The Commodity Futures Trading Commission’s Division of Clearing and Risk today issued a staff advisory relating to the clearing of options on spot commodity Exchange Traded Funds.
These options are on shares of the ETFs registered with the Securities and Exchange Commission as securities and the shares are listed and traded on a SEC-registered national securities exchange. These ETF options are cleared and settled by the Options Clearing Corporation as the sole issuer of all equity options.
The advisory states, in light of relevant precedents in the courts, it is substantially likely these spot commodity ETF shares would be held to be securities. Therefore, DCR’s position is the listing of these shares on SEC-registered national securities exchanges does not implicate the CFTC’s jurisdiction, and therefore, the clearing of these options by OCC would be undertaken in its capacity as a registered clearing agency subject to SEC oversight. Accordingly, it is DCR’s position that the CFTC does not have any more role regarding the clearing of these options on the part of OCC than with regard to OCC’s clearing of any security.
