The United States regulatory body, Commodity Futures Trading Commission (CFTC) Division of Market Oversight (DMO) and Division of Clearing and Risk (DCR) issued a joint advisory that directed exchanges and clearinghouses registered with the CFTC, guidelines for listing virtual currency derivatives on Monday.
DMO Director Amir Zaidi said, “The CFTC staff is committed to providing regulatory clarity as much as possible. As the virtual currency market continues to evolve, CFTC staff will seek to provide additional guidance to help market participants keep pace with innovation while complying with CFTC regulations.”
Seconding this, DCR Director Brian Bussey stated, “CFTC staff is providing this information, in part, to aid market participants in their efforts to design risk management programs that address the new risks imposed by virtual currency products. In addition, the guidance is designed to help ensure that market participants follow appropriate governance processes with respect to the launch of these products.”
The advisory or guidelines lists down tips to keep in mind on enhancements when listing a virtual currency derivative such as bitcoin futures and enunciates “the CFTC staffs’ priorities and expectations in its review of new virtual currency derivatives to be listed on a designated contract market or swap execution facility, or to be cleared by a derivatives clearing organization.”
Recently, the CFTC was in the news when Chicago Board of Exchanges (CBOE) appealed to the former to reduce the price of bitcoin futures from $10 to $5.
On that occasion, Matthew McFarland Managing Director of CBOE had said, “Cboe Futures Exchange, LLC (“CFE” or “Exchange”) hereby submits a CFE rule amendment (“Amendment”) to change the minimum increment for Cboe Bitcoin (USD) (“XBT”) futures. The Amendment will become effective on or after May 1, 2018, on a date to be announced by the Exchange through the issuance of an Exchange notice.”
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