The U.S. Securities and Exchange Commission approved a securities exchange’s proposed rule change allowing it to list binary options based on specified key performance indicators reported by certain stock issuers. The contracts will be cash settled, European style, standardized options and National Market System securities, bringing them within federal securities law protections. The options will trade in substantially the same manner as existing standardized, nonbinary exchange traded options. They will be subject to exchange rules covering areas including customer accounts, margin, trading halts, auctions, market maker obligations and order handling. The approval applies only to the specified contracts traded on a securities exchange in compliance with securities laws. It does not address similarly referenced products structured differently or preclude Commodity Futures Trading Commission jurisdiction over KPI contracts designed to fall within that agency’s remit.

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