Trust CFTC (and NFA) to kill any interesting initiative in the financial markets. Because if anything these political binaries are responsible for all the global financial problems, flash crash and greedy banks taking tax payers’ money to pay fat bonuses…
CFTC today put a stop to NADEX’s new interesting product – political binaries. These binary product besides being fun also serve a good purpose by allowing to hedge some of the expected outcomes of the elections (depending who gets elected) like economic implications, tax hikes, etc.
Instead of helping the only regulated binary exchange in the US (and the world) to pick up CFTC is basically killing this interesting initiative because this may be a ‘gaming or an activity that is unlawful under any State or Federal law’. I wonder if this is more important than keeping half a billion dollar in customer funds from disappearing (MF Global). As usual CFTC goes after the smaller members for petty issues instead of going after the bigger ones – those who actually commit massive size frauds and immoral activities.
CFTC Commences 90-day Review of NADEX’s Proposed Political Event Derivatives Contracts
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Seeks Public Comment on the Proposed Contracts
Washington, DC – The Commodity Futures Trading Commission (CFTC) on January 3, 2012, issued a letter informing the North American Derivatives Exchange (NADEX) that it has commenced a 90-day review of NADEX’s proposed political event derivatives contracts. The review is based on the possibility that these contracts may involve, among other issues, “gaming or an activity that is unlawful under any State or Federal law.”
The Commission requested that NADEX suspend the listing and trading of its proposed contracts during the review period.
The CFTC has posted NADEX’s submission on its website and is seeking public comment on the proposal during a 30-day comment period. In addition, the Commission is seeking public comment on specific questions related to political event contracts to assist in its evaluation of NADEX’s submission.
The 30-day public comment period ends on February 4, 2012, and the Commission’s 90-day review period ends on April 2, 2012.