Trade options are physically settled over-the-counter options on most deliverable commodities (e.g., agricultural, energy, or metals) where the buyer is a producer, processor, commercial user or merchant of the commodity underlying the option.1 On April 30, 2015, the Commodity Futures Trading Commission (CFTC) proposed rules to reduce trade option reporting requirements for commercial counterparties that are neither swap dealers nor major swap participants (end-users).2 The proposal expands the no-action relief provided by the CFTC’s Division of Market Oversight (DMO) in 2013, which provided end-users with an alternative to complying with the CFTC’s Part 45 Swap Data Repository (SDR) reporting requirements.3 The comment period on the proposal will close 30 days after the proposal is published in the Federal Register.

Under the proposal, end-users would no longer be required to comply with CFTC Part 45 reporting requirements or make the annual Form TO filing with respect to trade options. Rather, end-users would only be required to file an email notice to DMO within 30 calendar days of entering into trade options having an aggregate notional value in excess of $1 billion in any calendar year (whether or not reported to an SDR). Alternatively, an end-user could provide the email notice to DMO before entering into any trade options if the end-user reasonably expects to breach the $1 billion threshold in any calendar year.


1 The CFTC describes a trade option as “generally a commodity option purchased by a commercial party that, upon exercise, results in the sale of a physical commodity for immediate (spot) or deferred (forward) shipment or delivery.” See CFTC Form TO and CFTC Rule 32.3(a).

2 The proposal is available on the CFTC’s website at:

3 See CFTC Letter No. 13-08 (April 5, 2013), available at: For more information on this no-action letter, please refer to Skadden’s April 8, 2013, client alert, available at:


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