Commodities Binary Options standard – Transparency Draft for comment

London, 22 July 2016. The FICC Markets Standards Board (“FMSB”) has today published its second standard aimed at improving conduct in the wholesale Fixed Income, Currency and Commodities (“FICC”) markets.

The standard, which is being issued in draft form for comment, covers binary options in the commodities markets. [Click here for standard]

Binary options, also known as barrier or digital options, pay out a fixed amount, or nothing, depending on whether the underlying price of a commodity hits a pre-agreed level at a specific point in time. This creates an inherent conflict between the bank or dealer selling the option and the client.

The FMSB is issuing the standard in draft form to provide an opportunity for public comment ahead of final ratification and issuance.

The FMSB is seeking comment from interested parties on the new standard over the summer.

Submissions should be sent to standards@fmsb.com by midday (12:00pm GMT), Friday 14th October, 2016.