitute a collection of information, as that term

is defined in the Paperwork Reduction Act, 44 U.S.C. §§ 3501 et. seq. The Office of Management and Budget

(“OMB”)—in accordance with 44 U.S.C. § 3507(d) and 5 C.F.R. §§ 1320.8 and 1320.10—has approved collection

3038-0049, entitled “Procedural requirements for requests for interpretative, no-action and exemptive letters,” for

such purposes. This collection would encompass collections made as part of exemptive or no-action position from the

Commission or its staff. The public is not required to respond to a collection of information that does not have a valid

OMB control number.

27 CFTC regulations define “fully collateralized position” as “a contract cleared by a derivatives clearing organization

that requires the derivatives clearing organization to hold, at all times, funds in the form of the required payment

sufficient to cover the maximum possible loss that a party or counterparty could incur upon liquidation or expiration

of the contract.” 17 C.F.R. § 39.2.

27 CFTC regulations define “fully collateralized position” as “a contract cleared by a derivatives clearing organization

that requires the derivatives clearing organization to hold, at all times, funds in the form of the required payment

sufficient to cover the maximum possible loss that a party or counterparty could incur upon liquidation or expiration

of the contract.” 17 C.F.R. § 39.2.

6

by the Commission, with the sole exception that copies of records originally created

and exclusively maintained in paper form may be provided in hard copy only.

This letter expresses a staff position only with respect to enforcement of the Relevant

Regulations. This letter does not state any legal conclusion regarding the characteristics or legality

of MIAXdx Contracts or the conduct of any person covered by the no-action position.28 This letter

and the no-action position taken herein represent the views of the Divisions only, and do not

necessarily represent the positions or views of the Commission or of any other Commission

division or office. This letter and the no-action position taken herein are not binding on the

Commission.29 Except as explicitly provided in this letter, the no-action position taken herein does

not excuse persons from compliance with any applicable requirements of the CEA or Commission

regulations. Further, this letter, and the no-action position contained herein, are based upon the

representations made to the Divisions. Any different, changed, or omitted material facts or

circumstances may render this letter void. As with all no-action letters, the Divisions retain the

authority to, in its discretion, further condition, modify, suspend, terminate or otherwise restrict

the terms of the no-action position provided herein

tion position contained herein, are based upon the

representations made to the Divisions. Any different, changed, or omitted material facts or

circumstances may render this letter void. As with all no-action letters, the Divisions retain the

authority to, in its discretion, further condition, modify, suspend, terminate or otherwise restrict

the terms of the no-action position provided herein.

If you have any questions concerning this letter, please contact Alicia Viguri, Division of

Market Oversight, at (202) 418-5219 or aviguri@cftc.gov; Paul Chaffin, Division of Market

Oversight, at (202) 418-5185 or pchaffin@cftc.gov; Owen Kopon, Division of Market Oversight,

at (202) 418-5360 or okopon@cftc.gov; or Eric Schmelzer, Division of Clearing and Risk, at (202)

836-0567 or eschmelzer@cftc.gov.

Sincerely,

____________________

________________________

Richard Haynes

Acting Director

Division of Clearing and Risk

Rahul Varma

Acting Director

Division of Market Oversight

28 For the avoidance of doubt, this letter is not intended to address whether any of the MIAXdx Contracts are consistent

with any statutory or regulatory requirement, including with respect to the requirements of CEA section 5c(c)(5)(C)

or Commission regulation 40.11. 17 C.F.R. § 40.11.

29 See 17 C.F.R. § 140.99(a)(2) (“A no-action letter binds only the issuing Division… and not the Commission or

other Commission staff.”).