On 02 September 2025, the United States Commodity Futures Trading Commission (US CFTC) issued CFTC Letter No. 25-28, granting no-action relief to QCX LLC, a designated contract market, and QC Clearing LLC, a registered derivatives clearing organization. The US CFTC’s Division of Market Oversight and Division of Clearing and Risk confirmed that staff will not recommend enforcement actions for failure to comply with certain swap reporting and recordkeeping obligations in respect of fully collateralised binary option contracts and variable payout contracts executed under QCX rules. The relief applies under specific conditions and mirrors earlier no-action positions granted to other similarly situated market operators.
“QCEX requested a no-action position … from the swap data reporting and recordkeeping requirements of sections 38.8(b), 38.10, 38.951 (in part), 39.20(b)(2), along with Parts 43 and 45 of the Commission’s regulations.”
Background and Procedural Context
QCX LLC and QC Clearing LLC sought relief for listing fully collateralised option contracts that function as either binary contracts (all-or-nothing settlement) or variable payout contracts (pro-rated settlement based on final settlement price).
Although these contracts fall within the statutory definition of a “swap” under the Commodity Exchange Act, QCX characterised them as structurally closer to exchange-traded options on futures, and argued that strict swap reporting under Parts 43 and 45 would not align with their market structure.
CFTC No-Action Position
The US CFTC granted relief on the basis of strict conditions, including:
- All contracts must be fully collateralised as defined in Regulation 39.2.
- Contracts must clear exclusively through QC Clearing.
- QCX must publish trade data (timestamp, contract, quantity, price) promptly on its website.
- QCX must provide transactional information to the CFTC under Regulation 16.02.
- Records must remain open to inspection by the CFTC, DOJ, SEC, or prudential regulators.
The No-Action letter states that the relief is limited to staff’s no-action discretion and does not represent a binding Commission view.
This no-action letter gives QCX breathing room by exempting its binary and variable payout contracts from full swap reporting rules, provided they remain fully collateralised and transparent.
(Source: https://www.cftc.gov/PressRoom/PressReleases/9113-25)
